Fortune – The Accelerating Disruption of China's Economy

Media, news and events

In the news

Fortune – The Accelerating Disruption of China’s Economy

The retail revolution in China is well underway. While the $13.7 billion Amazon – Whole Foods deal came as a huge shock in the United States, it didn’t in China, where digital disruption is already upending the retail industry. Egon Zehnder’s work in the region shows there are many relevant lessons to learn – and learn fast. While online sales in China still account for just 15% of all retail, it is not yet time for retailers or real estate players to breathe a sign of relief. “The true threat to retail in China may not be online shopping. It’s the increasingly likelihood that the country’s e-commerce giants will turn their attention to doing bricks-and-mortar – better,” says Egon Zehnder’s China Services Practice leader Paul Liu. Alibaba and Tencent, who along with Baidu represent the big three digital titans in China, have both the means and the motive to redefine traditional in-store shopping. “New Retail”, advocated by Alibaba’s Jack Ma, is the integration of online, offline, logistics and data across a single value chain. If executed properly, this New Retail vision would not just remake shopping inside China, but also allow the company to leapfrog the United States and Europe in terms of retail innovation. In a disrupted industry, it turns out the real battle isn’t between online and brick-and-mortar, but between old retail and New Retail.

Full story: “The Accelerating Disruption of China’s Economy” in Fortune (June 26, 2017).