New Retail’s epicenter: Hangzhou’s “More Mall”
Alibaba is reportedly building a five-story shopping complex in Hangzhou. The development marks the fruition of “New Retail“, a term coined by Alibaba founder Jack Ma to describe “the integration of online, offline, logistics, and data across a single value chain.” According to media reports, the five-story shopping complex will host several Alibaba brands, such as the Taobao retail brand and the Hema grocery brand, with innovative features, such as unmanned stores and virtual fitting rooms.
Can e-commerce giants like Alibaba do brick and mortar retail better than traditional retail players? Retail industry observers will closely watch for early signs of the success or failure of More Mall, which will be located near to Alibaba’s headquarters. Some observers believe the combination of e-commerce, physical space, and high-tech logistics will become the future of retail, but other analysts note that New Retail may only mark e-commerce’s peak: e-commerce sales have begun to slow.
China’s State Council to promote foreign investment growth
On August 16, the State Council released a circular (Guo Fa  No. 39) that detailed measures to promote foreign investment growth as part of China’s opening-up strategy.
The circular entails 22 measures that could be divided into five categories, including reducing market entry restrictions for foreign investment, making supportive fiscal and taxation policies, improving the investment environment for national development zones, attracting foreign talent, and optimizing the business environment.
While concrete policy plans to help foreign investors have yet to be issued, foreign investors could take the circular as a positive sign of the government’s intent to further relax restrictions on foreign investment. This is particularly the case as specific ministries have been put in charge and implementation timelines have been outlined for each measure in the circular.
Alibaba’s second quarter revenue surpasses estimates
e-Commerce giant Alibaba has reported a 56 percent revenue increase since the first quarter of this year, surpassing forecasts made by Wall Street. This growth is driven by the surge in numbers of Chinese consumers buying a wide range of products online.
Alibaba’s profits reached RMB 50.1 billion (US$7.51 billion) during the second quarter. 86 percent of this revenue came from its e-commerce services, up from 73 percent during the same period last year. While the increase in Alibaba’s stocks were driven mostly by its e-commerce services, expansion in cloud computing and entertainment ventures diversified its core business.
Revenue from its cloud business grew by 96 percent to reach RMB 2.4 billion this quarter, with paying customers reaching one million, up from 577,000 last year.