Hou Yi: Mobile Internet technology solves the fundamental problem that e-commerce has not solved

Hou Yi, vice president of Alibaba Group and founder and CEO of Box Ma Xiansheng, gave a speech at the Smart Systems Forum in the afternoon. (Image courtesy of BOE)

Economic Daily - China Economic Net Wuhan November 14th "The BOE Global Innovation Partner Conference? 2017" opened today in Wuhan. Hou Yi, vice president of Alibaba Group and founder and CEO of Box Ma Xiansheng, said at the Smart Systems Forum that the birth of mobile Internet and various intelligent hardware has brought technical conditions for the restructuring of the physical retail industry. He believes that the core of new retail The key factor is refactoring, which is to re-construct all the retail links, and then re-construct a new system according to the needs of consumers.

In this process, mobile Internet technology solves several fundamental problems that e-commerce has not solved. The first is the problem with the underground order at any time, and the second is the real-time communication and interaction between the consumer and the store. "Because of the mobile Internet, new retail is possible today." Hou Yi said.

The following is a record of the speech:

Today, I am very honored to share and share with you at the BOE Global Innovation Partners Conference. Box Ma Shengsheng was the first store opened in Jinqiao, Shanghai on January 15 last year. After the whole store was opened, our first physical store was closely integrated with modern logistics. It was also the first time that catering and supermarkets were combined. Today, I will take this opportunity to share with you why the box horse is fresh and has won the consumers. Great welcome, which retail elements have changed? What are the elements of e-commerce changed? Ma Yun once said that there may not be pure online in the next few years, nor pure offline. The future must be new retail.

So the new retail from Alibaba, we want to understand what we are going to do on the first day. Box Ma Xiansheng is by no means an online channel. Box Ma Shengsheng is an Internet company. Offline is only an organic part of the Internet, an experience center, a consumer interaction center, and its duties are more experience, interaction, and follow-up. Consumer communication, not a sales center. Therefore, after the birth of Box New Fresh Retail, we believe that it is an Internet company. This is the essential difference from all omni-channel enterprises today. That is to say, the proportion of all omni-channels today is no more than 10%, because its concept is different. Box Ma Shengsheng is a brand new business format, not a physical store plus an app. We are a fully integrated business, and today we share with you the changes that technology has brought us.

First, Box Horse Fresh is the reconstruction of e-commerce and offline retail. What is refactoring? Why did we have to refactor in this era? The first essential change is that our consumers have changed. Today, after 80s and 90s, they are concerned about quality, not value. The original business model with special price is not the price that consumers pay attention to today. What he needs more is good quality goods and good service.

Second, the birth of the mobile Internet, the birth of various intelligent hardware, brought technical conditions for the restructuring of the physical retail industry. We believe that the core element of new retail is restructuring. What is refactoring? After re-disrupting all the retail links, we will re-construct a new system according to the needs of consumers.

It will bring two aspects of value, the first value, we think that for the store, to improve efficiency and reduce costs, just now, Mr. Thierry Gadou of France also talked about the value brought by electronic tags. Today, all the shelves of Box Horse Fresh have been electronically tagged, realizing the inventory of all shelves, the shelves of goods, and the dynamic price change to achieve full digitalization. Therefore, the efficiency of the store brought by the new technology has become obvious.

The second is to bring about changes in the customer experience. We proposed a 30-minute delivery, so the mobile phone clicks, 30 minutes to the consumer, so that consumers no longer have difficulty in life, this is also the most recognized by consumers for box horses, because there is a mobile phone, because of the mobile Internet, you can make orders anywhere, anytime. Because we are a distributed network layout, each of our stores is within three kilometers of you and can respond quickly to your needs.

Therefore, the physical store of Box Horse, from another perspective, is a distributed network system closest to consumers. With this network system, the service and experience for consumers have brought about qualitative changes, so consumers are very proud of the box.

Reconstructed the channel scene, box horse fresh can be sold online, or online. Many people have said that you have gone online, is there no business offline? On the contrary, consumers choose online and offline, he is not a confrontational relationship, he is based on the choice of different scenarios. I am very busy at work. I have a little mobile phone from Monday to Friday. You can send it to your home. It is very happy on Saturday and Sunday. The family of three is shopping for the supermarket. It is also a supplement to life. So it is obvious that when you are busy, you can choose the mobile phone to place an order. When you are casual, you can go to the store to consume. This is the consumer's two life choices based on different scenarios. So many new business phenomena have emerged in our business model. If it rains today, all the physical stores have no business, and we are looking forward to rain every day is the best, why? He sent it to his home with his mobile phone. Like the smog in Beijing, everyone is not going out, everyone has to rely on box horse fresh to deliver to your door.

So after the birth of such a new way of life, consumers have shown great enthusiasm for it, and it really brings value to consumers. Because there are two forms of service, such as door-to-door delivery and store-to-store, it is the consumer’s perception of your brand today and the consumer’s love for you.

Therefore, Box Ma Xiansheng is applying new technology to constantly change retail. Back to the essence of retail, we have done three things and reconstructed the existing retail industry.

The first one is called "buy." Box Ma Xiansheng's all kinds of goods are to solve your eating problems, so today we have completely built a set of goods for the purpose of eating. The composition of this product category is not according to the original classification. It was originally fruit, vegetables, The composition of beef and mutton. We are constituting a category of goods according to the scene. If we are making breakfast, Chinese people will either have Chinese or Chinese, or Chinese, and Chinese will eat noodles, noodles, dumplings, porridge and steamed buns. What is Western style? Milk, bread, sandwiches. So today our product composition, we must first make breakfast, I will build a complete Chinese people's commodity system around the breakfast scene.

If it is to have dinner, how do we build a commodity system? We will see that everyone is busy from Monday to Friday, we will let him cook faster, we will introduce a lot of semi-finished products that make you convenient to cook, including finished stewed vegetables. On weekends, everyone said that to improve some life, we will launch a series of high-end seafood, beef, imported fruits and so on. Therefore, the product category is composed according to the scene. It is completely penetrated and penetrated for a scene. It is a major factor that is popular among consumers today. Buying is the most important thing.

The second one is called "Buy well." The core of buying well is two aspects. The first one is the freshness of your goods. Because we are fresh, we go from the source to the whole store, from Tiantou to the table, and realize the whole process of tracking, the whole process can be traced and cancelled. Remove all intermediate links to ensure the freshness of our entire product. Therefore, for the first time in the United States and the world, we have launched a brand called Rizhao. What is the day fresh? We only sell one day of these goods, including vegetables, pork, chicken, beef, eggs, fresh eggs, born yesterday, today we buy at our supermarket, only sell for one day, this egg can take a chopstick to pick up the egg flower is not Broken, don't believe everyone can give it a try.

Because it only sells for one day, your cost is greatly reduced. First, the cost of packaging will drop. In the traditional retail industry, in order to extend the sales period of its shelves, a lot of packaging is done to extend the sales period, which can be sold for one week or even two weeks. Even a month. But no matter how good your technology is, the goods are not fresh in nature, and it takes so long. So we put all the packaging simplification, selling only one day to make a real return to the table fresh 603,883 people, attending shares, so that the original farmers market this fresh mode of operation back to our supermarkets. Therefore, after the launch of the box horse, it has been recognized by consumers, so the daily supply of box horses is in short supply.

So when you redefine the freshness, we find that many things in the retail industry can be changed in nature. Consumers, whether they are old or young, are willing to go to the box to buy food.

Buying well and cost-effective, the box of fresh goods is the best, because we removed all the intermediate links, but also removed all the harsh taxes and taxes of the supermarket, so our price today is 20% to 30% lower than the supermarket . Because the price is good and fresh, consumers are highly recognized by you. In this process, we use a lot of technology to realize, some use a lot of big data to strengthen the order, apply artificial intelligence to analyze future sales trends, etc. .

The third core is called "buy convenience." The core of the convenience of buying, the first one is called a mobile phone, and it is sent to the home in 30 minutes. This is the threshold for all the retail industry today. No second one can do it because we have invested in an automated logistics line, including Delivered to home in 30 minutes. The second one proposes an unconditional return, no need to collect evidence, you buy back the watermelon is not sweet, no problem, return it to you. Originally the traditional supermarket returns, you have to take a watermelon to the store to return, very inconvenient. Therefore, due to the 30-minute door-to-door delivery, due to the unconditional return, it is welcomed by consumers. If you go to Box Ma fresh to buy things, there will always be no worries. At the beginning, we were very worried about whether some consumers had some deliberate fraud. After a year and a half, I found that after China became rich, everyone’s integrity had a fundamental change.

I talked about our new technology. I just talked about it. The first technology, today we are mobile Internet technology, and mobile Internet technology has solved several fundamental problems that the original e-commerce did not solve. The first one, anytime, anywhere order, such as you open the phone is very convenient, you can place an order at any time, you can be at home, on the subway, on the train, etc., as long as you open the phone to place an order.

After you place your order, because of the mobile Internet, you have a POS address. We know where you place your order? How far is it from our store, beyond the distance, sorry, we can't serve you. Therefore, the box horse is strictly controlled within the range of three kilometers. Why? Because I have to guarantee half an hour to your home. So because of the mobile Internet technology, you have realized the order with the underground, and with the mobile Internet, you have the best location.

With the mobile Internet, you can communicate and interact with our stores in real time. This is not possible. We have a lot of member groups and fan groups. We can reach all of our members in the first time. For example, we just talked about the day and day, it is possible that there is a problem with the order today. Suddenly there are two hundred grams of pork that cannot be sold. What should I do at night? Supermarkets can be discounted, but the store is limited. At this time, we use big data to filter. If you have a pork-intentioned customer, we just need to push a message to him and basically process it in a few minutes.

Because of the mobile Internet, your physical store inventory and your app can interact with your customers in real time, which will bring about a fundamental change in our overall retail efficiency. Because of the mobile Internet, new retail is likely to exist today.

Our retail cloud system, the whole system of the box horse is arranged on the cloud system of Ali. The whole box horse system includes the ERP system, including the POS system of the store, the logistics system of the store, the distribution system and the APP system. We are complete. system. We are proud to say that this system does not exist in the world. Therefore, we are also very proud to say that the original ERP company should be behind in the Chinese market today. Because only this complete system, the online traffic and store inventory, and the POS system completely unified members, unified price, unified inventory, unified marketing methods, unified payment means, this complete The system is the future of our retail industry. We were fortunate to spend a year and a half developing the system with 500 software engineers. We are also exporting all the retail products in China. We are all free. Whoever works with us, we will give this system to him for free.

Third, technology brings value, intelligent hardware. Just now everyone saw that the electronic label has been standardized in the box horse. It can effectively improve the operation efficiency of the store. It can effectively do a lot of advertising, and the interaction between many customers. This has been done in the box horse shop. Standard, fully realized.

Fourth, a large number of interactive devices and trading equipment in the store, including the use of a touch screen, through video recognition, we have accurate push, including our box Mamen shop to do self-service cash registers, etc., we believe that smart hardware in the new retail Inside the industry, it is a huge blue ocean market, which is a huge opportunity because China's labor is getting more and more expensive. Therefore, Box Ma Xiansheng is very willing to work with BOE. We will explore and do some products that will help promote the development of China's retail industry and even go global. So today I am very fortunate. I signed a strategic cooperation agreement with BOE in the morning. We hope that in the shortest possible time, we will promote all product lines in an all-round way.

This has just been talked about, is mobile, fast response, accurate content push. There is one more point in the accurate content push. Today we are looking for a store. How do you find a store? I said it is too easy, because Alibaba has more than 600 million users, the same users in Wuhan, Alipay data also, transferred out to see, which store has high spending power, Alipay scenes? Where do you often go and so on, we have all this data.

So with these big data, we know where to open a store in Wuhan. These are far from being possible in the traditional retail sector. When you have a geographical location and big data, you know a lot about your consumers. This is the big data that Alibaba has accumulated over the years. We can make full use of it in the box.

So the retail cloud, I just talked about, supports comprehensive digital operation management, and upgrades from the IT retail system to the real-time interoperable Internet information technology architecture. We didn’t talk about it, let’s talk about it now. The core of it is membership, marketing, merchandising, trading, supply chain, store operations, and achieve a comprehensive digital. Just talk about the shelf system, what goods are placed on each shelf? How much is sold? When is the replenishment? We have implemented automatic replenishment of the system. What is this core? You realize the reverse of all goods, the digitization of the goods in the store, the digitization of the goods in the backcourt, and the digitization of the front yard. Only after these digital changes can you know the flow of your internal goods. This box horse system has been completely solved. .

The core of marketing digitalization is the operation of online and offline integration. For example, the earliest store, the current online ability can not do, we are now back to the online transaction to the line to trade, because your membership is integrated, you are targeting the same customer base, you can use a variety of The way, let him go online for a while, and then to the line.

The third is the commodity, the online and offline is real-time inventory, the same inventory, so the success rate of online compliance is 99% points. So the same inventory under the line, this is the most critical step for the entire new retail.

In the fourth transaction, Alipay was used for both online and offline transactions.

The fifth supply chain is a traceable supply chain. Today, the whole process of the box horse is traced back to the supply chain. It has an essential difference from today's traditional supermarkets. The original traditional supermarket can only be traced back to the store. Whoever sells the store will not know who will sell it because of cash. But today, all the members bought at Box Horse Store are members. With Alipay, can it be traced back to whom is this apple sold to? If there are quality problems, I can fully recall the first time, and realize the real tracking system from the head to the table. Because you can only achieve the full digitization of members, you can truly achieve vertical traceability from source to table. At present, this is also the realization of box horse fresh, no one in the world to achieve.

Sixth, the store operations are digitized. We found a lot of business cooperation a year ago. We just entered the retail industry and thought that our ability is not good, so we cooperate. But a year later, we found that after working with physical retail stores, we found that they were not jealous of us, not that we were jealous of them. So in the process of mobile work, my handheld terminal is all involved. I have fully digitized the operation management of the store. I know how much work time per person per hour. Our data can’t be seen at most. 50% of the time is working. After analyzing these data, we will re-transform the mixed positions. One person can work in multiple positions, and one person loses one third, and the employee salary increases by 30%.

So when digitalization can clearly show the operation efficiency of the store, you can find that many jobs in the traditional supermarket have not been done, the digitization of the store has not been done, the digitization of the shelves has not been done, and the digitization of the goods has not been done. Discovering these things with new technology can be completely changed.

When you fully digitize these six links, we built the world's first retail system, we call the retail cloud, which is based entirely on the Alibaba Cloud base, plug and play. It turns out that our physical store has to be equipped with servers, etc. The original mode of operation, from Alibaba, we are all free.

Therefore, we hope that the entire system will be fully open to the Chinese retail industry next year.

There is also a change in the experience that our entire hardware system brings to consumers. We just talked about the electronic labeling system and later talked about the systems on the shelves, including time-based POI. There is also the entire logistics operation system, because of the geographical location, so my order can accurately calculate the best delivery route. Because the box horse is to be delivered in 30 minutes, we can only send up to three orders at a time, and no more can be delivered. How do three orders guarantee the route is optimal? After collecting the address of the POI, we use the map of Gaode to calculate the best route, and guide my distribution worker through the mobile phone to how to deliver.

We want to cooperate with BOE in the future. We have made a self-service cash register system. The core of the system is waterproof and error correction. We have developed a visual identification system to identify whether the product is leaking during the scanning process and automatically identify you. s product. So we have two stages. The first stage is to scan your technology first. Right next year, we will judge that the product is automatically discriminated according to the image, so once it is completed, once our entire cash register system is completed, We believe that there is no need for a cashier anymore. Now the cashier of the store is a huge cost. If our store originally did, it would cost more than a dozen people. After this is completed, it is completely unnecessary.

This is Alibaba's own visual video recognition system, which can dynamically distinguish your products. Alibaba is a technology company. We hope to cooperate with companies like BOE to create new smart hardware in the future.

Looking forward to the future, everyone just talked about IoT. I think the first thing is to solve the 5G problem, the fast transmission problem, and the quick calculation problem. I believe that one or two years will come. After the arrival of the 5G era, the Internet of Everything will be heard, and the IoT era will surely come. After the arrival of the IoT era, what will happen to our consumption? It must be based on a scenario to generate demand and then you need to respond quickly. You wear a ring on your hand, the blood pressure is high, is it necessary to eat some antihypertensive drugs, all based on the needs of the scene, it must be a quick response.

So what is the essence of the box horse? We are building an instant network of “three kilometers*30 minutes”, becoming the virtual third space for consumers outside the home and office. So next year will launch a 20-hour service. In the middle of the night, the child is sick and wants to buy medicine to find me. You said that your home light is broken, no problem, look for me. We have already been online, but we have not done it for 20 hours. Currently selling the best two things, one is a band-aid. The second is that women's stockings sell best, why sell the best? Often autumn is coming, the office stockings are broken, and a phone call is sent immediately. This scenario is completely based on the needs generated by the instant scene. Can you meet the service in time? Our layout today is coming to the IoT era, and we think there is great value. Because of the arrival of the IoT era, the problem of information interaction and the transmission of information has been solved.

Finally, the movement of things still depends on the distributed network system, so Boxma today builds a distributed network system for the future. We are going to build two thousand stores and hope to complete this mission within three to five years. Once the IoT era of BOE arrives , no problem, the service to find a box of horses, buy goods, buy hardware to find BOE, thank you!