{"id":2624,"date":"2015-12-17T23:46:07","date_gmt":"2015-12-17T23:46:07","guid":{"rendered":"http:\/\/www.www.innovationiseverywhere.com\/?p=2624"},"modified":"2015-12-17T23:46:07","modified_gmt":"2015-12-17T23:46:07","slug":"leading-the-way-in-online-to-offline-leyous-success-story","status":"publish","type":"post","link":"https:\/\/innovationiseverywhere.com\/fr\/leading-the-way-in-online-to-offline-leyous-success-story\/","title":{"rendered":"Leading the way in Online to Offline: Leyou\u2019s Success Story"},"content":{"rendered":"

Leyou<\/a><\/strong> is one of\u00a0China’s leading speciality retailers and the largest for baby products.\u00a0<\/strong><\/p>\n

We interviewed\u00a0Larry Kung<\/strong>, Chief Operating Officer at Leyou. He shares insights about how Leyou\u00a0uses\u00a0big data analysis, omnichannel marketing and community interaction to enhance the mothers experience.<\/strong><\/p>\n

\"Leyou<\/h2>\n

Leyou : 30 seconds summary<\/h2>\n
    \n
  • 150 physical stores, a catalogue and a web store serving all of China<\/li>\n
  • 300 suppliers from 35 different countries for product diversity<\/li>\n
  • Self-developed app to provide product information as well as build a community for mothers<\/strong> : community interaction such as user reviews which are also accessible in-store via Leyou\u2019s app whilst shopping has boosted brand perception and encouraged repeat returns.<\/li>\n
  • Omnichannel marketing<\/strong>\u00a0across its stores, mobile app and online presence to create\u00a0a\u00a0strong consistent emotional link<\/strong>\u00a0with mothers.<\/li>\n
  • Use of big data to\u00a0 better understand and market products<\/strong> to mothers based off various factors like price sensitivities.<\/li>\n<\/ul>\n

    \"Leyou<\/h2>\n

    Key Information<\/h2>\n

    Year Founded<\/strong>: 1999<\/p>\n

    Employees<\/strong>: 1001-5000 staff<\/p>\n

    Funding<\/strong>: Unspecified but it received a second round of funding in July 2007, a cash injection of $11 million from AsiaVest Partners. Later, it received a third round of investment totalling $37 million from AsiaVest Partners and Deutsche Bank, making it the largest investment recipient in China’s baby products.<\/p>\n

    Users<\/strong>: Pregnant women and mothers of babies and toddlers in China<\/p>\n

    Market(s)<\/strong>: China<\/p>\n

    Achievements: <\/strong>Revenue surpassed the 100 million yuan mark in 2005.<\/p>\n

    Analysis: <\/strong>Despite the slowdown in China\u2019s baby industry, the market reached RMB 34 billion (US$5.4 billion) in the top 27 cities in China in the 12 months up to August 8th, 2014. Consumers have grown more selective about the products that they buy which has allowed specialty retailers like Leyou to flourish.<\/p>\n

    \"Leyou<\/p>\n

    The Interview<\/h1>\n

    \"LeyouInnovation is Everywhere (\u201cIIEV\u201d): You said in your talk that with the one child policy, the emotion and care of mothers has been delivered through \u00ab\u00a0physical\u00a0\u00bb goods. Can you explain a bit more? How does it impact mothers?<\/strong><\/p>\n

    Larry Kung (\u201cLK\u201d): As a result of the one-child policy as practiced in the last two decades in China, nearly all families have six adults, four grandparents and two parents,\u00a0doting on one single child.\u00a0As parental disposable income rises and a new generation of consumers come into existence, much of their love for this single child is expressed through better goods and food as provided for the child.<\/p>\n

    IIEV: Other speakers also told us about a shift in the mind-set of the \u00ab\u00a0post-90s Chinese women\u00a0\u00bb (the speakers from L’Oreal in particular). From a retailer\u2019s perspective, do you see the same change in behaviour with regards to their parenting styles?<\/strong><\/p>\n

    LK: Women born in 1990 are turning 25 and entering this child-bearing age.\u00a0 This is a generation that grew up with the Internet, including buying teenage and young women’s products online.\u00a0 They are also avid users of social media and much more expressive about their likes and dislikes than the pre-1990 generation.\u00a0 However, given their bad\u00a0experience with counterfeits in China with online e-commerce during younger years, we also notice that out of safety concerns, post-90s mothers are more inclined than the post-80s mothers to purchase baby products from specialty retailers rather than online.\u00a0\u00a0 This observation is also backed up by Baidu’s recent research.<\/p>\n

    IIEV: You said that there is a balance between quality and price, what insights can you share on this? Noting the health scandals which have occurred, I guess there is a fierce war between brands, so how do local ones compete? Do foreign brands have a premium? And are they able to use it in terms of marketing?<\/strong><\/p>\n

    LK: Because of safety concerns of low-quality goods in China, increasingly mothers are willing to pay a premium for products that are perceived as \u00ab\u00a0safe\u00a0\u00bb; especially for infant formula, baby food, diapers and other categories of goods that are perceived as having an impact on the baby’s health.\u00a0 For foreign brands in particular, they are often perceived by Chinese consumers as \u00ab\u00a0safer\u00a0\u00bb and\/or higher quality, and therefore can command a price premium not enjoyed by local brands.\u00a0\u00a0 Foreign brand marketers can leverage this perception and willingness to pay a premium in the marketing of their brands, especially as it relates to the country of origin and its environmental quality, manufacturing capabilities and quality assurance procedures.<\/p>\n

    IIEV: How do mothers use mobile phones in China? We imagine, from a Western point of view, sprawling and congested cities. Is it the case? Is there a difference between Tier-1 and other cities in terms of behaviour?<\/strong><\/p>\n

    LK: Mothers in China are glued to their mobile phone applications just like any Western young women these days.\u00a0 Whether in (the) subway or walking, shopping or just relaxing, most people are checking their instant messages, product reviews, interacting through social media, watching a video online, or talking to their friends through wireless Internet.<\/p>\n

    IIEV: What is your mobile strategy? I seem to understand you have an app which has a lot of different features (location of stores, scan of product for traceability, content). How do you also connect to the main Chinese social media such as Weibo or WeChat?<\/strong>
    \nLK: Mobile is the most strategic component of our Internet strategy, not only because mothers are glued to their phones at all times, but also because it gives a physical retailer like us to recapture our customer’s loyalty away from monopolistic and expensive platforms like Alibaba’s T-mall via our own apps, which we can encourage customers to download via our in-store free Wi-Fi services rather than, as in the fixed PC world,\u00a0paying Alibaba expensive advertising fees in order to get attention on a PC screen. Our apps already help customers track and redeem their loyalty points, find out the closest Leyou store location, purchase and pay for all Leyou products, scan product UPC for detailed information, play with characters on our apparel and other products with the AR (augmented reality) technology, refer a product to a friend or Weibo and WeChat\u00a0circles, and book Leyou’s marketing activities online.<\/p>\n

    IIEV: You also shared a lot about \u00ab\u00a0emotion\u00a0\u00bb, how do you create an emotional link with mothers through the different channels? Is there one channel; such as mobile, a better fit for this?\u00a0<\/strong><\/p>\n

    LK: We find that mothers’ emotion is most attached to us through a continuous experience we provide to them via all channels: stores, mobile and PC.\u00a0 Stores provide a real physical experience to get to know a brand and product and build an emotion of trust and safety for them.\u00a0 PC is often used in the office where young mothers often shop during breaks, lunches or before end of day.\u00a0 On the other hand, mobile apps bridge the gap and provide anywhere access to Leyou.\u00a0 Consistency throughout each and across all channels reinforces the emotional aspect of our brand building.<\/p>\n

    IIEV: You talked about Big Data as well, to refine targeting of products and content; can you share a bit more on this as well?<\/strong>
    \nLK: Because 97% of our transactions are tagged with members’ ID information, we can look at the baskets of each consumer and find out a lot of insight about their behaviour, habits, likes and dislikes, and at an aggregate level understand the Chinese mothers’ general preferences and trends.\u00a0 Simple insights are the linking of the products to the baby’s age, and cross selling thereof.\u00a0 For example, a basket that shows stage 1 Danone infant milk formula is likely to lead us to promote baby layettes and baby toys to the mother, whereas we should promote toddler toys and apparel to a mother that buys stage 3 infant milk formulas.\u00a0\u00a0 We can also find out a lot about each consumer’s price sensitivity based on who buys during promotion and who buys when there is no promotion. Much other insight is also available through other big data analysis.<\/p>\n

    IIEV: How do you build an omnichannel strategy in China today? What are the main touchpoints of mothers (e.g. mobile in the morning, street in the afternoon, TV at night)?<\/strong><\/p>\n

    LK: We deploy the same ERP and CRM systems throughout all channels, with one integrated member ID, SKU systems, etc.\u00a0 We also provide all stores with Wi-Fi access.\u00a0 Once the infrastructure is built, then we see consumers interact with our stores during weekends, off hours during the work days, and PC during the office hours, and mobile throughout the day.\u00a0 The experience and interaction with Leyou is a continuum with consistency.<\/p>\n

    IIEV: Thank you for your time Larry!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

    Leyou is one of\u00a0China’s leading speciality retailers and the largest for baby products.\u00a0 We interviewed\u00a0Larry Kung, Chief Operating Officer at Leyou. He shares insights about how Leyou\u00a0uses\u00a0big data analysis, omnichannel marketing and community interaction to enhance the mothers experience. Leyou : 30 seconds summary 150 physical stores, a catalogue and a web store serving all […]<\/p>\n","protected":false},"author":6,"featured_media":2630,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[75,249,49,171],"tags":[],"class_list":["post-2624","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporates","category-fmcg","category-innovators-category","category-new-retail"],"_links":{"self":[{"href":"https:\/\/innovationiseverywhere.com\/fr\/wp-json\/wp\/v2\/posts\/2624","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/innovationiseverywhere.com\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/innovationiseverywhere.com\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/innovationiseverywhere.com\/fr\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/innovationiseverywhere.com\/fr\/wp-json\/wp\/v2\/comments?post=2624"}],"version-history":[{"count":0,"href":"https:\/\/innovationiseverywhere.com\/fr\/wp-json\/wp\/v2\/posts\/2624\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/innovationiseverywhere.com\/fr\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/innovationiseverywhere.com\/fr\/wp-json\/wp\/v2\/media?parent=2624"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/innovationiseverywhere.com\/fr\/wp-json\/wp\/v2\/categories?post=2624"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/innovationiseverywhere.com\/fr\/wp-json\/wp\/v2\/tags?post=2624"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}