See webinar recording of this presentation at: https://resource.alibabacloud.com/webinar/detail.htm?webinarId=42 Unlocking Alibaba Retail Cloud is the first installment of the Alibaba Cloud The Next Generation of Retail and this presentation walks you through Alibaba’s coined New Retail concept. Learn how Alibaba Cloud unlocks the power of retail transformation and find out why the world’s largest e-commerce platform is built and run entirely on Alibaba Cloud.

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Next Generation
Retail
– Unlocking Alibaba
Retail Cloud
1 /19
Presented by Yang Kan

2. 2 /23
Evolution history of retail industry
New
Retail
2nd information revolution
(2010s - )
2nd industrial revolution
(1870s – 1940s)
1st information revolution
(1940s - 2010s)
1st industrial revolution
(1760s - 1870s)
• Big city emerges
• Large scale
mechanized
production
• Large
wholesalers
1870s
Department store
Traditional retail
Technology evolution enables manufacturing transformation, manufacturing transformation reshapes consumer behavior
New Retail
consumer behavior guides the transformation of
manufacturing and retail
• Smart mobile
• Global Positioning
Technology
(BeiDou、GPS)
• New infra get
mature
1930s
Supermarket
• Economy crisis
• Automotive
industry
1990s
E - commerce
• Internet era
2010s
Mobile shopping
1950s
Convenience store,
category specialty shop,
shopping center
• Sales real-time
management (POS)
• Logistics and
information system
• rapid pace of life
• The higher quality of
life
Traditional
Retail

3. 3 /23
China has more e-commerce activity than any country in the world today
– A booming retail market
This chart shows a forecast of the digital B2C
markets in the United States, China and the
EU5. China will be the world’s largest digital
market by 2018
• China Digital B2C Market Revenue Forecast
(e.g. e-commerce, e-travel and digital media)
• Chinese consumers spent more than $750
billion online in 2017 – more than the US and
the UK combined
• China e-commerce quickly became the
norm, and its development was fast-tracked
to the point where China pulled ahead of the
West
Source: Statista Digital Economy Compass
EUS*: Germany, France, UK, Italy, Spain

4. 4 /23
The change trend of offline and online retail
Worldwide mobile shopping is continuing its
steady gain on other digital channels
The offline store isn’t in danger of disappearing any
time soon…
We’re at a tipping point with mobile! While retailers are considering both dynamics in their search for talent
Global
customers
shop in-store at
lease once a
week
Source: PwC, Total Retail, 2017

5. 5 /23
Retail is embracing technology, customer, and industry in the
changing environment
Industry
• Global retail growth is getting slow,
urgently need to find new growth
forces
• Most retail entities are in early stage
of new retail development, circulation
efficiency is relatively low.
• Multiple retail forms are emerging
Technology
• New technology infrastructure takes
shape: cloud computing, big data,
mobile internet, smart device, AI,
online payment
• Internet is gradually releasing its
economic and social influence and
promoting globalization
Customer
• Consumers are highly adopted in
digital form of retail and getting more
used to Omni-channels.
• Increase power of consumption leads
to upgrade of consumption structure,
consumers value more on consumer
experience

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There are common pain points within online and offline
Consumer Store Traffic CustomerTransaction Member
No way to guide consumers into the store
Customers lack a new experience
Unable to know who is trading in the store
Even more unaware of who bought what
No way to know the consumer portrait
No tools to operate members
Store with fewer
consumers
Traffic with less transfer Hard to interact
with members

7. 7 /23
Traffic growth is slowing
down obviously
In 2017, online shopping users in China
reached 514 million, which continued to
slow in the last three years, by CNNIC
Soaring in online CPA
CPA, from 3 RMB to 200+ RMB, is
rising beyond expectation
Poor customer experience
Clothes or 3C products online are in a high
return rate than that in offline.
Fresh food online is hard to be reached by
consumers.
Online retail is hitting a plateau

8. 8 /23
Operation cost is increasing
As an example of the fast-growing
convenience store, the cost of the retail
supply chain in 2016 increased, the annual
cost of rent increased by 7%, the labor cost
rose by 6.5%, and the profit margin was
squeezed.
Difficult to improve surface/
and people efficiency
The impact of online retail results in the
restrictions of the store space and customer
numbers in expansion
Vague Consumers
The current user management methods are
relatively rough, lacking in-depth
understanding of users, lack of analysis of
customer characteristics, behavioral
preferences, and purchasing habits.
Bricks-and-Mortar retail is in dilemma

9. 9 /23
The birth of New Retail Coined by Jack Ma
In October 2016, during Alibaba’s
Annual Computing Conference, Jack
Ma introduced the concept of new
retail for the first time:
The era of pure e-commerce will end in the
next ten to twenty years, and only by
combining online and offline commerce as
well as logistics can we create a truly new
retail experience for our customers.
Jack Ma
October 2016
“
“

10. 10 /23
Perceived
Recognized
Insight
Touchable
Serviceable
Consumer
What does new retail means to consumer?

11. 11 /23
New Retail is consumer-centric and data-driven retail
• Powered by new technologies (Big Data & AI)
• Online and offline retail integration
The definition of New Retail

12. 12 /23
New Retail key concept - Reconstruction of “Customer-Product-Channel”
CUSTOMER PRODUCT CHANNEL
Increase Conversion
Rate
Improve Repurchase Expand Touch
Point
Reduce Cost
Revenue Efficiency
Intelligent Supply Chain Better ExperiencePersonalized Service Anytime and Anywhere

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From“Product-Channel-Customer”to“Customer-Channel-Product”
Functionality Experience
• Portfolio with High C/P value
• Well-packaging and high quality
• Professional in standardized and
personalized
• Social Experience & Sharing
• Value recognition
• Participation
• Designated discount
• Immersive
• On-call
• Personalized
• Quick delivery
Product Content Service

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Seamless integration of online and offline commerce
Online
• Integration of membership,
merchandise and service to
construct people-
merchandise-field
• Online and offline traffic
management to explore
opportunities
• Logistics integrated to bricks-
and-mortar to improve
customer experience
• Data integration to improve
business value
Offline
Advantage：
• Better experience offline
• Face to face customer service
• Real time and quick response
Advantage：
• Not limited by physical field and service
• Easy to collect and analyze customer information
Integrate
Online and offline
integration

15. 15 /23
“Customer-Product-Channel” by data insight
Customer
Identifiable, touchable and serviceable
consumer
Product
Intelligent supply on demand
Channel
Retail scenario anytime and anywhere

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Customer Oriented
Omni-channel Digitalization and intelligentization
Customization and Smart
Manufacturing
New supply chain
Online and offline combination, online and
offline channels fully open up and deep
integration. merchandise, inventory,
membership and service form a link , and
run through as a whole.
• Conduct digital operations for variety retail
scenes by big data and AI. Provide accurate
positioning of consumer, merchandise and field,
build a lot of new scenes.
• Smart Stores & Showroom : Except selling and
experience functions, offline stores are also
places of social and education. Shopping
experience are more rich and intelligent.
Consumer has more choices of what to
buy and where to buy. Brand retailers
should set the strategy to focus on
consumer interactions and optimization of
customer experience
Driven by the consumer, combined
with big data, make the supply chain
visual, intelligent and agile.
Features of new retail
2 3
4
5
1
Brand retailers should follow and leverage the
trend of customization and personalization to
upgrade manufacturing system to more
digitalized and intelligent

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Logistics
Artificial
Intelligence
Machine
learning
Deep
learning
Visual
Auditory
Sense
Feeling
Video/image/Facial Recognition
Speech Recognition/NLP
Optimal allocation and path/AR
Pridiction & Recommendation
• Image Search
• Smart Store
• Intelligent
Customer Service
• Text Mining
• Supply Chain
Optimization
• AR Shopping
• Sales Prediction
• Online
Recommendation
Increase
Conversion Rate
Improve
Efficiency
Improve
Experience
Reduce Cost
New technology to realize business value

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Enabling open, efficient,
synergetic supply chain by
Cloud Computing and big
data
02
Cloud
Logistic
Cost saving and
benefit increasing for
logistic by new
technology and new
mode
03
Smart
Manufacturing
Empowering the
manufacturing by big data
analytics and cloud
computing
04
Channel
Distribution
O2O Omni Channel
add more new services
for "distribution Service”
05
Online and
Offline
O2O scenario is the
most important Retail
channel, connected to
“Customer” and
“Product”
Precise Marketing,
the marketing
closed loop, adopt
internet operation
method
07
Consumer
New consumer
experience and
immersive service
01
Smart Supply
Chain
06
Marketing &
Operation
There are opportunities in the retail value chain

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Alibaba Retail Cloud ecosystem
1
2
3
4
5
6
7
Service
Foundation
Infrastructure

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World’s biggest platforms built and run entirely on Alibaba Cloud
> 580 mio. MAU
world‘s largest shopping app
TaoBao - Shopping AliPay – E-Payment
> 300 mio. MAU
world‘s largest e-payment app
CAINIAO - Logistics
> 812 mio. items/day
world‘s largest logistics platform
Cloud Computing

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11.11 Singles’ Day Unprecedented Cloud-Scale
Singles’
Day 2017
world’s biggest
shopping-festival
IT-records
 At peak time: 325k
orders/second
 812M transactions
in total
US$ 25.3 bn Trading volume within 24hrs

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Alibaba innovation across many retail formats
SHOPPING MALL COSMETIC STORE HYPER MARKET
BABY STORE CORNER SHOP GROCERY STORE CAFE
ELECTRONIC STORE FRESH FOOD MARKET RURAL STORE

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