The BATX (Baidu, Alibaba, Tencent and Xiaomi) are the Chinese companies mirroring the West’s GAFA (Google, Amazon, Facebook, Apple).
These giants might have grown in the shadow of their Western equivalents – due to the Great Firewall. But today they are behind almost every digital innovation in China that is transforming consumer behaviours. You might hear more and more about them as they expand more aggressively internationally.
Watch our video to get a quick overview of their strategic moves this year.
Trend 1: WeChat will stay the only app you need in China.
Almost 1 billion people use WeChat to do pretty much everything from payments to hailing a taxi. That is 93% of population in China’s Tier 1 cities.
To strengthen its stickiness with consumers further, WeChat launched embedded instant apps in January. With these “Mini-Programs”, you don’t need to download any other app. They offer the full functionalities of traditional apps but are less data intensive – addressing painpoints such as the lack of phone storage space, and are found “on the go” and accessible via the cloud.
Trend 2: BATX are investing heavily in Asia Pacific.
International expansion will power future growth with India as a key battleground.
Alibaba and WeChat are investing in the country via local apps such as Paytm, a mobile wallet, and Hike Messenger, a messaging app. In Southeast Asia, Tencent has invested in Indonesian ride-sharing app Go-Jek, and has been granted a license by Malaysia to roll out WeChat Pay.
Trend 3: Alibaba’s New Retail is creating seamless offline and online experiences in China
Alibaba has opened over 20 Hema Xiansheng stores in China. These grocery stores integrate technologies like artificial intelligence, facial payments and more. For more info on the customer journey at Hema Xiansheng, read our article on New Retail experiments in China.
But Alibaba does not intend to compete with brick-and-mortar stores. Instead, it is partnering with international players to introduce more tech into retail.
For example, Starbucks’ new Shanghai outlet is powered by Alibaba, which allows customers to use their mobile devices around the roastery for an interactive coffee experience powered by AR. Other developments from Alibaba include a strategic alliance with the French retailer Auchan to explore new retail opportunities in China’s food retail sector.
Alibaba’s TMall is also offering a “high-tech” makeover for mom-and-pop stores to transform them into smart service centers equipped with Alibaba’s e-commerce infrastructure and capabilities in financial technology, logistics and travel services.
Trend 4: Alibaba is accelerating biometrics payment
Alibaba rolled out a “smile to pay” in KFC and in its Hema Xiansheng stores across China.
In KPro, the new KFC concept, users simply place their orders at a self-service kiosk, and pay by letting a 3-D camera scan their face to verify their identity. For additional security, users are also required to key in their mobile numbers.
Trend 5: Automation is impacting retail & logistics
JD.com opened the first fully automated warehouse. Robots and other machinery handle 9,000 online shopping orders per hour, replacing 180 human sorters for greater efficiency. Other areas of exploration include autonomous trucks for deliveries.
As for Alibaba, it has started using drones for rural deliveries this year. In time for its massive Singles Day Sale on 11 November, it has successfully delivered packages over water for the first time, launching drone delivery for consumers.
Drone delivery is expected to cut the transportation time by half and save on logistic costs.This has resulted in the popularity of drones for deliveries in rural China.
However, Alibaba’s rival JD.com is again ahead, debuting its first drone delivery at end of 2016. In July 2017, JD.com’s drones had delivered over 8,000 orders and flown more than 10,000 kilometers.
For offline retail, China has seen many startups in the space of unmanned stores. Bingobox is one of the biggest in the space with over 200 stores across China. Users must have WeChat to open doors and pay via WeChat’s mobile wallet. Not to be left out is Alibaba which is also exploring deploying such stores.
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