Lessons for Indian retail from China’s Intime’s transformative New Retail vision

The Alibaba 11.11 Global Shopping Festival kicked off at midnight of November 10-11. Within the first few hours the shopping festival exceeded $12 billion in gross merchandising volume (GMV). Offering more than 200,000 brands, which are available both online and offline, the festival sees the participation of hundreds of millions of customers.

The event is being held in Hangzhou, China. On the first day, Chen Xiaodong, CEO of Intime Retail Group, shared the success story of the erstwhile brick and mortal retail chain, which embraced digital transformation.

Starting with a department store in 1998 in Hangzhou, Intime grew to become a domestic retail market leader and was listed on the Hong Kong Stock Exchange in 2007. Intime was privatised in 2017, following its decision to partner with Alibaba, and adopted its transformative New Retail vision to create a brick-and-mortar commerce model for the future.

Intime was the first department store chain to implement Alipay in 2013, and the first physical retail business to adopt a 100 per cent cloud-hosted operating model in China. This digital-first approach permeates the day-to-day operations of each Intime store from membership to payments and logistics.

Xiaodong shared that by adopting digital first products and strategies, the retail store was able to achieve seamless online to offline transition and reduce the average transaction window from 3.5 minutes to 58 seconds, vastly improving the customer experience.

He said, “We are working on products and technologies that in the next 10 years will become the shape of new retail.”

Key features of the Intime shopping experience

Miaojie app: Even before a shopper steps into an Intime outlet, they are able to access a wealth of information through Intime’s proprietary Miaojie app from available parking spaces to brands carried in store to information on whether items are in stock at any particular store. The app also serves as an in-store shopping assistant, enabling shoppers to review details of a product while being able to touch and feel the items in-person.

Membership Program: Intime’s membership program is integrated with the Taobao and Tmall platforms, enabling seamless access to hundreds of millions of e-commerce shoppers within Alibaba’s ecosystem. Together with Intime’s catchment of shoppers in the vicinity of its stores, the retailer has over 10 million digital members as of September this year.

Cloud-based Point-of-Sale (POS) machines: The traditional transaction process is transformed with Intime’s completely cloud-based unified payment approach across 17,000 POS touchpoints, cutting the average duration of a transaction from around two to three minutes to under 58 seconds.

Magic Mirror: Leveraging Alibaba’s innovative Augmented Reality (AR) technology, shoppers at Intime can try on a wide range of makeup products virtually and with minimal hassle, even if a particular item is not available in the store. Intime is also able to glean additional consumer insights based on shoppers’ feedback while using the Magic Mirror, which helps brands determine follow-up marketing techniques.

Automatic Vending Machine: Developed jointly with cosmetic brands, the vending machine concept is proving a draw to the younger generation of consumers. Apart from dispensing product samples, shoppers can scan a QR code to visit the brand’s Tmall store to complete the purchase and collect the product from the machine, representing yet another online and offline convergence under Alibaba’s New Retail vision.

Fulfilment Centers: Adopting the landmark fulfilment model by Freshippo (also known as Hema), each Intime stores will eventually serve as a fulfilment center, delivering orders made via the Miaojie app or in-store to shoppers within a 10 km radius of an outlet within two hours and next day delivery for shoppers within a 10-30 km radius via a solution enabled by Alibaba’s Cainiao. Exemplifying the tech-first approach adopted by the retailer, Intime also deploys logistics robots powered by Cainiao’s technology.

Digital Warehouses: Taking the fulfilment model a step further, Intime is also building 10 digital warehouses across China acting as centralised conduits for smart inventory, packaging and delivery to shoppers. These digital warehouses will be stocked based on predictions surfaced by data intelligence trends.

Offline Retail Experiences: The Beijing Intime branch created the world’s first smart nursing room, providing comfortable sofas, cribs, heating appliances and a Tmall vending machine with baby formula, diapers and other maternity essentials. Some Intime stores have Tmall Service Centers, where consumers can book appointments through their phones to get services while they shop in the mall, such as tailoring, handbag cleaning and watch repair. The West Lake Intime Shopping Mall in Hangzhou also pioneered a smart public toilet, where shoppers can purchase various sanitary products from vending machines and access Magic Mirrors while waiting.