22 January 2019
Carrefour China has opened its first 'smart store', thanks to a partnership with internet giant Tencent. Photo: Bloomberg
Carrefour China has opened its first 'smart store', thanks to a partnership with internet giant Tencent. Photo: Bloomberg

Tencent steps into smart retail with Carrefour

Four months after announcing a cooperation agreement with French supermarket chain Carrefour in China, internet giant Tencent has marked an important milestone in a push related to ‘smart retail’.

Combining its technological strengths with the retailing expertise of the global chain, Tencent has backed the launch of a new store that promises to offer a better experience for Chinese shoppers.

On May 20, Carrefour opened a new Chinese outlet that will leverage Tencent’s technologies and the internet firm’s huge user base under the so-called new retail concept.

The facility, called Le Marché, was launched in Shanghai, making it Carrefour’s first smart store in China. 

The new store is spread over two floors totaling 4,000 square meters, about half the size of Carrefour’s regular outlets.

It offers 25,000 product types, mostly food, and customers can pay for their purchases with their WeChat accounts by scanning a QR code or enable payments with facial recognition technology.

WeChat is the widely popular messaging and payment app of Tencent, which also runs a host of other online platforms in China.

With the Le Marché store, Tencent is seeking to expand its online influence into offline, using the tie-up with Carrefour China to trial a shopping environment totally based on WeChat.

The new store features on-screen entertainment, including reality TV show Produce 101, from Tencent’s video arm. The shop will offer free delivery service for online orders and also features an open kitchen where customers can get fresh foods prepared for consumption on the spot.

The initiative is believed to be first step for Tencent in testing so-called smart retail.

In March, Tencent created a “Smart Retail Strategy Partnership Department” to create a complete digital solution package for smart retail and commercial real-estate sectors.

The company aims to empower and support retailers in terms of technology development. Tencent will provide a layer of services including the ability to connect with users, mini-programs, official accounts, cloud, and artificial intelligence.

That will enable retailers to serve customers better with Tencent’s online ecosystem partners.

The focus on smart retail is part of Tencent’s efforts to compete better with Chinese internet rival Alibaba Group, which has announced ambitious plans for its Hema supermarkets as it seeks to integrate online e-commerce with brick-and-mortar retail.

Alibaba’s founder Jack Ma has often waxed eloquent about the potential of “new retail”, touting the benefits that can be reaped by integrating online, offline, logistics and data to boost consumption.

Carrefour’s Le Marche in Shanghai could be the first of premier smart stores operated by Carrefour in partnership with Tencent, taking on Alibaba’s Hema outlets in the battle to change the way that China buys food.

Tencent’s chairman and CEO Pony Ma said in March that several merchants are interested in teaming up with his firm to push smart retail.

As of now, apart from Carrefour, Tencent has tie-ups with Yonghui Superstores, Wanda Group and Better Life Mall in the retail industry.

Alibaba has made several acquisitions in the retail sector and is involved deeply in their operations, but Tencent is opting not to get engaged directly in running the retail outlets.

It will remain content with offering the Tencent ecosystem to help support the retailers’ digital transformation.

Tencent stressed that it will not step into the business operations and decisions of its partners. All the data will be kept by the retailers, and not by Tencent.

According to Pony Ma, Tencent is just like a utility provider, offering an IT ecosystem for retailers.

In fact, smart retail is only a part of Tencent’s “super brain” strategy that aims to deploy artificial intelligence in cloud to help end-users. Tencent Cloud platform will build up three networks to connect people, things and intelligence within the Tencent ecosystem.

At a forum in Guangzhou this week, Pony Ma said the key to connecting people and things is to break down the wall that stands between the physical and digital worlds, and that Tencent will commit more resources to realize “Internet of Everything”, TechNode reported.

Looking at the company’s initiatives, it appears Tencent is giving a wider scope than rival Alibaba in terms of pushing digital transformation in society.

That should be good news for people as well as business enterprises in China. Meanwhile, it should also put to rest criticism seen in recent years that Tencent has been lacking a big new dream.

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