In this file:
· US retail giants invest in strategic partnerships
… China’s massive market size, economic strength and increased affluence has led to strategic partnerships between these retailers and China’s e-commerce platforms, including Walmart and JD.com, Kroger and Alibaba, and, most recently, Amazon and Pinduoduo…
· CES 2020 Kickoff Highlights the Decoupling of U.S. and China’s Tech
… The U.S.-China trade dispute is spilling into CES in spite of plans for the two countries to sign a "Phase One" trade agreement on Jan. 15 in Washington. A Chinese consulate and commerce ministry-backed station at the expo will offer free legal help to Chinese attendees, who have also been encouraged to carry documents certifying their intellectual property rights. IP theft has been a sticking point in trade negotiations…
US retail giants invest in strategic partnerships
Franklin Chu, Smartbrief (DC)
January 7, 2020
Chu is managing director of Azoya USA, is an expert and speaker on China cross-border e-commerce. Franklin also serves as President of Sage Capital Group Inc. a private equity and investment management firm and is a graduate of Yale University and Harvard Business School.
In recent years, leading American retailers have realized that their future growth depends on foreign markets – particularly China.
China’s massive market size, economic strength and increased affluence has led to strategic partnerships between these retailers and China’s e-commerce platforms, including Walmart and JD.com, Kroger and Alibaba, and, most recently, Amazon and Pinduoduo.
We’ll look at why these retail leaders see collaboration as the way forward – and how other US retailers and brands can increase their reach and decrease their risk when expanding to new markets.
Walmart and JD.com team up to tackle smart retail
Walmart, the world’s largest retailer, has been in China for more than 20 years, having opened its first store in Shenzhen in 1996. It has since grown its presence to a whopping 433 stores and more than 100,000 employees in China.
But in recent years, competition has intensified as more business moved online and competitors such as Yonghui Superstores’s Super Species chain and Alibaba’s Freshippo chain have adopted new omnichannel store formats.
Walmart’s own venture into China e-commerce, Yihaodian, failed and was sold to China’s largest online retailer, JD.com, for an undisclosed price in 2016. Walmart then purchased a 5% stake in JD.com for US$1.5 billion; that stake has since risen to 12%.
The partnership between the two companies has only deepened; they’ve since co-invested US$500 million in Dada-JD Daojia, an on-demand delivery business that ships groceries and daily necessities to local consumers, leveraging Walmart stores as fulfillment centers. More than 100 of Walmart’s stores double as warehouses for JD.com.
This model helps Walmart downsize its stores and move more of its inventory online, similar to its newer competitors in the grocery business.
Consumers can order items delivered through the Walmart WeChat mini-program app or JD.com’s e-commerce platform. WeChat is China’s most popular social media platform, which integrates e-commerce. The mini-app is designed for high-turnover products, while the JD.com store is more for lower-turnover, high-margin imported products such as Pampers diapers and Wyeth milk powder.
And now Walmart is expanding its presence yet again in China, announcing in November that it will double its store count in China by adding 500 new stores over the next 5-7 years.
Many of these stores will adopt the omnichannel retail concept, supplementing smaller offline stores with a larger, interconnected online selection of products.
Amazon partners with Pinduoduo to make a comeback ...
Kroger uses Alibaba to launch its private label products ...
Key takeaways ...
more, including links
CES 2020 Kickoff Highlights the Decoupling of U.S. and China’s Tech
By Naomi Xu Elegant, Fortune
January 7, 2020
The world's biggest consumer technology trade show kicks off Tuesday in Las Vegas amid an escalating tech cold war between the U.S. and China.
While new generation tech that has been the focus of China's innovation efforts—like artificial intelligence and 5G—will be at the forefront of CES 2020, major Chinese tech players like Alibaba, Tencent, and JD.com are absent from the first major global tech event of the decade.
The U.S.-China trade dispute is spilling into CES in spite of plans for the two countries to sign a "Phase One" trade agreement on Jan. 15 in Washington. A Chinese consulate and commerce ministry-backed station at the expo will offer free legal help to Chinese attendees, who have also been encouraged to carry documents certifying their intellectual property rights. IP theft has been a sticking point in trade negotiations.
Escalatory U.S. policy against Chinese tech companies in 2019 has led to a new push in China to establish technological independence from the U.S.—a move that that will have major international repercussions, according to a Jan. 6 Eurasia Group report on top risks for 2020.
"The decision by China and the United States to decouple in the technology sphere is the single most impactful development for globalization since the collapse of the Soviet Union," the report said.
A little over 1,000 of the 4,500 companies exhibiting at CES 2020 hail from China. Two years ago, one third of participating companies were from China, and last year it was more than one in four.
The uncertainty brought on by political tensions between the U.S. and China as well as difficulties obtaining U.S. visas are contributing to the drop-off in attendance from Chinese companies.
"Our company decided not to attend this year because we knew it would take forever to get our visa, if they don't get rejected after all," one Chinese A.I. chip startup founder told the Nikkei Asian Review.
Of China's top domestic smartphone makers, only OnePlus and Huawei appear on the CES exhibitor directory. Top name brands like Xiaomi, Oppo, and Vivo are absent.
Artificial intelligence will be at the forefront of CES 2020, but China's leading A.I. startups will be absent, including Megvii, SenseTime, and Yitu, which all landed on a U.S. government trade restricting "entity list" in October 2019 for their alleged involvement in a Chinese government campaign against ethnic minorities in Xinjiang province...
Not all Chinese firms staying away ...
more, including links