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HKTDC's E-tailing Summit spells decline of brick and mortar world

THE rising death toll among brick and mortar stores clearly shows the growth of e-tailing around the world, Fung Global Retail & Technology's top analyst Kiril Popov told a Hong Kong Industry gathering last week that drew 1,000 delegates.

Mr Popov said 6,885 retail stores closed in 2017, up 22 per cent year on year, almost entirely attributable to the soaring growth of online retail traffic.

Mergers had become common, he said, marked by such high profile acquisitions of luxury handbag brand Coach's buyout of rival Kate Spade New York and pet supplier PetSmart's takeover of e-tailer Chewy.com.

Mr Popov was addressing the inaugural Asian E-tailing Summit, organised by the Hong Kong Trade Development Council (HKTDC).

Amazon.com is now the largest online retailer in the United States accounting for 55 per cent of online sales over US Thanksgiving. In a bid to head off Amazon, he said, Walmart has acquired a number of fashion brands, while using its physical space to introduce pick-up and delivery services via newly acquired Jet.com.

Mr Popov also said more and more luxury brands will start selling online, and the use of voice-controlled digital assistants and artificial intelligence assistants will become more prevalent, drastically transforming the shopping experience.

"To adapt to the new changing retail landscape, more collaborations between big corporations and start-ups, with the former providing capital and resources, and the latter offering the technology will be required," he said.

Dai Feng Jun, general manager, Hong Kong Suning Commerce, said that smart retail, that is adopting personalised and tailor-made products to the right customers at the right time, would triumph.

Smart retail leverages data-driven solutions to offer the right products to end users while giving customers the best shopping experience, he said.

Mr Dai stressed that smart solutions, using big data, allow retailers to collect information on consumer shopping behaviour, which can be shared with manufacturers and suppliers to tailor products consumer consumer demand.

"With good use of big data, retailers can also figure out the potential products and the best pricing strategy. As a result, the entire production-to-retail supply chain can be more efficient and sophisticated," he said.

Mr Dai shared Suning's own experience, saying that the company was also technology-oriented when it launched its online retail platform in 2012.

Exploring e-tailing in emerging markets, Kilimall International CEO Yang Tao shared his experience in Africa, where he started in 2014.

Contrary to the widespread impression of a poverty-stricken continent, he said consumers in Nigeria and Kenya enjoy lifestyles similar to those in developed economies.

He noted that there are currently 360 million Internet users, out of the total 1.2 billion population in Africa, with the number expected to double every 15 years.

Mr Tao said Africa is one the fastest growing economies, posting a 4.5 per cent annual GDP growth, with GDP per capita reaching US$3,000 in 10 African countries. The continent also has the world's youngest population, with the median age of below 18.

He said growing retail demand and insufficient supply has led to expensive offerings in various retail categories that opens new e-commerce business opportunities in Africa.

PayPal's William Ip, director for Hong Kong, Korea and Taiwan, said that digital payment systems are reliable, but privacy was key. The evolution of payment methods, from cash, credit cards to mobile and various contactless payment systems has helped unlock opportunities in the digital economy.

But when it comes to digital payment, Mr Ip said that while 89 per cent of those surveyed opted for digital payment methods, they are concerned about privacy and security issue.