Intime Retail (Group) Company, while still making money, started to smell the danger.
Noticing the shrinking market size, falling industry employee numbers and growing competition from e-commerce, Intime decided it had to change.
That’s good, but to go about that exactly?
Well, how about a partnership with the biggest rival, Alibaba!
Two years ago, Intime and Alibaba began working closely together. In January this year, Alibaba spent HK$29.6 billion to take Intime private, which was then delisted from the Hong Kong bourse.
Chen Xiaodong, chief executive of Intime, says Alibaba’s big data technology has helped transform the department store operator since the tie-up.
So, what is the first step of change?
Asked this question, Chen offered this response: “A retailer should go back to being what it is supposed to be — a retailer.”
What most department stores are doing now is not retailing, but property leasing, Chen noted.
They only care about getting the rents, and are not paying enough attention to whether the shops serve the needs of the neighborhood.
“It may have worked 20 years ago but not today,” said Chen.
Using big data to get a grip on consumers
Employing Alibaba’s big data skills, and data collected by Alibaba’s numerous units including Tmall, Alipay and Alibaba Cloud, Intime can now accurately analyze consumers’ habits in a 10-kilometer periphery of its department stores.
Such data can map out the family structure, average age, and consumption power of the shoppers within the periphery.
Chen said the analysis can help the company determine the right type and size of shops in a department store, the kind of products and brands a shop should offer, as well as the number of items from each brand.