Online giants scramble for offline retail


Once declining because of online development, now the offline sector is attracting the attention of online players. In recent years, China’s two largest online companies, Alibaba and Tencent, have both invested a lot of money in the offline retail sector. Alibaba started out first, with its investment in Hema Xiansheng supermarkets proving quite successful, and with Tencent following shortly after. Industry experts noted that as costs for gaining online customers rise, offline exploration is a must in order to dominate in the future.

The flames of the commercial war between China’s major online companies are now spreading to the offline territory, as they scramble for business opportunities in physical store sales.

Martin Lau is responsible for Tencent’s investment business. Recently, he has been quite anxious, because he is not satisfied with the speed or strength of the Tencent investment team’s layout in the offline retail sector, a senior executive at a domestic financial institution disclosed to the media.

“In the past month or so, they [Tencent’s investment team] have been working insane hours,” the aforementioned executive said.

Actually, Tencent’s layout in the offline retail sector has recently been extraordinarily intense.

Prior to the 2018 Spring Festival holidays, the company announced it will invest in a number of offline retail enterprises including the Yonghui Superstores, Carrefour as well as HLA (a male clothing seller). So far, this wave of offline retail investment by Tencent is expected to reach more than 20 billion yuan ($3.17 billion) in scale.

In marching into the offline retail sector, a business area that is not so familiar to the online giant, Tencent even relaxed its pace in developing apps.

In 2017, Tencent was restrained when launching small apps, but has shifted many of its efforts to explore opportunities in large business scenes like commercial supermarkets, retail stores and shopping malls, domestic financial news publication Caixin Weekly reported on Monday.

Pressure from Alibaba

To some extent, Tencent’s shift in strategies to explore the offline retail sector has been forced by the achievements made by its biggest competitor Alibaba Group Holding in the retail business world. “Tencent has to grab the chips to be on the offensive,” the Caixin report noted.

Alibaba has been exploring the offline retail sector in recent years with stunning strength. Ever since October 2016, when Alibaba’s founder Jack Ma Yun put forward the concept of “New Retail”, the company has been investing in a string of offline retail companies, including Sanjiang Co, Sun Art Retail as well as Easyhome.

Besides those, Alibaba has got the drop on other online giants in terms of investment in offline retail. According to media reports, Alibaba had already invested about 80 billion yuan in offline retail before Tencent started to march into this area.

Among Alibaba’s efforts in the new retail sector, the setting of Hema Xiansheng – also known as Hema Fresh Store – which specializes in selling high-quality seafood and daily necessities, is perhaps the most successful one.

In the fourth quarter of 2017, Hema’s revenues reached about 2.5 billion yuan, surging by about 50 percent compared with the previous quarter, said the Caixin report.

The Global Times also visited one Hema Xiansheng supermarket in Shanghai during the 2018 Spring Festival holidays and saw that one needed to queue up at least 20 minutes to buy seafood because there were so many customers in store.

The Caixin report also cited an anonymous source from Alibaba saying that the company will soon initiate a “large-scale replication” of Hema Xiansheng.

But on the whole, Alibaba has not yet achieved an omni-directional victory in the offline retail sector.

For example, the company’s alteration of Yintai (a Beijing-based retail chain) has been quite limited despite the fact that Alibaba started investing in the chain as early as 2014.

So far, Hema Xiansheng is likely to be the only offline retail business model that Alibaba has gained complete mastery of, the Caixin report noted.

According to the aforementioned insider from Alibaba, teams in its offline retail segment are all researching why Hema has been so successful in an aim to find their own business direction.

For the next step, Alibaba will grab control of the supply chains in the supermarket retail stores it has already invested in, including Taiwan-based RT-Mart, and will try to convert those traditional stores into digital malls.

One industry insider pointed out that Alibaba’s business theory in exploration of the offline retail sector has been investing in heavy assets to widen the gap between itself and other online players in terms of competence.

Apparently, for other companies like Tencent and Baidu, they must find a way different from how Alibaba has tried to expand its influence in the offline retail sector.

Future of grabbing real industries

To compete with Alibaba’s new retail concept, Tencent has launched what it calls “smart retail”, which Tencent Chairman Ma Huateng has interpreted as efforts to provide customers with more accommodative, innovative and sustainable retail solutions by means of decentralization methods.

Although different companies raise different concepts, they probably have the same goal of creating a new wave of online-to-offline solutions so that online big data/customer flow and large-scale offline trade locations can supplement each other.

“This combat [between Alibaba and Tencent] in the offline retail sector is not just one combat, but is a comprehensive war to grab the future of real industries,” an industry insider commented.

According to Wang Lixing, managing director at the China Renaissance Group, China’s online retailers have found that the costs of getting online customers are increasingly rising and even surpassing the costs in offline scenes. So internet giants have realized the importance of attracting customers in brick-and-mortar locations.

Also, as the competition rages between the two internet giants, offline retail companies are also making hard choices regarding which one of them they should stand by.

According to the Caixin report, almost all the offline retailers that have cooperated with either Alibaba or Tencent so far once negotiated with both of them.

However, in the end, they had to choose one of them to collaborate with because of the fierce competition between the two giants.

This story is based on an article published by Caixin Weekly.

Source: Global Times


Tencent’s Pony Ma becomes richest Chinese: Hurun Global Rich List 2018

Pony Ma

Pony Ma, founder and chairman of China’s tech titan Tencent, has become the richest Chinese in the world as he total assets have accumulated to 295 billion RMB ($47 billion), according to the Hurun Global Rich List 2018 released by Hurun Report on Feb. 28.

Ma ranked 15th globally, up from 23rd a year ago.

Ma is the 13th Chinese man to top the list since Hurun Report established this ranking program.

The growth in his wealth came principally from the rise of Tencent stock over the past year. Its stock price soared 114.4% in 2017, helping the company enter the exclusive US$500 billion market value club.

A total of 2,694 billionaires (in US dollars) from 68 countries were on the list, adding up to a collective wealth of 66 trillion RMB, or 13.2% of the world’s GDP.

The 64-year-old Chinese real estate tycoon, Wang Jianlin and his family, who ranked 1st in the Greater China category the previous 2 years, places 8th this year with a total net worth of 170 billion RMB.

It is confirmed that the number of Chinese billionaires grew from 210 to 819, 40% more than billionaires in the US. However, 7 of the top 10 richest men in the world are from the US.

Hangzhou offering huge subsidies to help foreigners start business

Eastern China’s city of Hangzhou is about to roll out a series of competitive policies to attract global talents, said Communist Party of China Hangzhou Committee Tuesday.

According to the policies, foreign entrepreneurs can get financial aid of as much as 100 million RMB ($15.8 million).

It is learnt that foreign talents will be divided into 5 grades in accordance with their academic ability, skills and contribution.

A Party official of the city named Chen Jian noted that foreign talents could enjoy facilitated exit & entry services in Hangzhou, including permanent resident application, residence permit and port visas.

Foreigners starting business in Hangzhou can enjoy subsidies ranging from 200,000 to 5 million RMB after evaluation. Those extremely outstanding ones can get as much as 100 million RMB.

So far, Hangzhou has introduced a total of 29,000 high-level overseas returnees and 15,000 foreign talents. In addition, 4,980 enterprises in the city are registered by foreigners.

J-20 fighter jet significantly improves China’s air combat capability

The capability of the Air Force of the People’s Liberation Army of China to win battles is significantly improved with the recent commission of China’s self-developed latest J-20 stealth fighter, said military expert.

The J-20 fighter jet was officially commissioned into military service in September 2017, which has strategic and epoch-making significance, said Wang Mingzhi, professor at the Chinese people’s Liberation Army (PLA) Air Force Command College.

Wang noted that the commission has increased the ability of China’s air force to deal with new security threats in airspace, and improved the aero equipment systems.

The expert explained that as many countries are stepping up their efforts to develop stealth fighters, including Japan, South Korea and India, it is also urgent for China’s air force to promote its ability to counter security threats in airspace. The J-20 fighter jet will play a significant role in safeguarding China’s airspace security.

In addition, the commissioning of the fighter jet signals that both the air force’s capability to win battles and its deterrence capacity have improved, as the J-20 stealth fighter is capable of detecting and launching attacks to destroy opponents preemptively, Wang disclosed.

Wang also stressed that China has overcome lots of difficulties in developing the fighter jet, as there was no past experience to follow and no possibility to borrow knowledge related to such advanced technologies from western countries.

Despite this, with limited wealth, scientific and technological strength accumulated since the reform and opening up, China has successfully developed the highly advanced new-type J-20 stealth fighter jet in a shorter time than other countries, the expert noted.

Operators complained of swindling money out of customers supported by big data

Many operators are falling under blame for incidents in which money has been swindled out of their regular customers when big data collected from users’ daily life was utilized against them, Science and Technology Daily reported.

A customer recently shared his experience online that he used to book hotel on a travel website for the price of 380 yuan (about $60) per room. However, he inadvertently discovered that the marked price for such a room was only 300 yuan when he registered using his friend’s account.

Later, many Internet users shared their experiences online, complaining that operators were often adopting price discrimination over their users, offering the same product or service at different prices.

“Big data may have been utilized to confirm your living and usage habits even if you haven’t not been using data mining technologies directly,” said Yang Yixian, professor at School of Cyberspace Security, Beijing University of Posts and Telecommunications.

Yang added that the data can be used by operators to discover potential users and associations between certain things.

Legal professionals noted that it is unreasonable for operators to set different prices for difference consumers.

Yang also suggested that relevant departments should adopt measures and strengthen supervision on malicious data mining acts, and consumers also have the right to request removal of information fragmentations directly relevant to them.

Price discrimination was also found to happen on Amazon in 2000, when one of its user noticed that the price for a DVD he bought from the platform dropped to $22.74 from $26.24 after he deleted the cookies. The platform later made apologies for this.

Chinese herbal ‘secret remedy’ craved by people in the U.S.

The Chinese herbal supplement, “Nin Jiom Pei Pa Koa,” is in large demand by U.S. citizens due to remarkable effects it has in treating the common cold.

People in the U.S. are going through the worst flu epidemic seen in recent years this winter due to which nearly 56,000 people in the country’s 49 states have died of flu.

As antiviral drugs including Tamiflu were almost sold out in the U.S., American people are eager to purchase the aforementioned Chinese herbal supplement after it was introduced in an article “Herbal Supplement Has Some New Yorkers Talking, Instead of Coughing” published in the Wall Street Journal.

According to the article, Alex Schweder, an architect and professor of design at Pratt Institute, has been super sick for a week and half and couldn’t stop coughing, but he just stopped coughing only 15 minutes after taking the supplement.

American actor Matthew Modine also noted that his cough was obviously relieved after taking the supplement. Many consumers in the U.S. all expressed their love for it, and some even add the supplement to their food.

The Chinese herbal supplement is a minty, thick and sweet syrup that treats cough and sore throat, usually sold in 300-milliliter bottles.

Due to popularity of the herbal supplement among American consumers, its price surged to even $70 from $10. Despite the high price, the supplement is still in short supply.

As for the crave wave related to the herbal supplement, the U.S. Food and Drug Administration reminds the public to still follow the doctor’s advice before taking the supplement in case of overdose or potential health risks.

UK continues to expand cooperation with China in math education

The UK continued to expand cooperation with China in mathematics education to improve its students’ mathematical ability, reported.

During British Prime Minister Theresa May’s visit to China earlier this year, the UK and China reached agreements on a series of educational cooperation programmes with total value of 550 million pounds (about 4.79 billion yuan), including extending the England-China math teacher exchange programme to 2020, according to BBC.

Through the programme launched by China and the UK in 2014, the Chinese decimal multiplication table, which can assist people to memorize multiplication up to 9×9 with ease, was introduced by Chinese math teachers to British students.

British media, including the Guardian, reported that Chinese teachers are bringing the art of math to British schools.

What impressed British teachers a lot is Chinese teachers’ unique teaching methodologies.

British media said that students are required to acquire the same knowledge repeatedly, and their ability is gradually improved as the courses goes deeper. In addition, Chinese math teachers continually correct errors that students make to make sure that all students can keep up with the course.

The Chinese teachers’ method in teaching math is not rote memorization, it attaches much importance to the understanding of concepts, said Charlie Stripp, director at the National Center for Excellence in the Teaching of Mathematics (UK), adding that remembering the multiplication table is the foundation for students to learn math.

Moreover, since September 2017, some UK primary schools adopted math textbooks, exercise books, and teachers’ guides published by the Shanghai Century Publishing (SCP), which were widely welcomed by British students and teachers.

Test results of the 2013 Programme for International Student Assessment (PISA) released by the Organization for Economic Co-operation and Development (OECD) show that Shanghai students ranked on top for math, while British students ranked 26th.

The Department for Education of the UK announced in July 2016 that it would allocate $54 million for 8,000 primary schools in the country for the purpose of introducing math learning methods from Asian countries, especially China.

Why do giant Pandas eat bamboo rather than meat

Chinese scientist have made progress in revealing more details of giant pandas feeding habits and why they eat different varieties of bamboo rather than meat although their teeth and the construction of digestive tube is similar to carnivores, reported on Feb. 26.

Despite having more physical characteristics suitable for eating bamboos, including more developed molars when compared alongside other carnivores as well as a relatively larger head, pandas cannot absorb energy by digesting cellulose as well as herbivores.

However, they do better in digesting starch than other carnivores, and they usually choose the starchiest part of bamboo trees for consumption, according to a recent survey conducted by Zhang Wenping who is a researcher at the Chengdu Research Base of Giant Panda Breeding, Science and Technology Daily reported on Feb. 25.

The research paper, “Age-associated microbiome shows the giant panda lives on hemicelluloses, and not on cellulose”, has been published on the ISME Journal.

By analyzing fecal matter from giant pandas, it was confirmed that giant pandas can only obtain energy from starch, hemicelluloses and pectin in bamboos.

In addition, the survey reveals why giant pandas choose bamboos as their staple food, indicating that bamboos, widely distributed in the wild, are easy for the bears to obtain, and they contains more starch than other woody plants.

Also, giant pandas consume little energy each day, indicating that their relatively heavy weight can be maintained by just feeding on bamboo.

Giant pandas have evolved with more than 2 million years of history in which they have feed on bamboo. Previous gene sequencing research also shows that the creature lost the gene T1R1 in the process of evolution and, therefore, started to eat bamboo.

Chinese scientists find key genes that will help increase rice yields and quality

Chinese scientists have found a gene that could be key in breeding a higher-quality type of rice and allowing the production of the grain to increase by at least 7 percent, Xinhua reported.

The gene lgy3 was extracted from long and slender grains by a research team led by Fu Xiangdong from the Institute of Genetic and Developmental Biology at the Chinese Academy of Sciences. It will increase both grain quality and yield potential of rice.

Then, by injecting the new gene into NPT1, an existing gene found in some rice varieties, rice yield potential can be improved while also improving the quality.

Fu and his team spent eight years on the research. The report was published on Tuesday on the website of Nature Research.

“This practical research will benefit more people,” said a breeding expert, adding that the new gene will be applied to the breeding and promotion of super rice in the future.

The research has directly provided important and precious genes for high-yield and high-quality molecular programming, said a professor of botany from Oxford University.

Construction of Beijing-Xiongan intercity rail starts

An intercity railway linking Beijing and the Xiongan New Area started construction on Feb. 28.

The 92.4-kilometer line will be constructed with a total investment of 33.53 billion yuan ($5.3 billion). Designed to stop at five stations, trains running on the line will take passengers between Beijing and Xiongan in 30 minutes in a single trip.