Entering the already-competitive market of online-to-offline (O2O) space in China, new wine startup BottlesXO, aims to provide consumers with quick delivery of mid-priced wines in major Chinese cities, with plans for future expansion to other cities in Asia.
The app allows consumers to shop for wines and also suggests food pairings to go along with each bottle. In addition, the app features the history of the type of wine, together with photos and descriptions of the vineyard.
So far, the company operates in Suzhou and Shanghai and has raised a USD1.7 million Series A round. They are preparing to raise their next round of funding to help them expand to other cities in Asia.
According to CBRE’s latest report on the retail real estate sector, Tokyo is the world’s hottest city for new retailer expansion, attracting 63 new retail brands, followed by Singapore with 58.
Domestic demand in Tokyo is expected to grow via the government’s initiative to attract more tourists to the country. In Singapore, food and beverage operators were among the most active in snapping up new real estate leases.
On a related note, retailers still substantial growth opportunities in the Asia Pacific region as 41% of American retailers continue to focus on the Asia region, while 79% of Asian retailers continue to target their own regions for further business expansion.
In a latest report published by McKinsey & Company, global grocery chains or hypermarkets are seen struggling to grow profitably in emerging markets.
The primary reason for this lies in the context of the local environment these hypermarkets operate in; where good road networks, high car ownership rates and larger living space in suburban and rural areas exist in Western Europe and the US, this is not necessarily the case in emerging markets. In the latter, consumers are generally less affluent, have lower car ownership rates, and live in major metropolitan cities where space is limited. As a result, the premise that allow hypermarkets to compete effectively in the western world does not translate to success in emerging markets.
In order to grow profitably in emerging markets, McKinsey lists seven elements for success:
Prioritize proximity to consumers
Keep prices low and make sure the consumers know
Keep close watch over productivity
Make the business case to manufacturers
Educate policy makers
Consider partnering with traditional trade (e.g. mom and pop stores)
Adopt a city-based strategy where the majority of consumers are located
China’s rapidly diversifying Internet giants are taking on Western food chains at their own game—door-to-door delivery—and finding a huge appetite among urban consumers.
Startup companies Ele.me and Meituan Waimai, which operate via mobile applications and are backed respectively by Tencent and Alibaba, are getting economy of scale by teaming up with tens of thousands of food outlets across China.
The services are attracting investment and following similar moves by Internet companies to dominate the market for everything from cinema tickets to taxi rides. Food sales running through the startups reached 97.5 billion yuan ($15.7 billion) last year, up 54% from 2013, according to research firm iResearch.
McKinsey’s iConsumer China 2015 survey tapped into the behaviors and desires of China’s 630 million Internet users, across different city tiers and throughout rural areas. The research shows robust growth in social commerce, a trend toward transforming physical retailers into mere ‘showrooms’, and mounting consumer enthusiasm for more online-to-offline (O2O) services.
Here are a few interesting statistics:
30 percent of consumer perform online mobile research while shopping in stores, of which, 16 percent bought products from that store while 45 percent bought the same products from other online stores
72 percent of respondents expressed interest in purchasing online and being able to return offline
Consumers were eager to see more O2O offerings in entertainment, healthcare and housing/car services
The most frequently purchased category online was packaged food, with an average of 34 purchases made per year
Black Garlic is a meal-kit delivery service. It sends pre-packaged groceries in a box. All ingredients are portioned and labeled, and there’s a step-by-step guide for each dish. The idea is to mix convenience with the joy of cooking.
The target audience for this startup’s product is arguably narrow. It’s a product for busy urban folks who don’t want to miss out on the experience of a healthy, home-cooked meal.
The box contains three meals for two and costs IDR 325,000 (US$24). That makes roughly US$4 per individual meal. Delivery is free. The price is comparable to what one would pay for one meal at a mid-range restaurant in Indonesia.
According to CEO Michael Saputra, urbanization and more demand for organically-grown food indicate the emergence of LOHAS in Indonesian cities.
Leading global fast food chains McDonald’s and KFC are both in the headlines as we head into the heart of summer, each trying new high-tech approaches to reignite their faltering China stories. KFC’s deal will see it pair up with Alibaba to offer its affiliated Alipay electronic payments service at hundreds of its China stores. The McDonald’s news is similarly high-tech, and will see the chain extend its new state-of-the-art hamburger customization program to the China market.
According to the reports, the alliance has seen KFC recently start to accept Alipay for electronic payments at 700 of its stores in Shanghai and nearby Zhejiang province. It plans to extend the program to the rest of its 4,500 China stores nationwide, as part of a campaign by both partners to build up their online-to-offline (O2O) businesses that brings together traditional retailers and Internet-based service providers.
Navis Capital Partners Ltd. has agreed to buy control of Imperial Treasure Restaurant Group Pte, the Singapore company known for its “Super Peking Duck” eateries, a person with knowledge of the matter said.
The Malaysian buyout firm will pay S$60 million ($45 million) to S$80 million for a majority stake in Imperial Treasure.