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Translated Article of the Week: New Retail Model and Artificial Intelligence Are the Next Big Things in China

The madness for the sharing economy has cooled down in China, as represented by the bankruptcy of a few second- and third-tier biking-sharing companies. Power bank sharing companies that received jaw-dropping funding in early 2017 are not only dealing with their own legal and financial problems but also threat from mobile phone companies as wireless charging function becomes more prevalent. Other startups relying on the sharing economy are also struggling in terms of the speed and the scale of funding.

“‘New Retail Model’ is the current hot topic in the tech industry,” said Allen Zhu, Managing Director of GSR Venture. The New Retail Model restructures the elements of traditional businesses, including rebuilding manufacture procedures, shopping experiences, and relationships between businesses and customers. “The success of this new model will largely be attributed to the Millennials. The cost of groceries is not as important to them compared to older generations. Instead, they value convenience much more, which is exactly the purpose of the New Retail Model.”

 

 

A self-service retail store is one of the first few ideas being brought to life under the New Retail Model. These stores take up less space than regular convenient stores and charge customers through WeChat Pay or Alipay by asking them to scan the QR Codes printed on the shelves. In 2017, there are more than 10 newly established startups that operate self-service retail stores, which received funding from more than 50 investors. The reason that self-service retail stores have become the new love child of venture capital is that it overturns the traditional transaction chain, removing cashiers from the procedure, and the technologies embedded in the stores can collect more data about customers.

In addition to the New Retail Model, Artificial Intelligence (AI) is also an uprising trend and will continue to be the center of discussion in the next 10 years.

From a global perspective, tech giants such as Amazon, Intel, Apple and Facebook have all had breakthroughs in their AI development. Chinese companies are following the trend as AI development is supported by the government and favored by investors; from 2010 to 2017, 66.8 billion Chinese Yuan (approximately $10.1 billion USD) was invested in the AI industry.

“At the moment, AI is mainly used by enterprise customers, but consumer-facing AI products and services are quickly rising following the release of Google Pixel 2 and iPhone X,” said Allen Zhu. “We are in an AI first era. Any tech startups that don’t have AI elements in their products or services will have a hard time establishing competitive advantages.”

Source: Tecent Tech