HKTVMall: Leading Technology Evolution for eCommerce Industry

Leading Technology Evolution for
eCommerce Industry
Jelly Zhou
CEO (Hong Kong)
16 Aug 2022

02
CONTENTS
DISCLAIMER
This presentation and subsequent discussions may contain forward-looking statements and information that involve risks, uncertainties and
assumptions. Forward-looking statements are all statements that concern plans, objectives, goals, strategies, future events or performance and
underlying assumptions and other statements that are other than statements of historical fact, including, but not limited to, those that are identified by
the use of words such as "anticipates,'' "believes,'' "estimates,'' "expects,'' "intends,'' "plans,'' "predicts,'' "projects'‘, “target” and similar expressions.
The information included is solely for the use in this presentation and certain information has not been independently verified. No representations or
warranties, expressed or implied, are made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the
information or opinions presented or contained in this presentation. The performance and the results of operations of the Group contained within this
presentation are historical in nature, and past performance is no guarantee of the future results of the Group. Any forward-looking statements and
opinions contained within this presentation are based on current plans, estimates and projections, and therefore involve risks and uncertainties. Actual
results may differ materially from expectations discussed in such forward-looking statements and opinions.
Certain information in this presentation is extracted from Google Analytics and rounded to the nearest thousand. The computation method and basis of
which have not been verified. The data could be overlapping (a) between different type of devices among TV Programme Platform and among Online
Shopping Platform if the same user using more than one devices for browsing our Online Shopping Platform at the same time; (b) or the same user using
HKTVmall app to browse the HKTVmall web-page; (c) if the same user using the same device to browse the online shopping mall through different
channels/medias on the same device. The information for the same period can be changed at different point of time when capturing the data as Google
Analytics performs the analysis on sampling basis. According to Google Analytics, the definition of “User” is “Users that have had at least one session
within the selected date range, which includes both new and returning users.” The above data are unaudited and are not indicative of the Company’s
business performance, financial condition or growth prospect. Readers should not place reliance on these data.
For figures generated from internal systems and relevant platforms, which were rounded up to nearest integral percentage or thousand, are unaudited
and for reference only.
We are not required to correct or update any such statement or information to either reflect events or circumstances that occur after the date the
statement or information is made or to account for unanticipated events or otherwise.
2

01
02
03
Our Digital Ecosystem
CONTENTS
CONTENTS
Technology Applications at HKTVmall
Global Strategy with Brand New Invention

HKTV’s Mission
In Hong Kong
To maintain Hong Kong as
the “Shoppers’ Paradise”
To bring technology into HK
retail
Beyond Hong Kong
To be an “Technology Enabler” to
commercialise our inhouse systems,
providing an end-to-end technical
solution to other market players

Full Service Marketplace
HKTVmall carrying over
1,000,000 product items
~570,000 Sq. Ft. Automated
Fulfilment Centers
Largest HK Residential
Distribution Network
~350 Trucks in operation
~89 O2O Shops
& 4 Supermarkets
Business Process Optimization By Leveraging Technology

20,000+ Brands Available in HKTVmall
The Largest Online Shopping Mall in Hong Kong
- Offering over 1,000,000 product choices in 14 categories from more than 20,000 brands
& partnering with over 5,500 merchants and suppliers

A “combined model” to compete against “grocery-only model”
A shopping mall model to compete against an e-shop
Value Creation - Freedom of Choice

-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Value of Retail Sales (Supermarket Type) YOY %
Value of Retail Sales (Department Store Type) YOY %
HKTVmall GMV YOY %
Outperformed Overall Retail Market
Source : Report on Monthly Survey of Retail Sales – issued by Census and Statistics Department Hong Kong Special Administrative Region
Remarkable Growth
Remains throughout
Economic Downturn
D
D
D
D
S
S
S
S
D
S
Jan 2022
Q1 Q2 Q3 Q4
S
D

Sustainable Growth Agile by
Unavoidable Structural Change in Consumer Behavior
Source: GMV on Order Intake and Average Daily Order – Internal platform and system
Gross Merchandise Value (“GMV”) on order intake represents the total gross sales dollar value for merchandise sold through a particular marketplace over a certain timeframe, before
deduction of any discounts offered by the marketplace, rebate used, cancellation and returns of merchandise sold.
Average Daily
Order
Average Daily
GMV on Order
Intake (HK$mn)

Growing Purchase Population in Hong Kong
22.6% HK population aged between 20-74 made purchases at HKTVmall in 2021
14 times in 6 years’ time
Source: Internal System
1. Source: Population by Sex and Age Group as published by the Census and Statistics Department, The Government of Hong Kong Special Administrative Region
(https://www.censtatd.gov.hk/en/web_table.html?id=1A)

• No appliable system available in the market
• 3rd party development totally failed (wasted $millions & 9 months)
• They didn’t understand the need
• Developed in India and Mainland
Our “Evolving” App & System Design

• A pass-through model
• Same as “Finger Shopping” – how can we do better
• Over-confident on “HKTV” brand
• “Pass-through” model failed, started buy-and-sell model
few months later
Merchants Customers
Platform
Our “Evolving” Business Model

• Lack of experience
• Difficult to forecast the sales & resources allocation
• Keep relocating and expanding the warehouses
(from 15,000 to 500,000 sq ft in past 6 years)
Our “Evolving” Warehouses

1st Phase – Fully manual
Our “Evolving” Order Picking Operation

2nd Phase – Batch Packing
Our “Evolving” Order Picking Operation

3rd Phase – Fully Automated
Our “Evolving” Order Pick Operation

1 Customer places order on
online shopping mall.
3
Items in an order are consolidated and
sorted according to delivery route
through automated robotics.
4
Order is routed to customer’s home /
office or self pick-up points, including
self-operated O2O shops, retail partner
shops, gasoline stations and e-lockers.
Merchants
Self-owned Warehouse
(AGV, Carousel System, Pick by Light System)
Upon receiving customer’s
order, merchants deliver
the items to HKTVmall
depot centre.
Goods are picked & packed from HKTVmall
self-owned inventory.
Parcels are transported by efficiently managed
trucks with optimized routes, cabin temperature
and humidity monitoring.
5
E-Lockers
Gasoline Station
Customer’s
Home & Office
Self-operated
O2O Shop
Depot Centre
(Sorting System)
Retail
Partner Shop
2b
2a
HKTVmall is the Entire End-to-End Journey for Customers
- eCommerce is more than an User Interface

~570,000 sq. ft. Automated Fulfilment Centers
Kwai Chung
Frozen/Chilled Food Factory
NEW Tsing Yi
Frozen Food Warehouse
Tseung Kwan O HQ
eFulfilment Center
- Strategic locations and functions for full range of products and complementary support
Tsing Yi
eFulfilment Center
Tuen Mun
Distribution Centre

Traditional Retailing
Man to Goods
New Retailing
Goods to Man
Scalable Fulfilment Centres & Automation
- Scalability, Cost Efficiency & Accuracy

Key Metrics
Operation 364 x 16
Manpower
120 workers x 2 shifts
Daily Order 35,000
Footprint 140,000 sq. ft.
Daily Pick Item ~400,000
Basket Size ~$500
Carousel System

Key Metrics
Operation 364 x 16
Manpower
Daily Order 35,000
Basket Size ~$500
Automated Guided Vehicle System (AGV)

Key Metrics
Operation 364 x 16
Manpower
Daily Order 35,000
Basket Size ~$500
Sorting System

Chilled Compartment
(0-4°C)
Frozen Compartment
(-18°C )
Ambient
Compartment
3-Temperature Compartment Truck
- Deliver different items at once, providing convenience & helping customers to save waiting time for
delivery

Temperature & Packing
Check when receiving from
merchants
Trucks Equipped with
Proper Temperature
Compartments
Storage in Isolation
Bag with Ice Pack
Embedded Beacon
Connecting to Delivery
Device
Enhanced Service Levels with Technology
- Stringent Control on Frozen & Chilled Food Delivery

Enhanced Service Levels with Technology
- Real-time Truck Monitoring System
• Real time temperature monitoring
• Door Open time
• Fast track of delivery progress

Phase I (by end of 1H 2022)
Enhanced Service Levels
- Pledge to Offer the Best Last Mile Delivery
Order by 1pm
Will be Delivered by
Next Day
Phase II (1H 2023)
Order by Midnight
Will be Delivered by
Next Day
• Earlier order cut-off time
• Additional 40 delivery trucks in
operation
• Expanding fulfilment facilities by
additional 150,000 – 200,000 sq. ft.
• Stock existing 85% SKU in our
warehouse

O2O Strategy
Offline Physical Stores (average ~350 Sq. Ft.)
Visibility,
Trust &
Customer
Acquisition
Customer
Service
Retail Sales &
HKTVexpress
In-store
Pick-up
Walking Distance
Distribution Hub
Online Marketplace
One-stop Online
Shopping Platform
Order
Placing
Showrooming
Product Diversity
Core Business & Profit Center Complementary to Online

Dec
2017
Dec
2018
Dec
2019
: 1
: 15
: 39
: 60
Expanding Offline Pick-Up Format Covering 220+ Points
Dec
2016
HKTVmall O2O Shops including 4 HKTV Supermarkets
Win-Win Outsourced Pick-up
Partners
Now:
Outsourced Pick-up points: 19
Now
:68
Now:
E-lockers: 110
Dec
2020
:93
Dec
2020
Dec
2021
NOW
: 68
: 93
: 93
* As of 4 Aug 2022

01
02
03
Our Digital Ecosystem
CONTENTS
CONTENTS
Technology Applications at HKTVmall
Global Future Strategy with Brand New Invention

START
2014
The journey commenced in 2014 when HKTV started
developing the e-commerce platform – HKTVmall.
2018
2019
2020
Feb
Ecommerce
Core Platform
Feb
EXCHANGE
Communication Channel
with Merchants
2015
2016
Apr
OIX
Order Information
Exchange
Nov
DDRS
Dynamic Delivery
Route System
Nov
SSO
Single Sign-On
(Internal)
2017
Oct
1st WMS
Warehouse Management System
integrated with automated
robotics
Feb
AGV WMS
Automated Guided
Vehicle Warehouse
Management
System
May
1st API Partner
for Citi Pay with Points
- built in 88 days,
provide API
Jun
1st enabler
for HSBC P2P
wallet for B2C
platform, provide
API
Feb
FWMS
Frozen
Warehouse
Management
System
Jun
MMS
Merchant
Management
System
Jun
LGWMS
Large Goods
Warehouse
Management
System
Dec
Launch of Digital
Insurance products
on HKTVmall, provide
API
Dec
IMAX
Inventory
Material Exchange
Jan
2nd WMS
Warehouse Management System
integrated with automated robotics
Sept
PSOS
Physical Shop Operation
Supporting System
Jun
Citibank’ s Direct
Payment Channel by
Cobrand Card, provide
API
Sept
HKTVpay
Pass through E-wallet
function embedded in
HKTV mobile App
Sept
ODS
Outsourced Driver
System
Oct
Takeaway
Launch of takeaway
function in HKTV Mobile
App
Jul
HSS
Mass Messaging, Email & App
Notification Blasting System
Jul
Push Server
App Notification
Blasting System
Dec
MABS
Merchant Ad Booking
System
Aug
Chatbot
Conversational AI
Sept
Merchant
Single Sign-On
Dec
CSIS
Customer Support Integrated
System
Oct
HKTVmall Lite
Mobile App for Golden
Age Users
Feb
PSS
Package Sorting
System
Aug
Super Follow
Launch of “Follow” button to
acquire loyal customers
Nov
Community
Interactive communication platform
between merchants, customers and
marketplace operators
Nov
Open Databank
1st and largest to open data
bank on merchants & consumers
in HK
Aug
POS
Point of Sale
Mar
Real-time API Connection
to Merchant WMS
Solution Journey
Building and End-to-End Solution from Scratch

Fully Devoted to Digital Ecosystem
- A traffic driver and go-to digital platform for customers and merchants. A digital eco-system is a dynamic,
ever-evolving integration of all digital channels that ensure the total experience for customers and real-time data collection.
Content &
Entertainment
Digital
Lifestyle
Smart
Mobility
Social
Engagement
Customers
HKTVmall
Merchants
Dynamic
Landing
Page
HKTVLive
Digital
Insurance
Financial
Products
EcoMart
Open
Databank
Elderly App
Social
Commerce
HKTVexpress

Open Databank – Unleashing the Potential of Big Data
Jan 2021
Open Databank
officially launched
on Jan 13
May
HKTV Ad ID converted & inserted
into Salesforce Marketing Cloud for
CRM / retargeting (eDM, App push
notification, HSS message center)
Sep
Integration with HSBC for
HKTVmall Merchant Digital
Trade Financing Project
Nov
Completed Integration with
HKMA CDI for 1-year pilot
(blockchain & datanote)
2,007
Active Merchant
Users
97
Academic
Users
Engaged Institutions :
HKU, CUHK, HKUST,
National University of
Singapore

Open Databank for Intelligent CRM
eDM App Notification
Message
Center
Retrieve Customer Ad
ID for Target Marketing
HKTVmall In-mall Ads
External Platform
01
01
02
02

HKTVexpress - Redefine Supermarket with 3-in-1 Model
HKTVmall Supermarket
Retailing
Retailing
HKTV
express
HKTV
express
01
03
Online
Pick-up
Online
Pick-up
02
24-hour “HKTVexpress”
service to serve fast delivery
for households nearby
Extending offline-to-
online convergence
strategy of new retailing
Currently operating
4 HKTVmall Supermarkets
with more than 8,000
square feet
01
02
03

Over 42,000 Views
21X GMV Increment*
Over 37,000 Views
60X GMV Increment*
*Compared with Daily Average GMV of past 30 days
Fuelled eCommerce Model with Live Shows

Social Commerce as the New Power for Customer Engagement
Customized
Recommendation
Encourage user generated
content to increase customer
interaction, generate more
traffic, explore good quality or
new products on HKTVmall
Explore Something New
“Stickiness to our Apps”
“Customer Loyalty”
“Community”
“Hot topics & Trends”
“Traffic”
“Interaction”

HKTVmall Lite – Benefit Every Range of Customers with Technology
• Easy to use Lite App for golden age
• Account & payment linkage between family
members
• The most loyal customer group
• Core customers for the 2 supermarket chains
(shake their fundamental)

Classified platform - Eco Mart to sell pre-owned items and services,
encourage sustainable shopping
• Free C2C Trading Platform, finding a
new master for customers’
excessive items and have a more
sustainable lifestyle
• Support charities and NGOs for
fund raising and volunteer
recruitment

Unique Fully Automated Retail Store
• Completed the installation for the first “Fully Automated Retail Store” with
pilot run in software and hardware in full swing
• We are confident that the first several “Fully Automated Retail Stores” will
be launched in UK within this year as planned
• To continue enhancing the functions and technology, we will continue to
invest in technology research and development, including imaging artificial
intelligence and automated picking system

Strong Demand
Totally Different Technology Concepts
Amazon Fresh / Tesco
• Installed several hundreds of camera on the ceiling of a normal store
• Using visual analytic technology to analyze every “action” of customers to determine
whether they are buying certain goods and debit credit cards directly
• Bring entry & exit convenience, but no competitive advantage in operating cost
• Require more manpower than a normal store for replenishment and theft prevention

Perfect Solution in Cost Efficiency
More Convenience
Customers can place order anywhere &
anytime to save time queuing in
supermarket
More Variety
Our machine can handle everything,
including chilled and ambient goods in all
shapes & sizes
More Savings
No manpower are required to save labour
costs significantly

What is the talents demand in Hong Kong?

What are the talents we are looking for?
1. We are not looking for “specialists only”
• Not a single skill set could be applied and used over 5 years
Can-do Attitude and High Flexibility
• Passionate to do what they believe
• Open-mind and willing to try what they don’t believe
Resilience
• Not afraid of being criticized, willing to accept the incompetence and eager to
improve it
• Anyone remember how is iPhone 1?

HKTVMall: Leading Technology Evolution for eCommerce Industry

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