Digitalisation in the Food Trade – From New Retail through Virtual und Augmented Reality Shopping - An Interview with Alibaba

Karl Wehner, Managing Director Alibaba Group – Germany, Austria, Switzerland, CEE & Turkey, speaks in an interview with Anuga about the chances and possibilities for digitalisation in the food trade and the differences between Chinese and European consumers.

Online food trade and delivery services have been booming not only since the pandemic. What role does Alibaba play here? How important is this business for Alibaba?

Like with all aspects of the trade, we at Alibaba do not think in categories online or offline – that also applies for the food trade. Our Freshippo supermarket chain in China, for example, is of course a supermarket, but each stationary business is also a fulfilment centre from which deliveries can be processed. And these not only of fresh food products, but also of dishes freshly prepared in the in-house Freshippo restaurant and anything else found in the assortment. The customer orders with an app, pays with Alipay, and we deliver within a three-kilometre radius within 30 minutes. We call that "New Retail" – this means the digitalisation of the trade, which, from our perspective, is a logical step toward best reaching the consumers of today and tomorrow. This of course also includes delivery logistics. Freshippo in the meantime has hundreds of branches in China.

From your perspective, what are other trends in the trade that we have to keep an eye on?

In addition to the general digitalisation of the trade, I would particularly mention developments like livestreaming, but also VR and AR shopping. They make it possible to address consumers as effectively as possible, even when they are not physically in my business at the moment. Livestreaming, for example, was an exceptional way for brands and traders to directly interact with their customers during the pandemic – German companies like dm, Beurer or the Confiserie Lauenstein have achieved enormous success on the Chinese market in this way. And that at a time at which domestic business was often difficult. Ikea is one of the pioneers in the field of 3D shopping in China. Here, users can navigate through the three-dimensionally-visualised Shanghai furniture store with the app from Tmall, the B2C platform from Alibaba. Our livestreaming platform Taobao Live also permanently integrates new functions within their stream, for example, AI-controlled hosts, augmented reality beauty applications or 3D home decoration. There we also work on things like intelligent livestreaming cameras that can process language, visual instructions and hand gestures in real time.

What differences do you see between the European and the Asian markets?

We see the main difference on the consumer side. Chinese consumers are on average a great deal more knowledgeable and interested in technology than their European counterparts. Where we are still happy to think about "mobile first" and are pleased when we receive a response to a service enquiry by e-mail on the same day, "mobile only" prevails in China, and a response is expected in chat within seconds. This speed and these expectations can pose a challenge for European brands that want to address Chinese consumers. However, China also offers a great opportunity to learn and to in turn adopt impulses for the domestic market – in addition to the fact that the country is one of the largest sales markets in the world. The Alibaba ecosystem hangs the stirrups very low for its partner brands here.