Chinese commercial giant Suning Holdings Group has revealed its strategy for 2020, with the firm's founder and Chairman Zhang Jindong announcing that in its 30th anniversary year the business will create more than 10,000 new stores and 8,000 new jobs, while investing at least 40 billion RMB (approx. EUR 5 billion) in new technologies and logistics infrastructure.
The company, one of the top three among the top 500 non-state-owned enterprises in China with annual revenues of RMB 602.5 billion (approx. EUR 77 billion), will continue to invest in its smart retail infrastructure to deliver an enhanced customer experience for a new generation of Chinese consumers.
A 'consumption upgrade' in China is being driven by an increase in consumer spend with the emergence of new, more aspirational and affluent consumer groups, along with increased purchasing power in China's 'lower-tier' cities – smaller, less developed cities that make up half of the country's population. This is creating an even greater opportunity for international brands looking to access
the China market. Zhang Jindong, Chairman of Suning Holdings Group, referring to China's rising sophisticated middle class, said: "Chinese enterprises rely on a 40 trillion-scale consumer market. China's market volume is the enviable and desired by any overseas company. As long as the company wants to do the business, there is room. Whoever can more effectively meet and match consumer demand at all levels will succeed in the future."
As China's economy has shifted from high-speed development to high-quality development, Suning will evolve from expansion at scale and quantity to the improvement of quality and efficiency. Speaking at a special meeting at the firm's sprawling headquarters in Nanjing, Zhang outlined a strategy called 'Open from 1 to N and Integration from N to1'.
Open from 1 to N refers to how Suning is opening up its core business of retail through multi-channel, full-scenario categories to empower the industry and society at large. Integration from N to 1 refers to the integration of Suning's scenarios and supply chain, converging online and physical retail to focus on consumer experience and providing diversified services of a consistent quality for every consumer.
Since its creation in 1990, Suning has formed a smart retail ecosystem with retail at its core and industries such as finance and real estate revolving around it. By continuing to invest in retail infrastructure including commodities, integrated logistics warehouses - including those manned by robots and drones - and technology, the business aims to provide an enhanced consumer experience.
Announcing the strategy for the year ahead, Zhang also revealed that Suning has now opened more than 4,400 of its Retail Cloud Stores - the name given to its franchise model which unlocks the power of the firm's value chain for entrepreneurs in more rural locations outside of China's larger cities. Earlier in 2019, Suning acquired 37 Wanda Department Stores and an 80% equity stake in Carrefour's Chinese operations for €620m, bolstering its bricks-and-mortar retail portfolio.
About Suning Holdings Group
Founded in 1990, Suning is one of the leading commercial enterprises in China with two public companies in China and Japan. In 2019, Suning Holdings Group ranked as the top three brands among the top 500 non-state owned enterprises in China with annual revenues of RMB 602.5 billion (approximately EURO 77.24 billion) and continued to top the list of Internet retailing category. Adhering to the enterprise mission of "Leading the Ecosystem across Industries by Creating Elite Quality of Life for All", Suning has strengthened and expanded its core business as retail through a corporate ecosystem comprised by multiple vertical industries, including commercial real estate, financial services and sports. Suning.com, the main subsidiary pioneering in online and offline retailing, has been listed in the Fortune Global 500 for three successive years from 2017 to 2019.
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The Round Was Led by Growth Fund Red Dot Capital and Will Enable Trigo to Continue to Scale their Checkout-Free Technology and Accelerate Deployment Throughout the US and Europe.
Trigo, a computer-vision company providing checkout-free systems to grocery retailers, has announced that it raised $22 million in an A Round. The round was led by growth fund Red Dot Capital with the participation of existing investors Vertex Ventures Israel and Hetz Ventures. The funds will enable the company to scale the technology for even larger store sizes (currently at 2X the footprint of Amazon Go), and advance its partnerships with leading US and European grocery retailers. Trigo is currently installed in stores as large as 5,000 square feet, the largest checkout-free stores in the world.
Trigo is already partnering with a number of global grocery chains including leading European chains and Israel's largest grocer – Shufersal, which will be deploying Trigo's technology in 280 stores over the next 5 years. Trigo has raised $29M in total funding to date.
Trigo's computer-vision system uses advanced AI and algorithms to identify and record items grabbed by shoppers while they are in the store. The company's unique 3D space-mapping technology can be retrofitted into existing stores and enables consumers to spend their shopping time simply picking up the items they need – not waiting in long checkout lines and avoiding any kind of scanning activity altogether. Shoppers can be billed automatically or may pay cash or card.
Trigo's system allows shoppers to personalize their in-store experience by giving them the option upon arriving at the store to either "opt in" by identifying themselves via a loyalty program, effectively allowing the retailer to gain insights on their purchases; or "opt out" by choosing not to check-in and having an "unidentified experience". Shoppers will still enjoy the same benefits of the checkout-free experience either way.
"There is very strong demand globally among grocery retailers to dramatically improve customer experience," said Michael Gabay, co-founder and CEO of Trigo. "The common denominator is that everyone is searching for technology to enable the most seamless in-and-out shopping experience. These new funds will be used to scale our technology further and support our global expansion."
"We believe that Trigo's world-leading computer-vision team will be the first to scale this technology globally and unlock the full potential of a true grocery-wide revolution," said Barak Salomon, Managing Partner of Red Dot Capital. "The process of manually scanning barcodes for each separate item at checkout is outdated and time consuming. Trigo's technology is going to save brick and mortar, revitalizing the in-store experience while keeping the best part of shopping alive."
Trigo is a frictionless-checkout company harnessing cutting-edge AI and computer vision technologies to eliminate the hassle of waiting in long checkout lines and scanning products. The solution is based on ceiling-mounted commodity cameras, proprietary algorithms and neural networks, developed by a team of academic, industrial and military backgrounds. The company is working with a number of global grocery chains and deployed the largest checkout-free stores in the world, covering thousands of different products in each store. Trigo was founded in 2018 and is based in Tel Aviv.
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Thailand's ICONSIAM named 'Store Design of the Year 2019' at the World Retail Awards.
"We want to amaze and inspire visitors at our properties through extraordinary experiences, as well as bring honour to Thailand on the world stage." -- Mrs. Chadatip Chutrakul, CEO Siam Piwat Group.
Leading Thai retail developer Siam Piwat has scooped two of the world's most prestigious awards in the retail industry at the World Retail Congress recently held in Amsterdam, The Netherlands.
Siam Piwat is the owner and operator of some of Thailand's most successful retail developments such as Siam Paragon, Siam Center, and Siam Discovery, as well as the joint venture partner of ICONSIAM -- the USD 1.7 billion riverside landmark destination that opened in Bangkok in November 2018.
Siam Piwat Group CEO, Mrs. Chadatip Chutrakul, was inducted into the World Retail Hall of Fame by the World Retail Congress as one of the four new members selected in 2019.
They were selected by the Congress because their "ideas have shaped retailing through the businesses and brands they have created, or by their skills in running the retail industry's giants, demonstrated clear vision, courage and determination to make their dreams a reality."
The World Retail Hall of Fame was established in 2007 to honour the retail industry's most innovative and influential representatives.
The World Retail Congress also awarded ICONSIAM, in which Siam Piwat Group is a joint venture partner, the top prize of 'Store Design of the Year 2019' as part of the annual World Retail Awards.
The Grand Jury of the World Retail Awards said ICONSIAM is "breath-taking in its scope and scale and takes retail design into the future."
Mrs. Chadatip Chutrakul, said: "Throughout 60 years, Siam Piwat has been a thought leader creating new prototypes and bringing new formats that have advanced the retail development sector in Thailand, and many of these projects have been game-changers."
She said, "ICONSIAM shows that bricks and mortar still have a crucial part to play in successful retailing and they are assets only waiting to be differently leveraged within a new paradigm. That new paradigm involves leveraging a very wide group of stakeholders by creating shared value for them all."
According to Mrs. Chutrakul, ICONSIAM, with a gross floor area (GFA) of 750,000 square metres (approximately 8,073,000 square feet) made the creation of shared value into a 'business sustainability' strategy to help the success of such a large-scale initiative that requires the collaboration of many different groups.
"Our achievements were made possible because of the collaboration and co-creation of our tenants and retailers," she said.
Mrs. Chutrakul added, "The benefits created by ICONSIAM also go beyond our tenant-partners to many different stakeholders at many different levels of society including artists, craftsmen, performers, small enterprises, the surrounding communities and even the city of Bangkok, too.
"For small businesses and artisans, we help them flourish and prosper by creating for them opportunities for new linkages, locally and globally; we help artisans, craftsmen or performers have a place on a globally visible stage to enhance the sustainability of their livelihoods, and we act as a platform that makes Thai values and all that is great about Thailand visible to the world."
"We engaged with artists of every stature in the development of ICONSIAM, inviting them to express themselves at ICONSIAM through designs, decoration and other creations ranging from ceiling finishings and chandeliers to architectural elements such as columns."
"Also, in the SookSiam zone at ICONSIAM, you can see how it brings together hundreds of small, mom-and-pop operations from Thailand's 77 provinces -- people who have mostly never operated out of their hometowns but are now selling on a global platform."
"And, with ICONSIAM's River Park, we made it into an open, public venue for community and regional activities. And, later this year, we will open a world-class museum which will be an important addition to Bangkok's cultural offerings," she said.
Mrs. Chutrakul noted that "ICONSIAM has also had a transformative effect on the Chao Phraya River. We acted as a catalyst for a multi-stakeholder collaboration that embraced riverside communities, hoteliers, river transport operators, sites of historical and cultural importance, and government agencies, which is already helping to revitalize many districts around ICONSIAM."
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Mongolia, once a place whose very name conjured up images of isolation and deprivation has become one of the hottest new frontier market destinations for international and luxury brands in recent years, particularly those catering to higher income clients.
Over the past 28 years, Mongolia has been successfully transforming into a vibrant democracy from a centrally planned socialist economy, resulting higher level of GDP with vast agricultural and mineral resources. During its transition to a market economy, Mongolian GDP had bottomed out particularly in 1993, experiencing a painful “transformational recession” until 2000. The new economy began to recover slowly to positive rates of growth thereafter by 2001- 2010. GDP per capita doubled between 2005 and 2012.
This economic boom has made many Mongolians millionaires overnight and affluent locals have begun seeking new ways to enjoy and show off their wealth.
However, the economy was particularly slowed down by a fall in commodity prices and declining investment and private consumption during 2014 - 2016.
After this downturn, the Mongolian economy strongly recovered in 2017 and 2018H1. GDP growth rate increased from 1.2 percent in 2016 to 5.3 percent in 2017 and 6.3 percent in the first half of 2018, thanks to growing investment in the mining sector and higher coal prices and exports.
The changes of GDP growth in these years indicate that the country’s economy is strongly dependent on mineral commodities. Boosted by an incredible amount of minerals with an estimated value of 1.5 - 2 trillion USD with a relatively small population, the economy has became one of the hottest new frontier markets for international investors in various fields.
Mongolia’s rampant economic growth has had a significant effect on the purchasing power of households. Working and professional class wages have risen rapidly, lagging just slightly behind the overall economy once inflation is taken into account. The retail sector that has benefitted from the recent boom has become the hidden hero of Mongolia’s real estate market. Both local retailers and the handful of international brands rapidly started expanding and many luxury brands like Versace Collection and Burberry have opened shiny new outlet branches in the center of the capital city. This means that Mongolians have much more disposable income to spend than they did a few years ago. According to the Mongolian National Statistics Office (NSO), monthly average expenditure on all types of consumption per household has significantly increased between 2012 and 2017; on clothing alone it increased by over 500% between 2003 and 2011.
Mongolians are consuming a larger number of higher quality goods than ever before. The retail sector has expanded accordingly, rising from less than 14% of GDP in 2008 to 19% in 2011 even as GDP itself increased by nearly 36% during the same period.
Developers have tended to focus on high-end office and luxury residential complexes over the last few years and have neglected the needs of a growing consumer class. Rental prices in the retail sector have yet to catch up to the growth of sales. The per meter rental price in Ulaanbaatar’s prime retail locations is still significantly below that of comparable locations in other emerging Asia markets.
The size, growing urbanization, and economic development of Mongolia are drawing retailers. With its robust retail track record, relatively low costs and bright macro outlook, Mongolia looks set for unparalleled consumer and retail spending over the next decade. More than 100 international brands have opened up exclusive franchises or wholly owned outlets in Ulaanbaatar to date, the majority in the past eight years.
At the same time, there is still a need for brands targeted at mass market consumers to cater to the growing local appetite for conspicuous consumption, because many Mongolians go abroad for shopping and buying designer goods.
Although traditional retail still exists with Mongolian consumers doing their daily shopping in open markets and through informal channels, shopping habits continue to evolve. Preference for organised retail formats and global brands is growing, creating more opportunities for international players. Apparel and luxury retailers are also expanding. Youthful clothing brands such as Mango, Sisley and Adidas, who entered the market in recent years, are doing great because the Mongolian people are open to giving new brands and new products a try.
Retailers’ interest in any country depends on development of new high quality shopping centers corresponding to world standards. The Shangri-La complex was completed in 2016, giving international retailers an opportunity to set better terms of occupancy in the business district of Ulaanbaatar. The country has numerous large shopping malls in the city, namely Central Tower, Khunnu Mall, Naadam Center, and Naran Mall, among others. Convenience stores and mini-marts have started growing in Mongolia in recent years. Trendy food and beverage destinations targeting young customers (65 percent of the Mongolian population is aged 35 or under) have newly opened in the city, such as Tom N Toms Coffee, Coffee bean, Tous Les Jours, KFC, and Burger King.
Investment opportunities in retail segment across three primary themes:
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Rapid expansion of smartphone market with 1.7 million users is recorded. AI based intellectual work of Mongolian youth is growing and the first fintech financial service company LendMN launched its initial IPO at the Mongolian Stock Exchange (MSE).
THE RISING URBAN MIDDLE CLASS
More and more households falling in the middle-income segment. According to the forecast the number of households in this segment to pick up to 34.1% in 2022, up from 12.7% in 2018.
Bank of Mongolia has launched a campaign called “Digital payments in a digital era” in order to promote the widespread adoption of digital currencies and payments. In many ways, the rise of retail in Mongolia appears to mirror the experience of other emerging markets, particularly the so-called “Asian Tiger” economies of the 1990s and 2000s. Mongolia’s demographics, climate, consumption patterns, and unique cultural heritage differentiate it from the rest of the emerging economy pack. Its strong retail track record, low costs and bright macro outlook will propel Mongolia for unparalleled consumer and retail spending over the next decade. Many international partnerships have significantly exceeded their owners’ expectations, as the appetite for luxury and mid range western brands within Ulaanbaatar has proved to be more substantial than companies’ projections thought possible.
Asia Pacific Investment Partners is the oldest, largest, and most reputable Mongolian real estate agent.
We are a real estate intermediary and advisory firm offering agency, representation, property, management, property valuations, interior design, furnishing and financial intermediation services.
Company website: www.apip.com