An Original: How Amazon and Whole Foods can learn from China
Even before Amazon acquired Whole Foods, Alibaba had been opening up offline supermarkets that also function as fulfillment centers. On GGV’s CEO China trip last month, we brought some team members of our US portfolio companies to visit Alibaba’s supermarket, Hema, as well as another avant-garde supermarket owned by Yonghui called Super Species. Here are notes, photos, and videos on the two supermarkets that illustrate why there’s something to learn from the grocery shopping experience in China.
E-commerce giants go all out for Singles Day.
Chinese e-commerce companies are making intense preparations for their most important day of the year: Singles Day (11/11), China’s Black Friday. Since its inception in 2009, Singles Day (双十一) has evolved into the largest online shopping event in the world. Last year, Alibaba alone reported $18 billion of sales on November 11, greater than sales by US companies on Black Friday and Cyber Monday combined.
Singles Day is nicknamed “Hand-chopping Festival” (剁手节) in China, because people spend so much money that they want to chop off their own hands to prevent themselves from buying more things.
According to the State Post Bureau of China, more than 1.5 billion packages are expected to be delivered to Chinese shoppers from November 11 through 16 this year.
CEOs of e-commerce companies are busy making news to generate momentum for the shopping festival, which was invented by Alibaba.
Jack Ma is starring in a 20-minute movie about Tai Chi (a Chinese martial art) called “GSD” (功守道) that will air on Singles Day. He also sang the theme song for the movie together with renowned singer Faye Wong.
Richard Liu, founder and CEO of JD.com, gave a widely publicized speech at his old middle school in the city of Suqian, and announced a slew of new benefits for JD.com’s employees, including a new campus for a top school in the district of Beijing where JD.com’s HQ is located.
JD.com is also known for displaying banners with militant slogans around its offices to motivate its employees in the period leading up to Singles Day. Take a look at these banners from past years:
Facebook is reportedly testing a Red Envelope feature that would allow users to send money to one another. It is most likely inspired by Tencent’s WeChat, where Chinese people have been sending one another red packets for years.
In China, the WeChat red packet is not just a peer-to-peer payment method. It’s also a game. When you send a WeChat red packet to a WeChat group, you can choose to randomize the amount given to each member. This creates numerous scenarios for gamifying the payment process with red packets, for example:
- Special occasions like Chinese New Year (On Chinese New Year’s Eve in 2017,$14 billion of red packets were exchanged via WeChat);
- As “courtesy money” for asking a favor/thanking people (e.g. if you send a survey to a WeChat group, you can throw in a red packet); or
- Gambling (e.g. whoever gets a number with “8” in the amount wins).
Some reporters have commented that Facebook is gradually becoming a “WeChat clone.”
Smart vending machine raises $9 million.
Mei Wei Sheng Huo (美味生活, which literally means “delicious life”), a company that produces smart vending machines for offices, raised $9 million in Series A. The round was led by GGV Capital, with participation from ZhenFund, Matrix Partners China, and K2VC.
Mei Wei Sheng Huo’s vending machines allow office workers to purchase meals, fruits, drinks, and snacks without stepping out of the building, and feature a smart checkout process powered by QR code and mobile payment. There are currently several thousand of these vending machines in 20 Chinese cities. The company embodies New Retail, the phenomenon in China where traditional retail is being transformed by technology. Read our primer on New Retail and our other investments in this field.
More Women in Chinese Tech Named “Most Powerful in the World.”
Last week, Forbes released The World’s Most Powerful Women In Tech 2017 list. More and more women in China’s fast-growing tech scene are making the list, including Lucy Peng (co-founder of Alibaba and chairman of Ant Financial) and Jean Liu (Preident of Didi Chuxing). Both Alibaba and Didi Chuxing are GGV portfolio companies. Jenny Lee, GGV’s managing partner who drives our investments in the frontier tech sector, was ranked No. 16 globally.