The 4th MasterClass about Digidutch is analysing the new concept in China of New Retail. How did it come up? What drives New Retail? Which models can we see? Which business structure to setup? And which legal implications on customer data arise?

1. ECOMMERCE MASTERCLASSES
4th Edition
NEW RETAIL
THE INS AND OUTS OF “NEW RETAIL”
by DigiDutch
Christine Wang
Emma Shen
Dominiek Pouwer

2. THE INS AND OUTS OF “NEW RETAIL”
TOPICS
Dominiek Pouwer - Director, TMO Group
▸ Development to New Retail
▸ New Retail - 5 Case Studies
Christine Wang – Manager of Business Development, Vistra
▸ Business Structure - Offline Legal Entities & Online Licenses
Emma Shen – Attorney-at-law Senior Associate, Bonnard Lawson
▸ Legal Implications New Retail
▸ DigiDutch
▸ Deep Dive
▸ Q&A

3. THE INS AND OUTS OF “NEW RETAIL”
THE PROBLEM

4. THE INS AND OUTS OF “NEW RETAIL”
KEYWORDS
Cloud
Machine Learning
Big Data
AI
iOT
O2O
Omni-Channel Commerce
New Retail
SoLoMo

5. THE INS AND OUTS OF “NEW RETAIL”
DRIVERS IN O2O - QR CODE
Source: Technode, 2018
Source: Google Trends - ⼆二维码” (QR code)

6. THE INS AND OUTS OF “NEW RETAIL”
DRIVERS O2O - MOBILE PAYMENT
Source: Analysys c/o Mary Meeker’s 2017 Internet Trends Report(slide 219)

7. THE INS AND OUTS OF “NEW RETAIL”
O2O - ONLINE TO OFFLINE - OFFLINE TO ONLINE
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Group Buying
Mobile Payment
Alipay APP
New Retail
Mobile Payment
Wechat Pay
Self Ordering
KFC
Omni-Channel
Fashion (Coupon)
Bike-sharing
OFO/Mobike
Store Pick up JD
Family Mart / Lawson
Store Pick up
Cainiao
Reservation
Self-order
Food Delivery
APP
DIGITALIZATION
Social
Location
Mobile

8. THE INS AND OUTS OF “NEW RETAIL”
OMNI-CHANNEL COMMERCE
100%9:41 AM 100%9:41 AM 100%9:41 AM 100%9:41 AM
APP
Self-Order
OFFLINE
ONLINE
Warehouse Management Logistics / Last mile delivery
ERP System
OMS / CRM / Data Mining
Product
Management
Stock
Management
Pricing & Promotion
Management
Customer
Management
Content
Management
Sales Order
Management
Statistics &
Reporting
Source: TMO Group, 2018

9. THE INS AND OUTS OF “NEW RETAIL”
NEW RETAIL
Product
Management
Stock
Management
Pricing & Promotion
Management
Customer
Management
Content
Management
Sales Order
Management
Statistics &
Reporting
APP
OFFLINE ONLINE
Warehouse Management Logistics / Last mile delivery
ERP System
OMS / CRM / Machine Learning / AI
Source: TMO Group, 2018

10. THE INS AND OUTS OF “NEW RETAIL”
NEW RETAIL
“New Retail refers to the integration of online and
offline retail, and logistics across a single value
chain, powered by data technology. It is expected to
hold the solution for physical retailers and pure-play
e-tailers and propel the industry’s transformation”
Source: Fung Global Retail & Technology, March 27, 2017

11. THE INS AND OUTS OF “NEW RETAIL”
5 CASE STUDIES IN NEW RETAIL
▸ New Retail - Hybrid
▸ HeMa - Standardization vs. Experiential + Distribution
▸ Riso - Experiential + Distribution
▸ New Retail - Experiential
▸ Starbucks Roastery - Experience & Lifestyle
▸ New Retail - Functional
▸ XiaoMi - Brand Stores - Distribution & After-Sales support
▸ McDonald’s - Self Ordering

12. HYBRID | HE MA | THE EXPERIENCE
Source: TMO Group, 2018

13. Source: TMO Group, 2018
HYBRID | HE MA | THE EXPERIENCE
Source: TMO Group, 2018

14. Source: TMO Group, 2018
HYBRID | HE MA | THE ORDER PROCESS

15. THE INS AND OUTS OF “NEW RETAIL”
HE MA | FROM OFFLINE TO ONLINE FULFILLMENT PROCESS
Source: TMO Group, 2018

16. THE INS AND OUTS OF “NEW RETAIL”
INTERESTING FACTS HE MA
▸ 50% of the orders are placed online
▸ Delivers within a radius of 3 km within 30 minutes
▸ Traffic Generator - Fresh Seafood
▸ Increased efficiency Floor space by 300 - 500%
▸ High Customer Loyalty - Users place 4.5 order per month
▸ 50% of He Ma team are Engineers

17. HYBRID | RISO | THE EXPERIENCE
Source: TMO Group, 2018

18. HYBRID | RISO | THE EXPERIENCE
Source: TMO Group, 2018
HYBRID | RISO | THE ORDER PROCESS

19. THE INS AND OUTS OF “NEW RETAIL”
KEY TAKEAWAYS HYBRID
▸ Different Fresh Food “Islands”
▸ 20-30% Floor space focussed Restaurants & Dining
▸ Staff allocated for Payment, Service Fulfillment and Picking &
Packing
▸ Own packaged Food Concepts
▸ Offer Brand Spaces (Starbucks, ZXT)
▸ iOT Vending Machines
▸ Optimized for Online Fulfillment

20. EXPERIENTIAL | STARBUCKS ROASTERY (FLAGSHIP) | THE EXPERIENCE
Source: TMO Group, 2018

21. EXPERIENTIAL | STARBUCKS ROASTERY (FLAGSHIP) | THE ORDER PROCESS
Source: TMO Group, 2018

22. THE INS AND OUTS OF “NEW RETAIL”
KEY TAKEAWAYS EXPERIENTIAL
▸ Different Service Stations per floor
▸ Separated Order & Payment + Service Delivery
▸ Order & Service Delivery fully connected through internet
▸ 30% Staff equipped with Mobile POS & Printer
▸ Mobile Centric - APP - Value Card (QR) & Mobile Payment
▸ Loyalty Point System

23. Source: Engadget, 2017
FUNCTIONAL | XIAOMI BRAND STORE
Source: Engadget, 2017

24. FUNCTIONAL | MC DONALD’S
Source: TMO Group, 2018

25. THE INS AND OUTS OF “NEW RETAIL”
KEY TAKEAWAYS FUNCTIONAL
▸ XiaoMi - which created its brands Online use retail for:
▸ After Service & Customer Support
▸ Product Experience & Feedback
▸ Fast Food & Food industry use New Retail methods for:
▸ Separated Order & Payment + Service Delivery
▸ Increase overall Operational Efficiency
▸ Reduce queue time / deliver at table
▸ Mobile Centric - Mobile Payment

26. THE INS AND OUTS OF “NEW RETAIL”
OVERALL TAKEAWAYS
▸ Digital-ization
▸ Omnichannel-ization
▸ Platform-ization
▸ Entertainm-ization
Source: Fung Global Retail & Technology, March 27, 2017

27. OFFLINE LEGAL ENTITIES &
ONLINE LICENSES
UP NEXT
Christine Wang – Manager of Business Development, Vistra

28. THE INS AND OUTS OF “NEW RETAIL”
‘NEW RETAIL’ LEGAL STRUCTURE
Business scope of the WFOE
● Import, Export and Wholesale of (Garments,
daily commodities, electricity appliances, toys,
sports goods, computer hardware, medical
devices, infant products, beauty-care and
cosmetics, packaged food, beverages, etc.)
● Retail & online retail
● Software development, information
technology services and relevant consultancy
● Food & Beverage Services (HE MA)

29. THE INS AND OUTS OF “NEW RETAIL”
Online platform - ICP Registration
▸ A legal entity registered in China
Procedure: The IT agent will apply with relevant bureau on behalf of the client and it
takes about 30 working days to obtain the registration.
Retail Store
▸ A lease signed at least 12 months for a commercial premise
Prepaid card
▸ Registration at AIC should be filed within 30 days
● Registered capital no less than RMB 1M for company incorporated less then 1 year
● Total revenue reach to RMB 5 M for the last financial year
SPECIAL REQUIREMENTS:

30. THE INS AND OUTS OF “NEW RETAIL”
’NEW RETAIL’ SPECIAL LICENSES
Special Licenses
▸ Import & Export License
▸ Food Circulation Permit (packaged food, infant formula,
baby food, etc.)
▸ Alcohol Permit
▸ Medical Device Operating Permit
▸ Inspection & quarantine license (fresh meat & seafood)
▸ F&B service license & Public Hygiene Permit

31. THE INS AND OUTS OF “NEW RETAIL”
CASE STUDY
RETAIL STORE (S)
(BRANCH)
Online platform & APP
WFOE
WFOE Business
Scope:
• Trading & retail
• IT & Software
Legal Structure

32. LEGAL IMPLICATIONS IN NEW
RETAIL
UP NEXT
Emma Shen – Attorney-at-law Senior Associate - Bonnard Lawson

33. ADVERTISING LAW: DOS AND DON’TS
Misleading
terms are not
allowed
Restrictions on
endorsement
by celebrity/
KOLs
Recipient’s
right to
unsubscribe
advertisements
The word “Ad”
must be
clearly marked

34. EXAMPLE: ONE CLICK TO CLOSE POP-UP AD

35. CYBERSECURITY LAW: HOW TO TREAT BIG DATA
Personal Data:
Name, age, contact
Facial Recognition,
Fingerprint,
Buying preference
…
Important Data
User’s
permission for
data
collection
Data
Localization:
• Server in
China
• Restrictions
on data
cross-border
data transfer

36. EXAMPLE: ICLOUD IN CHINA OPERATED BY GUIZHOU-CLOUD

37. BID DATA AS BUSINESS SECRET
Why is Big Data
important?
How to protect your Big Data?
• In your labor contract…
• In your contract with cloud service
provider and external
consultants…
• With your big data infrastructure…

38. CONSUMER RIGHT PROTECTION
Extend from online to offline sales:
i.e.: Initiated by China Consumers Association on
2018 3.15, Suning, Walmart and JD have committed
to the 7-days unconditional return period for offline
sales
Be careful with differentiated
treatment based on big data analysis:
i.e.: Pricing discrimination between
existing and new customers

39. DIGIDUTCH
UP NEXT

40. “DigiDutch – an abbrev. on Digital Dutch is a cooperation of
Dutch companies or management engaged in different parts
of the eCommerce process.
The strength of DigiDutch is the Trading/Business DNA of
companies accelerated by the long time exposure to
eCommerce in the Dutch home market.
Our teams bringing a unique chemistry between Chinese and
Dutch Innovation & Trading spirit striving to deliver exceptional
eCommerce Experiences.”
WHAT DO WE STAND FOR

41. WHAT WE CAN DO FOR YOU
Legal
&
Administration
Online Channels
&
Branding
Operations
&
Logistics
Marketing
&
Engagement
Customer
Service
&
Optimization

42. Kids/
Education
F&B Fashion/Cosmetics Tech/B2B
SOME OF OUR CLIENTS

43. DigiDutch
GET STARTED WITH DIGIDUTCH
Contact our Speakers:
Christine Wang - christine.Wang@vistra.com
Emma Shen- es@ilf-asia.com
Dominiek Pouwer - dominiek@tmogroup.asia