HKTVMall: Leading Technology Evolution for eCommerce Industry
- 1. Leading Technology Evolution for eCommerce Industry Jelly Zhou CEO (Hong Kong) 16 Aug 2022
- 2. 02 CONTENTS DISCLAIMER This presentation and subsequent discussions may contain forward-looking statements and information that involve risks, uncertainties and assumptions. Forward-looking statements are all statements that concern plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical fact, including, but not limited to, those that are identified by the use of words such as "anticipates,'' "believes,'' "estimates,'' "expects,'' "intends,'' "plans,'' "predicts,'' "projects'‘, “target” and similar expressions. The information included is solely for the use in this presentation and certain information has not been independently verified. No representations or warranties, expressed or implied, are made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions presented or contained in this presentation. The performance and the results of operations of the Group contained within this presentation are historical in nature, and past performance is no guarantee of the future results of the Group. Any forward-looking statements and opinions contained within this presentation are based on current plans, estimates and projections, and therefore involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements and opinions. Certain information in this presentation is extracted from Google Analytics and rounded to the nearest thousand. The computation method and basis of which have not been verified. The data could be overlapping (a) between different type of devices among TV Programme Platform and among Online Shopping Platform if the same user using more than one devices for browsing our Online Shopping Platform at the same time; (b) or the same user using HKTVmall app to browse the HKTVmall web-page; (c) if the same user using the same device to browse the online shopping mall through different channels/medias on the same device. The information for the same period can be changed at different point of time when capturing the data as Google Analytics performs the analysis on sampling basis. According to Google Analytics, the definition of “User” is “Users that have had at least one session within the selected date range, which includes both new and returning users.” The above data are unaudited and are not indicative of the Company’s business performance, financial condition or growth prospect. Readers should not place reliance on these data. For figures generated from internal systems and relevant platforms, which were rounded up to nearest integral percentage or thousand, are unaudited and for reference only. We are not required to correct or update any such statement or information to either reflect events or circumstances that occur after the date the statement or information is made or to account for unanticipated events or otherwise. 2
- 3. 01 02 03 Our Digital Ecosystem CONTENTS CONTENTS Technology Applications at HKTVmall Global Strategy with Brand New Invention
- 4. HKTV’s Mission In Hong Kong To maintain Hong Kong as the “Shoppers’ Paradise” To bring technology into HK retail Beyond Hong Kong To be an “Technology Enabler” to commercialise our inhouse systems, providing an end-to-end technical solution to other market players
- 5. Full Service Marketplace HKTVmall carrying over 1,000,000 product items ~570,000 Sq. Ft. Automated Fulfilment Centers Largest HK Residential Distribution Network ~350 Trucks in operation ~89 O2O Shops & 4 Supermarkets Business Process Optimization By Leveraging Technology
- 6. 20,000+ Brands Available in HKTVmall The Largest Online Shopping Mall in Hong Kong - Offering over 1,000,000 product choices in 14 categories from more than 20,000 brands & partnering with over 5,500 merchants and suppliers
- 7. A “combined model” to compete against “grocery-only model” A shopping mall model to compete against an e-shop Value Creation - Freedom of Choice
- 8. -20.00% -15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% Value of Retail Sales (Supermarket Type) YOY % Value of Retail Sales (Department Store Type) YOY % HKTVmall GMV YOY % Outperformed Overall Retail Market Source : Report on Monthly Survey of Retail Sales – issued by Census and Statistics Department Hong Kong Special Administrative Region Remarkable Growth Remains throughout Economic Downturn D D D D S S S S D S Jan 2022 Q1 Q2 Q3 Q4 S D
- 9. Sustainable Growth Agile by Unavoidable Structural Change in Consumer Behavior Source: GMV on Order Intake and Average Daily Order – Internal platform and system Gross Merchandise Value (“GMV”) on order intake represents the total gross sales dollar value for merchandise sold through a particular marketplace over a certain timeframe, before deduction of any discounts offered by the marketplace, rebate used, cancellation and returns of merchandise sold. Average Daily Order Average Daily GMV on Order Intake (HK$mn)
- 10. Growing Purchase Population in Hong Kong 22.6% HK population aged between 20-74 made purchases at HKTVmall in 2021 14 times in 6 years’ time Source: Internal System 1. Source: Population by Sex and Age Group as published by the Census and Statistics Department, The Government of Hong Kong Special Administrative Region (https://www.censtatd.gov.hk/en/web_table.html?id=1A)
- 11. Full Service Marketplace HKTVmall carrying over 1,000,000 product items ~570,000 Sq. Ft. Automated Fulfilment Centers Largest HK Residential Distribution Network ~350 Trucks in operation ~89 O2O Shops & 4 Supermarkets Business Process Optimization By Leveraging Technology
- 12. • No appliable system available in the market • 3rd party development totally failed (wasted $millions & 9 months) • They didn’t understand the need • Developed in India and Mainland Our “Evolving” App & System Design
- 13. • A pass-through model • Same as “Finger Shopping” – how can we do better • Over-confident on “HKTV” brand • “Pass-through” model failed, started buy-and-sell model few months later Merchants Customers Platform Our “Evolving” Business Model
- 14. • Lack of experience • Difficult to forecast the sales & resources allocation • Keep relocating and expanding the warehouses (from 15,000 to 500,000 sq ft in past 6 years) Our “Evolving” Warehouses
- 15. 1st Phase – Fully manual Our “Evolving” Order Picking Operation
- 16. 2nd Phase – Batch Packing Our “Evolving” Order Picking Operation
- 17. 3rd Phase – Fully Automated Our “Evolving” Order Pick Operation
- 18. 1 Customer places order on online shopping mall. 3 Items in an order are consolidated and sorted according to delivery route through automated robotics. 4 Order is routed to customer’s home / office or self pick-up points, including self-operated O2O shops, retail partner shops, gasoline stations and e-lockers. Merchants Self-owned Warehouse (AGV, Carousel System, Pick by Light System) Upon receiving customer’s order, merchants deliver the items to HKTVmall depot centre. Goods are picked & packed from HKTVmall self-owned inventory. Parcels are transported by efficiently managed trucks with optimized routes, cabin temperature and humidity monitoring. 5 E-Lockers Gasoline Station Customer’s Home & Office Self-operated O2O Shop Depot Centre (Sorting System) Retail Partner Shop 2b 2a HKTVmall is the Entire End-to-End Journey for Customers - eCommerce is more than an User Interface
- 19. ~570,000 sq. ft. Automated Fulfilment Centers Kwai Chung Frozen/Chilled Food Factory NEW Tsing Yi Frozen Food Warehouse Tseung Kwan O HQ eFulfilment Center - Strategic locations and functions for full range of products and complementary support Tsing Yi eFulfilment Center Tuen Mun Distribution Centre
- 20. Traditional Retailing Man to Goods New Retailing Goods to Man Scalable Fulfilment Centres & Automation - Scalability, Cost Efficiency & Accuracy
- 21. Key Metrics Operation 364 x 16 Manpower 120 workers x 2 shifts Daily Order 35,000 Footprint 140,000 sq. ft. Daily Pick Item ~400,000 Basket Size ~$500 Scalable Fulfilment Centres & Automation Carousel System
- 22. Key Metrics Operation 364 x 16 Manpower 120 workers x 2 shifts Daily Order 35,000 Footprint 140,000 sq. ft. Daily Pick Item ~400,000 Basket Size ~$500 Scalable Fulfilment Centres & Automation Automated Guided Vehicle System (AGV)
- 23. Key Metrics Operation 364 x 16 Manpower 120 workers x 2 shifts Daily Order 35,000 Footprint 140,000 sq. ft. Daily Pick Item ~400,000 Basket Size ~$500 Scalable Fulfilment Centres & Automation Sorting System
- 24. Full Service Marketplace HKTVmall carrying over 1,000,000 product items ~570,000 Sq. Ft. Automated Fulfilment Centers Largest HK Residential Distribution Network ~350 Trucks in operation ~89 O2O Shops & 4 Supermarkets Business Process Optimization By Leveraging Technology
- 25. Chilled Compartment (0-4°C) Frozen Compartment (-18°C ) Ambient Compartment 3-Temperature Compartment Truck - Deliver different items at once, providing convenience & helping customers to save waiting time for delivery
- 26. Temperature & Packing Check when receiving from merchants Trucks Equipped with Proper Temperature Compartments Storage in Isolation Bag with Ice Pack Embedded Beacon Connecting to Delivery Device Enhanced Service Levels with Technology - Stringent Control on Frozen & Chilled Food Delivery
- 27. Enhanced Service Levels with Technology - Real-time Truck Monitoring System • Real time temperature monitoring • Door Open time • Fast track of delivery progress
- 28. Phase I (by end of 1H 2022) Enhanced Service Levels - Pledge to Offer the Best Last Mile Delivery Order by 1pm Will be Delivered by Next Day Phase II (1H 2023) Order by Midnight Will be Delivered by Next Day • Earlier order cut-off time • Additional 40 delivery trucks in operation • Expanding fulfilment facilities by additional 150,000 – 200,000 sq. ft. • Stock existing 85% SKU in our warehouse
- 29. O2O Strategy Offline Physical Stores (average ~350 Sq. Ft.) Visibility, Trust & Customer Acquisition Customer Service Retail Sales & HKTVexpress In-store Pick-up Walking Distance Distribution Hub Online Marketplace One-stop Online Shopping Platform Order Placing Showrooming Product Diversity Core Business & Profit Center Complementary to Online
- 30. Dec 2017 Dec 2018 Dec 2019 : 1 : 15 : 39 : 60 Expanding Offline Pick-Up Format Covering 220+ Points Dec 2016 HKTVmall O2O Shops including 4 HKTV Supermarkets Win-Win Outsourced Pick-up Partners Now: Outsourced Pick-up points: 19 Now :68 Now: E-lockers: 110 Dec 2020 :93 Dec 2020 Dec 2021 NOW : 68 : 93 : 93 * As of 4 Aug 2022
- 31. 01 02 03 Our Digital Ecosystem CONTENTS CONTENTS Technology Applications at HKTVmall Global Future Strategy with Brand New Invention
- 32. START 2014 The journey commenced in 2014 when HKTV started developing the e-commerce platform – HKTVmall. 2018 2019 2020 Feb Ecommerce Core Platform Feb EXCHANGE Communication Channel with Merchants 2015 2016 Apr OIX Order Information Exchange Nov DDRS Dynamic Delivery Route System Nov SSO Single Sign-On (Internal) 2017 Oct 1st WMS Warehouse Management System integrated with automated robotics Feb AGV WMS Automated Guided Vehicle Warehouse Management System May 1st API Partner for Citi Pay with Points - built in 88 days, provide API Jun 1st enabler for HSBC P2P wallet for B2C platform, provide API Feb FWMS Frozen Warehouse Management System Jun MMS Merchant Management System Jun LGWMS Large Goods Warehouse Management System Dec Launch of Digital Insurance products on HKTVmall, provide API Dec IMAX Inventory Material Exchange Jan 2nd WMS Warehouse Management System integrated with automated robotics Sept PSOS Physical Shop Operation Supporting System Jun Citibank’ s Direct Payment Channel by Cobrand Card, provide API Sept HKTVpay Pass through E-wallet function embedded in HKTV mobile App Sept ODS Outsourced Driver System Oct Takeaway Launch of takeaway function in HKTV Mobile App Jul HSS Mass Messaging, Email & App Notification Blasting System Jul Push Server App Notification Blasting System Dec MABS Merchant Ad Booking System Aug Chatbot Conversational AI Sept Merchant Single Sign-On Dec CSIS Customer Support Integrated System Oct HKTVmall Lite Mobile App for Golden Age Users Feb PSS Package Sorting System Aug Super Follow Launch of “Follow” button to acquire loyal customers Nov Community Interactive communication platform between merchants, customers and marketplace operators Nov Open Databank 1st and largest to open data bank on merchants & consumers in HK Aug POS Point of Sale Mar Real-time API Connection to Merchant WMS Solution Journey Building and End-to-End Solution from Scratch
- 33. Fully Devoted to Digital Ecosystem - A traffic driver and go-to digital platform for customers and merchants. A digital eco-system is a dynamic, ever-evolving integration of all digital channels that ensure the total experience for customers and real-time data collection. Content & Entertainment Digital Lifestyle Smart Mobility Social Engagement Customers HKTVmall Merchants Dynamic Landing Page HKTVLive Digital Insurance Financial Products EcoMart Open Databank Elderly App Social Commerce HKTVexpress
- 34. Open Databank – Unleashing the Potential of Big Data Jan 2021 Open Databank officially launched on Jan 13 May HKTV Ad ID converted & inserted into Salesforce Marketing Cloud for CRM / retargeting (eDM, App push notification, HSS message center) Sep Integration with HSBC for HKTVmall Merchant Digital Trade Financing Project Nov Completed Integration with HKMA CDI for 1-year pilot (blockchain & datanote) 2,007 Active Merchant Users 97 Academic Users Engaged Institutions : HKU, CUHK, HKUST, National University of Singapore
- 35. Open Databank for Intelligent CRM eDM App Notification Message Center Retrieve Customer Ad ID for Target Marketing HKTVmall In-mall Ads External Platform 01 01 02 02
- 36. HKTVexpress - Redefine Supermarket with 3-in-1 Model HKTVmall Supermarket Retailing Retailing HKTV express HKTV express 01 03 Online Pick-up Online Pick-up 02 24-hour “HKTVexpress” service to serve fast delivery for households nearby Extending offline-to- online convergence strategy of new retailing Currently operating 4 HKTVmall Supermarkets with more than 8,000 square feet 01 02 03
- 37. Over 42,000 Views 21X GMV Increment* Over 37,000 Views 60X GMV Increment* *Compared with Daily Average GMV of past 30 days Fuelled eCommerce Model with Live Shows
- 38. Social Commerce as the New Power for Customer Engagement Customized Recommendation Encourage user generated content to increase customer interaction, generate more traffic, explore good quality or new products on HKTVmall Explore Something New “Stickiness to our Apps” “Customer Loyalty” “Community” “Hot topics & Trends” “Traffic” “Interaction”
- 39. HKTVmall Lite – Benefit Every Range of Customers with Technology • Easy to use Lite App for golden age • Account & payment linkage between family members • The most loyal customer group • Core customers for the 2 supermarket chains (shake their fundamental)
- 40. Classified platform - Eco Mart to sell pre-owned items and services, encourage sustainable shopping • Free C2C Trading Platform, finding a new master for customers’ excessive items and have a more sustainable lifestyle • Support charities and NGOs for fund raising and volunteer recruitment
- 41. 01 02 03 Our Digital Ecosystem CONTENTS CONTENTS Technology Applications at HKTVmall Global Strategy with Brand New Invention
- 42. Unique Fully Automated Retail Store • Completed the installation for the first “Fully Automated Retail Store” with pilot run in software and hardware in full swing • We are confident that the first several “Fully Automated Retail Stores” will be launched in UK within this year as planned • To continue enhancing the functions and technology, we will continue to invest in technology research and development, including imaging artificial intelligence and automated picking system
- 43. Strong Demand Totally Different Technology Concepts Amazon Fresh / Tesco • Installed several hundreds of camera on the ceiling of a normal store • Using visual analytic technology to analyze every “action” of customers to determine whether they are buying certain goods and debit credit cards directly • Bring entry & exit convenience, but no competitive advantage in operating cost • Require more manpower than a normal store for replenishment and theft prevention
- 44. Perfect Solution in Cost Efficiency More Convenience Customers can place order anywhere & anytime to save time queuing in supermarket More Variety Our machine can handle everything, including chilled and ambient goods in all shapes & sizes More Savings No manpower are required to save labour costs significantly
- 45. What is the talents demand in Hong Kong?
- 46. What are the talents we are looking for? 1. We are not looking for “specialists only” • Not a single skill set could be applied and used over 5 years Can-do Attitude and High Flexibility • Passionate to do what they believe • Open-mind and willing to try what they don’t believe Resilience • Not afraid of being criticized, willing to accept the incompetence and eager to improve it • Anyone remember how is iPhone 1?
- 47. Thank you