what is new retail revolution

When we think of online shopping, we usually think of clothes, travel accommodations or maybe even something interesting you saw while browsing through the endless listings. But with the pandemic now, many of us are not going out as much as we used to. Many have even chosen to start shopping online for essentials as well.

The results? Many businesses, especially small businesses going online to adapt to the changing consumer behaviour or preferences.

Tune in as the Founder and CEO of Exabytes, Mr Chan Kee Siak speaks to Freda Liu from BFM89.9 on the challenges businesses face when going online and how to tackle them.

Freda:
Good morning, this is Freda Liu. You are listening to Open For Business. More small businesses are adopting and moving to online businesses due to the pandemic. As eCommerce is a fast-moving scene, old ways of doing business online are also quickly becoming stale. It is no longer a matter of having an online presence. But how do you turn it into a seamless shopping experience for your customers?

Founder and CEO of Exabytes Network or Exabytes, Chan Kee Siak is here with me as we speak and navigate around the new retail revolution and I’ll find out what the new retail means in just a while.

Good morning, Mr Chan.

Mr Chan:
Very good morning, Freda.

What has been happening with Exabytes before and during the pandemic?

Freda:
What’s been happening with Exabytes before the pandemic and during the pandemic? And I say before the pandemic because we have spoken before. But that was like, you know, a long time ago.

So maybe a quick summary of the milestones and then the pandemic.

Mr Chan:
Sure, regardless it is a before or currently, during the pandemic, we only do one same thing, which is helping the businesses to grow online. So of course, helping businesses grow online is a very broad scope.

Okay, but this is basically what we do since day one where we start to offer the business with their domain name and website. Then slowly we have evolved to offer really large leverage of cloud solutions. Then, we also develop into digital marketing. We get ourselves involved in eCommerce.

And today, we also are supporting a lot of enterprises in terms of enterprise eCommerce needs as well as enterprise cloud requirements. Yeah, but all this has one thing in common.

You see how can they grow online by making good use of cloud eCommerce or digital.

What are small businesses coming to you now?

Freda:
Right, so what are small businesses coming to you now?

Mr Chan:
Of course, we see more and more interest and also enquiries. As well as small businesses embark on a journey of eCommerce.

In the past, when we faced more eCommerce wanted to do eCommerce, you probably think of like, you know, a young chap wanted to like sell products online. But today, when we talk about eCommerce, especially the pandemic, you will probably see a lot more of the traditional brick and mortar business wanted to actually also make good use of digital eCommerce.

From selling groceries until like restaurants who want to have not just a website for the restaurant, but also some ordering capabilities.

So this is a trend that is happening very rapidly now.

What is new retail?

Freda:
And you know, when you talk about the new retail, right. This is something that Jack Ma spoke about. So what is this new retail?

Mr Chan:
Right, new retail. You see how the traditional retail, the brick and mortar retail business is from into the so-called new generation, or in software terms, we call it a new version.

But I think what it really means is how the behaviour of the consumer evolve, transform and change over the years. And how the retailers need to actually adapt themselves to make sure they are still able to connect and continue to be relevant to the new generations of retailers.

So I gave some scenarios as an example here, right? I think in a very traditional way of maybe like 10 years ago, 5 years ago, or even today, most of the retail or retailers, they are very disconnected with the digital. There may be a trace in retail and in retail, right? And the mundane digital thing that they have is probably the point of sales in terms of the retail space.

Some of them may have an eCommerce division or have online stores or maybe even start selling in marketplace. But a lot of time, most of them they see that as a marketing element. Because every business has an eCommerce store, they need to have it. When you have a website, they need to have it.

And probably in terms of how the business grows and all that, the one managing the so-called physical retail versus the one managing the eCommerce business or the online business is entirely disconnected.

So there’s a lot of mismatch or experience that is happening.

One example is let’s say, you shop in the physical retail, you earn points as a customer but your account that you logged in you can’t use it online. So the experience is totally disconnected and in turn, the online business unit and also the retail business unit, you are also fighting with each other. Because totally different team managing it.

So these are the current issues that are happening in retail but I think that is normal. That is part of the transformation journey.

So when things start to get evolve, and especially accelerated with pandemic lockdown and all that right, there is stronger needs and desires for the consumers. Consumers wanted to have a more seamless shopping experience.

Other than that, the consumers are also evolving from like, you know, going online, I want to shop for cheap or cool stuff. Now they want to also look for their favourite brands or the brands or retailers that they are familiar with. They want to be able to buy it online, right? So that is one of the requirements and needs that started to grow. Then there is an urgent need for all. The very conventional traditional retailers will start to look into how to bridge their online and offline business, how to merge it together.

So that is where, you know, the new retail starts to happen.

Why is new retail emerging? Is our mindset or behaviour holding us back?

Freda:
So it’s mostly actually when you think about it is not a technology issue. It is a mindset, an organisational issue that needs.

Mr Chan:
Behaviour.

Freda:
Behaviour, right? That needs to change. Right? This whole new retail, of course, is very successful in China you know and it is an emerging year now.

And so why is it still emerging? So is this a reason why it is holding us back? Because of the mindset, because of that behaviour that we still have not adopted?

You know, obviously, China is also the big brother telling you what to do. So but yeah? Right?

Mr Chan:
I think this is a part of the consumer shopping evolution. When you started, you may be started with like, buying discount deals in groups. These are the Groupon era and all that.

Then slowly, people that get involved in like eCommerce buying from like malls, marketplaces and all that. Then they started to look into the online sellers. Right, then they started to look for certain brands that they are familiar with. Then they started to expect all these traditional brands and retailers, in their list or neighbourhoods should have an online presence. Then later on they will expect the online presence should connect with the offline presence.

So I think that is the evolution of consumer behaviour.

Does new retail involve a lot of investment?

Freda:
So you gave an example. You said imagine intelligent mirrors or virtual clothing try-on, virtual businesses stores and pop up stores, or simply the ability to watch 3D advertising of a luxury car driving with a QR code to purchase it immediately.
Now, when you hear this, this is seamless. This is frictionless. But you know, is that something that involves a lot of investment?

Mr Chan:
I will say all these are part of the mix in terms of some of the new retail experience. But it does not entirely represent the new retail. All these are very frictionless. And also, it looks very cool when it is shown.

In terms of costing, during the early days, these may cost a lot of money. Because you need a special team who are very skilful in these techniques or technologies to be able to help you do the rendering design.

But today, because of it, in many developed markets right, it is quite normal. And because of that, the tools are widely available.

A lot of the sellers or marketplace or platforms already made some of these tools as part of their standard offering. This means either you do not pay additional costs, or even you pay a very minimal fee, you can have access to all these features.

For example, QR code is absolutely free. You can generate QR codes easily. I think the challenge or issue or rather say the gap here is how can the retailers especially the traditional retailers, be innovative enough and bridge the gaps. As well as put all the components together to integrate the online versus the offline shopping experience to be as seamless as possible.

I think one of the important points to take note of is that, while we are talking about all these cool new features, right? We have to make sure it is not too technical or hard. So it is not like you have to go download or install another software in order to enjoy that feature. Absolutely not cool at all if you need to install something.

Freda:
And I think it’s a process of when you work with your customers. You take them through the process. This is the end result we would like but let’s start slowly by slowly you know that kind of thing, right working with them.

And I want to talk about your acquisition of 91APP in just a moment. I’m here with Chan Kee Siak here from Exabytes.

Stay tuned to open for business BFM89.9.

How does the 91APP work?

Freda:
Good morning. This is Freda Liu if you have just joined us. I’m here with Chan Kee Siak, from Exabytes and we’re talking about the new retail revolution.

Now EasyStore which is a subsidiary of Exabytes has acquired 91APP, which is an omnichannel commerce solutions provider in Asia and that provides a seamless multi-channel experience.

So tell me how does the APP work?

Mr Chan:
Right, instead of calling it an acquisition, I will probably rephrase it as a very strategic joint venture partnership. And the entity or the party that we joint venture with is actually the 91APP, their Malaysian subsidiary.

So a little background of 91APP, they are actually a company founded in Taipei, Taiwan and specialise in so-called the omnichannel or the new retail eCommerce in Taiwan for close to a decade now. And the founding teams before they founded 91APP, they also got involved in the eCommerce industries for almost the past 20 over years, I think the very early days of eCommerce.

So I think in general, perceive it the simple is that in a more developed market, like Taiwan or even China or even US. Their eCommerce is actually more developed and more matured than other developing markets such as Southeast Asia. So this means because of their more mature markets and their requirements from the consumer and seller side, they have developed themselves to enter into new areas in terms of all these eCommerce related.

So the relationship is started with or we know each other for quite some time. We also noticed and are aware that they are doing these new retail solutions in Taiwan very successfully.

So on our site, as you also know, I have my eCommerce and also cloud because I deal with a lot of SME enterprises, who always wanted to bring their business online and start doing eCommerce. And even we are seeing people asking how to also integrate or link my online and offline business. So we thought, 91APP solutions we have here is a very good solution. It is not just because the concept is good. But it is also the places they sell the 91APP solution itself. As we validated and proven in Taiwan, we were used by tens of thousands of all the different retailers in Taiwan.

In fact, today, the day they are going IPO officially in Taiwan. A very solid company with the enterprise.

So with our business relationship with this company in our entity, we saw a lot of potential synergies.

This new retail solution and experience are exactly what we are lacking in this region.

We have the capabilities to do the product, but we do not have the full experience behind running the whole new retail enterprises business for 5 years, 10 years, right. So I thought through that very strategic joint venture partnership, not only we can bring onboard their technology, their solutions, we can also tap into the experience that they have. So that can actually help all our fellow Malaysians, especially the retailers who are interested to venture into new retail to shortcut or cut short their learning curve.

Instead of trial and error, we can directly take what they have learned in the past 10 years, and directly pick up those relevant and apply them to the scenario here in Malaysia.

Are there any success stories of businesses using the 91APP?

Freda:
Right. So this is very new. So are there any cases, stories, case studies that we can talk about in Malaysia, but if not in Taiwan, how they have used this APP, a business that has used this APP successfully?

Mr Chan:
Sure, I can share some examples from Taiwan that I am familiar with using their solution.

One of which is one of the retail chain convenience stores which is very popular in Taiwan and also in this country. So how they actually been able to bridge their online and offline business, they actually advertise to all the walk-in customers to all the convenience stores to actually download their mobile APP. Of course, you know, their eCommerce stores and all that can also be accessed through the browser on mobile.

They encourage them to download the mobile APP.

And the moment you download the mobile APP and register yourself within two clicks as a member, you actually get welcome points, right? So with the welcome points, that is where they can start shopping at home using the APP. So, you see, this is how it changed the whole business model and also the user behaviour.

In the past, only you will be physically in the convenience stores then only you are able to transact with the convenience store by buying items or snacks and all that right. But if you are outside the convenience store, that means there is no business deal anymore, right.

But imagine right with the APP which the mobile APP used as a medium as a platform to connect the convenience stores with the consumer. So that means the consumers while they are at home, when they see good offers interesting products, they can continue shopping, right? So that means that the business model is now truly 24/7 anywhere.

In the past, it is only 24/7 if you are in the convenience store.

So that experience is even more interesting by allowing the consumers when they do shopping at home, they can choose to actually pick up the products they order from the convenience stores, or they can have the products shipped to their doorsteps. But not only that, through the APP, and the 91APP new retail solutions, they can also introduce special promotions or offers that drive the consumers back to the retail store.

For example, I will send you, Freda, a free coffee voucher.

Freda:
Okay.

Mr Chan:
But you can only claim the coffee voucher if you are in the store.

Freda:
Right.

Mr Chan:
So this is how they actually you know, someone goes offline in the retail, they continue to drive them to buy online. When they are buying enough online, they will drive them back to the retail.

Freda:
I see.

Mr Chan:
So that is how it can maximise the entire spectrum and opportunities of what retailers possibly can do. The only limits are really the imagination.

Freda:
Right, okay. And I guess like, when you actually physically turn up in the store, you never just go there for a cup of coffee, you will always get something else?

Mr Chan:
For sure, right and grab something.

Freda:
To eat with the coffee

Mr Chan:
Maybe a drink or something.

What has the pandemic taught you?

Freda:
Right. You know, as a serial entrepreneur, you know, what has this pandemic taught you?

Mr Chan:
I think there is a lot of interesting things that we learnt in the past, I think almost one and a half year now, unfortunately. But what we can observe here is that businesses that have more digital components or capabilities can actually survive through and a lot of them actually doing quite well, during this pandemic.

Compared to those that rely on the traditional approach business, most of them are totally disconnected, right? They do not have any digital presence. It is actually quite hard for them because once the lockdown is announced people can’t move around.

Even when there is no MCO, I think easily half of the population is actually very careful. They don’t go out, they don’t go to the mall, they don’t go to the shop, basically. So you can imagine the level of business that is affected.

But I also see, on the other side, regardless, they existingly, they already have the digital capabilities or eCommerce capabilities, or they only adopt it during the pandemic. But so long, they have the eCommerce options or the digital options, a lot of them actually the business continues to grow, right.

For example, I always love this classic example, my neighbourhood grocer. In the past, they only are able to serve whoever walked into the market, right. And that is probably limited to that Taman or neighbourhood.

But now he also has his online store and he takes orders from WhatsApp as well. So basically it is covering the customers from throughout Penang island. So this is how making good use of digital or eCommerce can actually break the physical barriers and limitations.

It is whether you want to take that extra effort to figure out how to operate in the digital world eCommerce world. And it is actually not hard at all, it is actually not expensive at all. A lot of them use a lot of free tools and free resources out there to help them.

Is there an ideal mix or ratio of offline and online presence for businesses?

Freda:
You know, when you talk to businesses that have a physical presence, do you tell them like in an ideal situation, it should be 5050? You know, the ratio of your businesses? Is there an ideal mix?

Mr Chan:
That won’t be like so-called best practices or the right mix. I think it varies from business to business. But what I can see is that right, at least you have multiple channels, or at least you have retail plus you have an online channel, right?

That is where you can diverse your reach, right? So in case, if lockdown again, but if you’re online, still operating you can still take orders vice versa. And having it online, I think the true potential I can see even I myself or as a business owner running multiple businesses like this is that the one good benefit is by leveraging on online, my so-called, my business operation is not constrained to currently where I am located. I can be speaking to you from Penang Island but I am doing business with customers around the world.

I think that is the beauty of having an online presence.

Freda:
Okay and you are only locked down physically but not locked down virtually.

Thanks for spending the morning with us. I have been speaking to Chan Kee Siak, the founder and CEO of Exabytes. You have been listening to Open For Business BFM 89.9.

Listen to the interview here:

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