A safari through China tech: About a cat, a hippo and truly fantastic feasts
I’m a tech enthusiast. I’m fascinated by China. I love to explore. So, I packed my bags, got on the next plane to Hangzhou and went on a 2.5-weeks “safari through China tech”.
In this article, I want to briefly share with you some of the most astounding discoveries and experiences during my expedition. Take this as a condensed travel report that features three eye-opening micro stories full of tech and digital.
1/ THE CAT FOLLOWS YOU EVERY STEP OF THE WAY
Hangzhou is like the internet — cute cats have taken over. Or more precisely, the bottom-cropped stylizations of one particlar cat, the brand logo of Tmall (see image below). I took the photo on my first encounter with the ominous Tmall cat, not yet aware of how many more should follow.
As a reminder, Tmall is the largest B2C e-commerce platform in China with well over 500 million registered customers and owned by Hangzhou-based Alibaba Group. So, what does it have to do with the family-run corner shop depicted below?
Well, certainly the small store continues to offer foods, drinks, smokes and basic convenience goods — just like any other shop in the neighborhood. But with a twist!
Not so long ago, it started out operating on Alibaba’s so-called LST (“Ling Shou Tong”) retail services platform — resulting in a total tech makeover. The store is now, for instance, connected to a central system for managing restocks and analytics. Also, it was equipped with an improved POS-solution, in-store inventory tracking and digital signage.
High revenue shops, like the one on the left, additionally received a bunch of cosmetic upgrades to become so-called “Tmall Corner Stores” — hence, the cat logo. As it looked, I had stumbled upon a showcase example of how online commerce giant Alibaba is gradually putting its “new retail” plan into action. But more on that later. For now, back to the Tmall cat and other encounters with it on that first day in Hangzhou.
Before heading towards my apartment, I swang by at the next Starbucks. Firstly, to get a well-deserved cup of coffee after an exhausting flight. Secondly, to simply connect to their free WiFi.
After Log In, I was redirected to the pop-up screen depicted on the left where I, unsurprisingly, was given the opportunity to treat myself to latest Starbucks merchandise — of course via Tmall! Obviously, I wanted to find out more and clicked on the tile with the cat. Next, I found myself in THIS all-Starbucks world within the e-commerce platform of Tmall, featuring special collections of coffee, gift cards, other branded merch and even the option for Starbucks delivery. I read that Starbucks was one of the first international partners to launch such a proprietary flagship store within Tmall in 2015. Meanwhile, most major global brands have followed and new categories emerge.
Having finished my coffee, I headed off for my apartment. Almost there, in the building’s elevator, I had my third and final encounter with the Tmall cat that day— this time via a promotional poster.
By then, I had gotten familiar with the omnipresence of the cute little cat. However, I did not have the slightest idea of what the number 618 had to do with it. Tired but at the same time intrigued, I started researching.
It did not take me long to find out that I had just stumbled upon an ad for China’s second-largest sales event — “618 Mid-Year Shopping Festival” which starts on June 1 and peaks on June 18, thus the number “618”.
Tmall (who can rightfully pride itself on having debuted the world’s largest shopping festival “11.11”, also known as “Singles’ Day”, which last year resulted in an astronomical $30.8 billion in sales in only 24 hours) is not the inventor of the 618 Festival. In fact, JD.com — Tmall’s fiercest national competitor — successfully launched the event a few years ago. Tmall only jumped on the 618 bandwagon during last summer but is now strongly claiming its own share of the pie. For instance, with its 2019 festival campaign (called “ideal life on Tmall”) which is intended to cement Tmall as the go-to shopping destination for progressive consumers. As far as I could judge from Hangzhou which is, admittedly, the undisputed home turf of Alibaba Group, Tmall and its cat logo outshined its competitor by far in terms of overall brand visibility prior to the final big-bang sales on June 18. You need more proof? Well, take the metro:
Seems like the Tmall cat is really roaming around every corner of Hangzhou, whether it be in brick-and-mortar retail, flagship e-commerce sites or global sales events.
But Tmall’s influence on local shopping habits does not stop there. Rather all know-how in digital and tech, as well as pure operational excellence is being accumulated in a suite of retail services that is offered to other businesses — like “Innisfree”, the №1 Korean organic cosmetics company. Tmall led the tech-makeover of an Innisfree store in Hangzhou, gradually merging online and offline retail experiences — a vision Alibaba simply dubs “new retail”. Here a short list (and explanation) of some of the tech features I tried out:
- their “digital shelf” (a screen to access Innisfree’s whole product offering, conveniently order online and get home-delivery),
- their “smart skin analyzer” (a camera-enabled tool that recommends the most suitable Innisfree products based on personal skin condition),
- their “claw crane” (a machine were visitors sign up for the membership program and then get a chance to grab free samples)
I could have gone on like this for hours, loosing myself in countless examples of Tmall’s omnipresence in Hangzhou. If you’re intrigued, feel free to hit me up for more “kitty-related” insights. But for now, I think that the essence of this chapter has been conveyed — “the cat follows you every step of the way”. So let’s move on to the next chapter, starring another animal that promises a similarly interesting micro story.
2/ THE HIPPO TRULY PIONEERS THE FUTURE OF RETAIL, BUT…
Before I arrived to China I had read quite a few immensely favorable reports in international media glorifying “Freshippo”, formerly known as “Hema”, as the almost magical place where Alibaba makes its “new retail” dreams come true. Of course, one of the things topping my Hangzhou bucket list was to go to one of their supermarkets myself and see if it lived up to its reputation. My answer is: “yes, but…”
First things first. Yes, Freshippo undeniably sets new standards for grocery shopping and successfully breaks with certain principles of traditional retail. For instance, with 60% of total revenue being generated through online sales, all stores also function as a warehouse and fulfillment center. Here is how :
When I visited Freshippo on a late Tuesday afternoon, I took notice of about 10 employees roaming the floors to pick the items for the online order they were in charge of. Once they had gathered every ordered product in a refrigerated bag, they dropped the bag off onto a ceiling-mounted conveyor belt, destined for delivery (see GIF on the left). The final fulfillment of the order is then carried out by a squadron of Alibaba’s “Ele.me” delivery men on motorbikes. All online customers living within a 3km-radius are guaranteed to get their Freshippo package delivered in a maximum of 30 minutes after placing the order, entirely free of charge, and 24/7.
During my visit, I could personally witness the enormous popularity of this ultra-convenient offering — the store’s conveyor belts got increasingly packed with bags when early evening hours approached. The only small “but”? Well, employees constantly darting through shopping aisles in a rush to beat the clock did not necessarily contribute to a perfectly pleasant in-store shopping experience. However, I guess Alibaba is willing to sacrifice that aspect in the light of the afore-mentioned 60% share of total Freshippo revenues that go to online sales.
Coming back to in-store experience, everything is driven by the Freshippo mobile app. Basically, it serves as the central hub that accompanies users through every step of the customer journey.
For instance, the app comes with an integrated QR-code scanner that allows to access all nutritional and supply chain information for scanned items, as well as a broad range of customer reviews and also recipe ideas.
I tried the scanning function with a bottle of apple juice and was redirected to the product page depicted on the left. As I could not find language settings I wasn’t able to understand the text — and neither was Google Translate app. So I watched the short video clip which displayed people enjoying the product. Also, I found some reviews after clicking the comment button.
Another neat feature of the app is to let customers complete their purchase at the self-checkout terminals, again via scanning a QR-code. Of course, purchase history and preferences are logged and consolidated in a personalized product page for convenient reordering from home. Unfortunately, I had to complete the transaction the old-school way — with cash — as I had troubles signing up for Alipay without a Chinese bank account.
In conclusion, the above experience perfectly describes Freshippo. Alibaba’s venture into the supermarket domain definitely pioneers the future of retail. But most of these tech-driven solutions actually only add real value to those people choosing Freshippo to be their №1 destination for recurring grocery shopping, rather than to one-off customers like me. The more you shop at Freshippo, the more convenient it becomes. However, it’s definitely worth a visit for anyone with an interest in retail-tech, even if its just for the sake of new inspiration.
3/ HEYTEA’S FANTASTIC FEASTS (AND WHERE TO FIND THEM)
During my frequent strolls in the vivid areas around Hangzhou’s trendy Westlake I noticed that the venue with the longest queues wasn’t that of a global consumer electronics giant or a fancy fashion brand.
In fact, it was a venue of HeyTea — basically, an up-and-coming tea chain that originates from Shenzhen, China. So, all that buzz and an average waiting time of over an hour for getting your hands on a simple cup of tea? Well, technically it’s not “just” a cup of tea as HeyTea’s famed signature brews are topped with a cap of salty cream-cheese.
Of course, I also treated myself to the №1 hype product in China and tried the strictly limited summer edition, “Very Lychee Cheezo” (see photo below).
In terms of pure looks and taste, I have to admit that the recipe did not have a lot in common with classical tea anymore. I’d rather say it was a juicy and gently sweet refreshment on a hot summer’s day.
But there’s more to the success story of HeyTea than those large crowds of fanatics at Hangzhou Westlake spending hours in a queue craving for cheese-topped beverages. 27-years-old Yunqi Nie, founder of HeyTea, racked up an remarkable $60 million in series B funding to accelerate the startup’s expansion. The hype around HeyTea is real — especially among an affluent, urban millennial generation in China (and first metropolises of SE Asia). The financial injection is also used to spread new chic HeyTea Black venues (see first photo of this chapter). The one I visited in Hangzhou was located in an upscale mall, elegantly-designed, and of course Wifi-equipped what made the waiting time more pleasant.
By the way, HeyTea ventures into battle with the likes of Starbucks, too, as it heavily promotes its new offering — “HeyTea Coffee” (see photo on the left).
Although the bubbly, iced cappuccino brew that I was recommended did not match my personal coffee preferences, it still seemed that HeyTea is getting Chinese millennials right again — at least judging from the sheer amount of photos they took in front of the bus with their coffees and sharing them on social media (like I did).
As it looks, the success story of HeyTea and its fantastic feasts has just begun. It will be interesting to follow this budding tea chain startup along its way of (ultimately) global expansion and how it will be able to fend off similarly popular domestic competitors like “LeLeChat” (who are literally copycat-ing HeyTea in all things branding- and product-related, with a small twist of additionally offering colorful baked goods). For now, HeyTea seems to be well prepared, always innovating, and strongly growing. But we shall wait and see whether they can maintain the complete craze around their brews and brand.
CHINA TECH— A WORLD IN ITS OWN
I took you on an expedition through some of the discoveries and experiences I made on my “safari through China tech”, starring a cat, a hippo, as well as HeyTea’s truly fantastic feasts. I hope you enjoyed the ride. If I had to choose one personal learning that I brought home from my trip, it would be the following: “China tech — a world in its own”. A world that is inspiring and full of adventures, yet at the same time decisively different.
