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The boom in the Chinese local delivery market
The boom in the Chinese local delivery market 1678 1119 Altavia

The last-mile delivery market, which stems directly from the e-commerce sector, has grown considerably in China and was estimated to be worth over $250bn in 2018, indicating a significant change in consumer behaviour as we become accustomed to having all manner of products delivered to us at any time. Altavia Key Account Manager Stéphane Joly helps shed some light on this trend.

Being able to have pretty much anything delivered to you at any hour of the day or night has become the norm in China, where millions of customers’ relationships with the delivery sector have changed with the increasing digitalisation of the retail sector. The local delivery market has truly sky-rocketed, experiencing more than twice the level of growth of the e-commerce sector itself (56% and 24% respectively between 2017 and 2018).

 

“Sales outlets are finding that they have to open more or less 24/7 to meet the needs of an elusive consumer who can order a meal at any time of the day or night these days”, Stéphane Joly explains, “with restaurants now employing chefs to work from morning to night, ready to spring into action whenever an order comes in”. 

 

 

3 major home delivery companies

There are 3 giants who currently share the monopoly over last-mile logistics in China, representing the fierce war that is waging between Alibaba and Tencent.

 

Ele.me (Alibaba): this platform, the name of which is Mandarin for ‘Are you hungry?’, is used by some 170 million Internet-users and delivers for Starbucks, health & beauty store Watsons, cinemas and restaurants, among other companies.

 

Koubei (Alibaba): this site boasts some 160 million users who use it to book cinema tickets and spa treatments, as well as ordering meals, among other things.

 

Meituan (Tencent): this company, which originally specialised in group buying, has since grown considerably and now offers all sorts of delivery services.

 

“Any sales outlet, restaurant, cinema, etc. can register on these platforms, regardless of its size”, Stéphane Joly explains. “They simply pay a small fee for each transaction completed in return for access to a market of millions of potential customers, and delivery is free for the end-customer, too”. 

 

 

A meal delivered in under 30 minutes

Ordering meals for delivery has become a way of life, and Chinese consumers can do so several times a day, in fact. Once the order has been placed on one of the corresponding platforms, the ready-to-serve meal is delivered within a maximum of 30 minutes. “What’s surprising about China is that it’s not unusual to see very little difference in turnover between physical restaurants and delivery services!”.

 

 

Succumbing to the new diktat

All physical retailers are now also finding themselves forced to offer a fast and efficient delivery service, with Auchan-RT-Mart, Carrefour-Suning and Hema (Alibaba), for example, all succumbing to this new consumer diktat. “Retailers have no choice but to register on Ele.me, Koubei or Meituan, giving them access to a market of over 150 million users, if they want to survive. Then, of course, they just have to make sure they are flawless, since negative reviews and comments posted on platforms by unhappy consumers can have devastating effects”. 

 

 

A market with a very bright future

Whilst this new consumption pattern comes at a certain cost where the platforms are concerned (in terms of staff, packaging, shipping, etc.) and ‘super apps’ such as Ele.me, Koubei and Meituan are far from profitable (despite being valued at tens of billions of US$), local delivery volumes are such that the market has plenty of momentum left in it yet, and the thousands of drivers employed in the sector (and who have no social status!) will no doubt continue to risk life and limb on their mopeds to make sure we get our meals in under 30 minutes for many years to come. But what about all these tonnes of plastic packaging that in a matter of minutes becomes waste that cannot be recycled? Let’s hope that further thought will be given to the environmental aspect in the near future and that viable alternatives can be sought.

The role of e-commerce platforms in the sale of luxury articles in China: the case of JD.com
The role of e-commerce platforms in the sale of luxury articles in China: the case of JD.com 1562 1202 Altavia

 

 

In China, luxury products are rarely bought in the store or on the website of the brand itself but on platforms like Alibaba and JD.com. The latter, originating from Beijing, has more than one ace up its sleeve. We breakdown this perfectly calibrated phenomenon with Altavia Global Key Account Director, Stéphane Joly.

“JD.com, the largest retailer in China”

It is the 2nd largest e-commerce platform behind Alibaba. The figures presented at the conference given by Kevin Jiang, Vice-President of International Business at JD.com, confirm that the platform is now a key player.

 

Let’s take a quick look at the figures:

 

  • Over 300 million active users, i.e. up 30% compared to 2017.
  • Turnover in excess of $200 billion (value of the products that pass through the platform) at the end of 2018, i.e. up 150% compared to the previous year.
  • A $67 billion profit, i.e. +200% in one year for a stock market valuation of $46 billion.
  • “JD.com sees itself as the largest retailer in China and the world’s 3rd Internet company, behind Google and Amazon” explains Stéphane Joly.

 

 

A major platform

JD. com alone works with 160,000 traders. It sells electronics, fresh produce, consumer goods, textiles, Hi-Fi equipment, furniture and decoration… as well as luxury products.

 

“According to Kevin Jiang, platforms have become search engines: 37% of users use the site to look for products and 42% for inspiration” explains Stéphane Joly.

 

 

The advantages of JD.com

Although the Beijing-based platform remains behind Alibaba with its two platforms Alibaba, Taobao and Tmall that account for 600 million active users, it has nevertheless set itself apart in more than one area. “JD.com has decided to join forces with Tencent, whose messaging app WeChat is the largest social network in China, with 1 billion active users. This partnership is highly strategic as it allows the platform to collect a vast amount of data and thus optimise the targeting of its communication to users. Alibaba, for its part, does not use any social networks”. JD.com has also partnered with the search engine Baidu and Toutiao, a news and video content platform. “A highly intelligent positioning, that allows JD.com to collect information on products likely to interest its customers” adds Stéphane Joly.

 

Another advantage: counterfeit control. JD.com applies a strict policy that gets results – unlike Alibaba, which suffers from its lack of reliability in this area.

 

JD.com is also backed by excellent logistics. 90% of the articles available can be delivered in 24 hours within China. A VIP delivery system is also available, allowing young women, for example, to have their order delivered by handsome young men wearing white gloves…

 

 

JD Luxury

In China, luxury products are rarely bought in the store or on the website of the brand itself but on platforms like JD.com, which has launched JD Luxury.

 

Who are the website’s clients? According to Kevin Jiang, 74% are aged between 26 and 45 and 60% come from big cities.

 

“The website has great ergonomics and all the codes associated with brands are respected”, says Stéphane Joly. “A large number of prestigious brands, like Paul Smith, Prada, Tod’s, Escada, Fred, Versace, etc. have opened a boutique in their name. Delivery is handled by the platform”. The return rate, between 15% and 20%, is well below that of other Chinese websites; proof of the efficiency of its data collection, made possible in particular thanks to its partnership with Tencent.

 

“It appears that Chinese consumers of luxury products are becoming less and less accustomed to receiving deliveries from abroad”, reveals Stéphane Joly. The difference in the sales price between those applied in China and those in the country of origin is narrowing. The new anti #代购 (Daigou) laws – intermediaries that buy luxury articles abroad for a third party and take them through customs on their return to China without paying the import taxes – mean that 22% of purchases of luxury articles are made in China, compared to 8% previously.”

 

 

JD is able to target the ‘generation self’ which is creating its own fashion

Just a few years ago, Chinese consumers only bought brands (and often the same ones). Nowadays they are less followers and much more interested in design.

 

“Chinese consumers of the “generation self” are part of the 2nd generation of only children – the first without cousins,” explains Stéphane Joly. “They are very egocentric, curious, and confident of their ability to create their own fashion, on the hunt for a niche design product.” A real challenge for luxury brands, which can no longer predict what these consumers will buy. “We talk about Audience X to refer to the fact that with ultra personalisation, it is difficult to known what will be a success.” But the good news is that access to luxury products in mid-size and secondary Chinese cities means that growth for these brands is phenomenal.

 

 

The influence of key opinion leaders

Although the Chinese are confident of their ability to create their own fashion, they also follow the opinion of influencers on social networks. “Social commerce, linked to interaction between social media and the power of influencers, is highly developed in China”, notes Stéphane Joly. “In a short space of time, a brand can therefore skyrocket… or plummet! That was the case of Dolce&Gabbana at the end of 2018, which still has not recovered.”

 

An inescapable phenomenon that luxury brands must also incorporate into their strategy. As such, JD.com has been able to position itself, within 5 years, as the key intermediary in the quest to conquer this flourishing market

 

 

Pop-up stores: valuable sales activation tools.
Pop-up stores: valuable sales activation tools. 1677 1119 Altavia

Over the past 15 years, pop-up stores have become a very effective marketing tool to boost sales for brands and retailers. To what extent has this trend changed the face of retail? Petr Šafář, Head of the Retail Division at Altavia Česká, tells us more about this trend, which he believes is set to grow in the future.

First of all, can you tell us a little more about yourself, your career in the retail sector, as well as the position you occupy at Altavia Česká?

I work as Head of the Retail Division. Two years ago, we created a Retail Hub at Altavia Prague which concentrates our vast experience in design, development, production and the implementation of complex branded retail environments like store concepts, shop-in-shops, pop-up stores, displays and events on the move such as roadshows. All sorts of projects for top brands that we implement all around the world with the team and our suppliers.

 

Petr Šafář, Head of the Retail Division at Altavia Česká

I have a Master’s degree in architecture and construction and started out my career focusing on the design and construction of public buildings, public spaces, parks, leisure centres and sport halls in Europe and Australia. It was at that time that I began studying brand marketing and saw a great opportunity to pursue a career which would combine these two fields of expertise. I moved back home to Europe and was offered a job at the Prague-based international agency which was developing unique environments and concepts for global brands. My first project was the development of a unique two-story adidas shop-in-shop which we set up in London, in the Harrods department store. My second project was a new global shop-in-shop concept for Guess jewellery and watches which we developed and rolled out across the entire Northern Hemisphere. I mention this because these projects opened up the world of retail at its best for me and I was really impressed by the quality of the design, premium materials and the skills and experience of the people I had the chance to work with. I acted as an interim manager at adidas HQ in Germany on several occasions, and spent years working on a large number of store concepts, campaigns, events and other marketing projects that this brand and other presented to the world of retail. After a few years, I started my own company focusing on design, project management and installations and subsequently met Rodolph Crozier, Director of Altavia Česká. This led to the founding of the Retail Division in Prague.

 

 

The last decade has witnessed the rise of pop-up stores. To what extend – and how – have they changed the face of retail?

Very good question. To answer that we have to go back to before the year 2000. At that time, all the major brands created their store concepts as Brand Temples. They wanted to show off brand success in their stores and their branded environments were designed to demonstrate the strength, universality and ubiquity of the brand. They built closed environments designed for loyal customers who were following a “brand religion” and the trends they set. Only windows were used to attract potential customers to enter a store.

 

This approach – creating, developing and implementing such concepts – consumed huge amounts of money, manpower and time. However, if accomplished properly, the brands had their “temples” admired in shopping malls and high streets and successfully boosted sales. But ten to fifteen years ago the acceleration, new trends in retail, digital marketing and new platforms changed it all. The “old” brands realised that they are not in touch enough with potential customers, using outdated marketing techniques and struggling to present products or brands in a fresh, cost effective and attractive way.

 

On the other hand, in the last decade, hundreds of new brands and start-ups have emerged that have taken a different approach. They realised that to be able to compete with big names and with limited resources, they needed to get in touch with real people again, to look outside of their “bubble”. They adopted pop-up stores as a marketing tool to boost marketing and sales very effectively. And traditional brands quickly followed suit. Pop-up stores and events are placing the emphasis back on the customer experience, innovation and sales growth, but also represent an opportunity to explore new markets and to test new concepts.

 

 

How would you explain why pop-up stores have been so successful in the past few years?

Finance, Interaction and Scale. Physical stores are great, but they require a considerable long-term investment and commitment. Pop-up stores are a quick way to build solutions that give the brand a sense of demand, generate brand awareness and create a buzz. They also provide a way for brands to build a relationship with customers in person, offering unique experiences that can be shared.

 

 

Have pop-up stores become a mandatory step for any brand wishing to stand out? Who should benefit the most from a pop-up strategy in the retail industry?

Pop-ups offer a chance for companies to identify and understand their choices more clearly and go a long way to helping brands increase sales and diversify the product mix. This means that both customers and brand benefit.

 

 

Shop-in-shop, corner, standalone pop-ups: what makes these models different and to whom are they best suited?

Shop-in-shop is usually a takedown of an existing own store concept. Part of a store is rented by a retailer to a brand. This creates a very effective retail environment, and the modern pop-up store definitely has a lot in common with a shop-in-shop. The difference is that a shop-in-shop is a permanent multi-media solution for well-developed brands and requires long-term commitment and investment. On the other hand, pop-up stores are a valuable brand activation tool to help reach target audiences. They generate excitement and a sense of urgency, and provide an opportunity to test solutions that might be adopted later for a shop-in-shop.

 

 

How to attract the right customers to a pop-up store, whether in terms of location, experience and retail design?

Of course, the choice of the perfect location is essential. Pedestrian traffic is a must. There are several types of pop-ups – pop-ups inside stores, kiosks or booths in the middle of malls, vacant street-level retail spaces or pop-up spaces built for cultural or sports events. This means that the variety of possible solutions, locations, times and design is infinite and requires experienced planners. The planner should also always consider what stores will be installed next to the planned pop-up. Sometimes pop-up stores are implemented as a roadshow which means the design, engineering and materials need to be precisely developed and chosen taking into account the multiple installations, dismantling and storage of the dismantled store.

 

Moreover, it is a must to use social media before, during and after the event to build anticipation. It is also essential to hold special events to bring in extra attention.

 

 

Through which metrics/KPIs can brands and retailers best gauge the effectiveness of a pop-up strategy?

Brands should always set clear objectives, intentions and goals to determine what they want to accomplish. Based on these objectives, they can track the success both quantitatively a qualitatively. This means they can track traffic, sales conversions, impact on website traffic and dwell times, or observe customer motivations and direct responses to various designs and products.

 

 

Which pop-up concept has impressed you the most so far and why?

Samsung Cube, a pop-up store by our partner architects. It was designed and developed for Samsung and was built on one of Prague’s main squares for Signal Festival, a renowned cultural event held in Prague. The design reflected the magic of the festival – the art of light, design and emerging technologies– with approximately 2 million visitors each year. Samsung wanted to show off their mobile phone portfolio in a pop-up store using the motto: “Dream, experience, create big things”. The atmosphere, traffic and media coverage was a huge success. I liked every aspect of the project in terms of client wishes and of course the design, location and execution. In my overall experience, I’ve found various pop-up stores by Jack Daniels to also be excellent examples, whether trucks at cultural events, old-fashioned pop-up bars in shopping malls or merch pop up stores at airports.

 

 

In your opinion, what new trends in the pop-up retail sector are to be expected in the coming months?

What I see nowadays is a focus on ad-hoc concepts which are designed for seasonal but multiple use – in malls, on the streets, during cultural events and various sports events and at conferences. This type of pop-up store concept is created as a modular kit, which is very effective, easy to use, and allows marketing departments to create multiple setups and layouts.

 

 

CSR week 2019: reducing inequalities
CSR week 2019: reducing inequalities 1920 1080 Altavia

 

 

Now a major highlight. Every year, numerous events are organised during European Sustainable Development Week to promote inspiring projects and initiatives. The theme of the 2019 edition was reducing inequalities. An opportunity for Altavia to host its traditional CSR Week, and to raise awareness among its employees of the Sustainable Development Goals.

Altavia supports the United Nations Sustainable Development Goals

In France, over 900 projects were run from 30 May to 5 June, in all regions, to promote the Sustainable Development Goals. This year, the Ministry for the Ecological and Inclusive Transition dedicated the event to the fight against inequalities. “This theme is also one of the 17 UN Sustainable Development Goals”, reiterates Catherine Rehbinder, CSR Director at Altavia. “This week provided an opportunity to (re)present these goals to our employees.” Indeed, Altavia has been an agent of change for many years now. As a member of the Global Compact for over 10 years, Altavia reached the highest level of differentiation, Advanced, in 2018. The company backs the United Nations Sustainable Development Goals, as set out in the COP (Communication on Progress). “This document covers all of the actions carried out by Altavia to improve its impact on society and on the environment and the way in which the group supports the United Nations Sustainable Development Goals” explains Catherine Rehbinder.

 

 

Reducing inequalities on a daily basis

Thanks to its Positive Sourcing, Altavia already encourages the professional integration of marginalised individuals. A proportion of production is allocated to companies in the protected and adapted work sector, which employs those with disabilities. “Altavia has made real efforts to improve its social impact”, emphasises Catherine Rehbinder. “The aim is to increase the number of orders placed every year with the protected and adapted sector, but also to expand our panel by incorporating companies encouraging professional integration in the broader sense – dependent persons, companies run by representatives of minorities”.

 

Sustained awareness-building among employees is one of the levers identified to improve our impact. Visits to adapted companies were organised to remove certain obstacles and prejudices. Lastly, a Positive Sourcing Forum will be held at the St Ouen site in September to encourage exchanges with a greater number of inclusive companies.

 

 

CSR Week at Altavia Paris

During CSR Week, Altavia Paris employees received awareness training on social problems at a breakfast prepared by the vocational rehabilitation centre (ESAT, for Etablissement et service d’aide par le travail) “Les papillons blancs”.

 

The association Rencontre 93, with which Altavia Paris has worked for several years now, also came to present the “Studio Traversée” project on the creation of 3D video games, produced partly thanks to computer donations from Altavia Paris.

 

Work on the project’s visual identity was initiated at this inclusive event; a shared project that could continue over the coming months.

 

 

A global action at group level

“To raise awareness among all Altavia employees of the UN Sustainable Development Goals, explanatory posters were distributed in all of the countries in which we operate”, explains Catherine Rehbinder. A webinar was also organised during which the CSR team presented Altavia’s support for the UN Sustainable Development Goals to all of the group’s CSR ambassadors. It is important that each Business Unit develops its own CSR identity while at the same time following the example of the actions carried out at group level”.

 

One thing is certain: not only has Altavia sought to improve its impact on society and the environment for a number of years already, but its commitment to change increases every year.

 

 

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On craft & creativity: hand in hand towards more impactful campaigns
On craft & creativity: hand in hand towards more impactful campaigns 1600 892 Altavia

 

Big ideas don’t come easily. And even when you’ve stumbled on that one idea, it’s only when you apply the right amount of highly skilled craft that you make your idea pop. Pelle Craen, Creative Director at Altavia ACT*, shines his light on how craft lies at the heart of impactful creative work.

It all starts with an idea

The client has explained a business problem, the creative team has been briefed and they start ideating like mad men. The wheels start turning and it takes a serious amount of pondering, wandering, wondering, imagining until you feel you’re finally onto something. The one idea that you’re convinced will solve the client’s problem – or at least think you’re convinced.

 

 

But you’re just getting started

Got a big idea? That’s great. Now how are you going to make it concrete and understandable, so it impacts the consumer in the blink of an eye? How are you going to make sure that its design, its wording, its messaging… is on point? That’s where craft comes into play: the mastery of the specific arts needed for the project, from art direction and graphic design to copywriting and even technology.

 

 

It’s a matter of craft

The better the craft, the better the mastery, the higher the level of the finished product, and the bigger the chance your original idea will actually stand out from the crowd. Great craft allows you to dig for details and get every single thing about the work one hundred percent right, so that it impacts consumers more thoroughly and resonates longer with them.

 

 

Finding meaning and added value

Of course, it works both ways, as not even the best craft can save an uninspired idea. The idea should come from a true insight and must be developed with a clear purpose in mind. Great craft then allows to build further upon the idea, creating even more added value. It’s what you could call the golden triangle: finding the perfect balance between idea and craft to achieve maximum impact.

 

 

Craft requires dedication

Twisting, turning and sweating until you get the craft of every idea right: it needs to be embedded in the DNA of your creative team – and the entire agency. Everyone has to be on board, be equally dedicated and ambitious to keep improving their craft and keep challenging each other. It takes dedication to keep pushing forward until you come up with something fresh, greatly crafted.

 

[wproto_heading text=”About the author” tag=”h2″ header_line=”false”]

Pelle Craen

 

As a teenager Pelle discovered he had a thing for words. In his twenties he started playing with them and it actually landed him a job as a junior copywriter. As the junior became a senior, things got serious, and by his thirties he was doing freelance work for agencies and brands aplenty.

 

 

With a proven track record in both strategy and copywriting, Pelle took the creative lead at Altavia ACT* in 2017, on a mission to make impactful campaigns for clients such as Proximus, Goodyear, Nespresso, BNP Paribas Fortis, Shell, Rémy Cointreau, Tom&Co, Makro and AG Real Estate.

 

 

He’s known as someone who digs for purpose, and sinks his teeth deep into every mission. In his spare time he likes to pretend he can sing. He loves his wife and dog more than he loves advertising. And his favorite word is hottentottententententoonstelling. Don’t ask, it’s a Flemish thing.

 

Ultra-transparency in the retail sector
Ultra-transparency in the retail sector 1678 1119 Altavia

 

 

There’s a new mantra that seems to be sweeping the retail market, introduced by visionary brands in a desire to make a clean break from convention: ‘ultra-transparency’. A bold approach designed to appeal to customers in their search for authenticity. We took a closer look at this inspirational trend with Thierry Strickler, Retail Market Intelligence Lead at Altavia.

A new pitch: transparency

Price, practicality and accessibility are among the key factors that affect a customer’s purchasing decision, but some also look at an additional criterion that they perceive to be vital: transparency. They want to know how the product is made, where the raw materials were sourced from and the production conditions, along with the actual cost of manufacturing the product and the margin that the brand in question is making. “In an attempt to better convince and appeal to their customers, some retailers have introduced a new way of selling and doing business that focuses on transparency, or rather ultra-transparency, to be exact”, Thierry Strickler explains. “The main goal on which these brands are focusing their operations is to be able to provide evidence of the way in which their products, as ethical, responsible products that respect all of the parties involved, are manufactured and what they actually cost to make”.

 

 

DNVBs: where it all began

This concept of ultra-transparency was first introduced by DNVBs (Digital Native Vertical Brands), brands that were created online and interact with their customers.

 

American off-the-peg fashion brand Everlane, whose slogan, “Exceptional quality. Ethical factories. Radical Transparency”, is clearly displayed on its website, was one of the pioneers of this movement. “We believe our customers have a right to know how much their clothes cost to make. We reveal the true costs behind all of our products—from materials to labor to transportation—then offer them to you, minus the traditional retail markup”, the site explains.

 

 

Maison Standards, Jules & Jenn, Léo & Violette and co.

French brand Maison Standards has adopted the same philosophy. In the words of CEO Uriel Karsenty, “we explain our methods, costs and margins and open the consumer’s eyes to the practices adopted within the industry”.

 

Jules & Jenn, whose slogan translates in English as “Responsible. Accessible. Essential”, also claims to “maintain complete transparency at all times”.

 

And here is a prime example:

“Find out why €85 is a fair price to pay for our leather cleated boat shoes”.

 

 

Léo Dominguez, co-founder of the Léo & Violette brand, meanwhile, claimed in an interview with Isal Paris that “we wanted our main focus to be on transparency. We have established a series of common values regarding the way in which we communicate and talk about our brand from the very beginning. We decided to provide place the emphasis on the manufacturing of our products and the transparency of the materials used, as well as about us as a company, showing people who Léo and Violette actually are and what we are all about. This is still true five years down the line – we still spend a lot of time explaining what goes on behind the scenes and how the brand came about. We’ve always felt that our customers appreciate this sense of proximity and this transparency with regard to our background”.

 

And the examples continue to multiply. Take Sephora, for example, which created a product range entitled Clean at Sephora, allowing customers to easily identify eco-friendly products that do not contain any harmful ingredients.

 

 

Boosting trust and appeal

“Unveiling your manufacturing processes and the keys to your business model are great ways to boost the appeal of and trust in your brand”, Thierry Strickler explains. “This sort of positioning enables customers looking for authenticity to choose to support a transparent, responsible and uncompromising value system, and is a great way to establish lasting, tangible links with them”.

 

Even those who have not (yet) adopted this philosophy of ultra-transparency have started to take note. “We are dealing with disruptive players who have the advantage of introducing a new browsing pathway that is attracting the attention of retailers”, Thierry Strickler explains. “It is safe to say that the major players in the cosmetics, food distribution, fashion and even luxury sectors are all keeping a close eye on this new model”.

 

This may be a bold model, but it is not without its limitations; indeed, there is no mention of design or conception, both of which are vital stages in the process and sources of added value.

 

 

Luckin Coffee: delusions of grandeur in China
Luckin Coffee: delusions of grandeur in China 1677 1119 Altavia

 

 

With Luckin Coffee about to float on the New York Stock Exchange and overtake Starbucks in China, Altavia Key Account Director Stéphane Joly introduces us to this latest Chinese unicorn.

“ 

The US financial market is no longer enough – Shanghai launches its own Nasdaq

China, being the unicorn factory that is, recently introduced the Western world to one of its latest creations in the form of Starbucks’ Chinese rival Luckin Coffee, #瑞幸咖啡. The coffee chain is set to float on the New York Stock Exchange in May 2019 with the hope of raising $1 billion and consequently seeing its value reach nearly $5 billion. In order to achieve this goal and surpass Starbucks in China, however, the company will need to open a new outlet every 210 minutes!

 

Now unicorns may be mythical creatures whose futures and lifespans are so difficult to predict, but one thing for certain is that, however long or short their lives may be, unicorns do have an annoying tendency to attract money and to see their value reach dizzying heights!

 

 

Following the PER (Price Earning Ratio), Chinese investors have now invented the PDR (Price Deficit Ratio).

Luckin Coffee burns a considerable amount of money, much to the delight of its investors. Whereas alarm bells previously rang when PERs were too high, what we have now is a topsy-turvy situation where the higher the PDR, the more freely the money flows.

 

It is important to note that investors the world over have believed that companies like Amazon, which, of course, has just piteously withdrawn from the Chinese market, had a future, even though the company was still in the red in 2015, despite generating a turnover of nearly US$90 billion.

 

The Chinese are therefore about to launch their own Nasdaq – the Science and Technology Innovation Board – as if New York, the Hong Kong Stock Exchange and even the Nasdaq were no longer sufficient when it came to raising capital. As a result, technology companies will be able to get listed and raise funds more quickly on the Shanghai Stock Exchange, just as Beijing wanted and as President Xi Jinping announced in November 2018, by accelerating IPOs and therefore supporting the development of future national champions – one sure-fire way to do away with the United States’ dominance over the international funding of Chinese companies.

 

Beijing hopes to take advantage of small Chinese shareholders who are frustrated at not being able to invest in foreign markets as they see fit, and this new Nasdaq in Shanghai will enable Chinese investors, who are also particularly keen gamblers, to support the cash needs of these unicorns that they see and use on a daily basis.

 

 

Luckin Coffee: a prime example of a start-up’s ability to understand its market

Coffee consumption in China rose from virtually zero in the year 2000 to account for 2.4% of global consumption by 2018.

 

Even as recently as 2 years ago, Starbucks held nearly 80% of the market, but that was before the Luckin Coffee caribou set out from Beijing to defeat the little mermaid from Seattle!

 

The reality is that both companies have adopted very different models and have very different USPs:

 

  • Starbucks focuses on well-being at its outlets, with free Wi-Fi, baristas, etc. and a high price positioning that could be considered quite brazen when you think about the margins to be made on coffee! The initial idea, of course, was to allow customers to spend some quality time with friends, curled up comfortably on a sofa for a few hours, but alas, a 30-seater outlet where customers spent a few hours at a time was not going to generate sufficient turnover, and Luckin Coffee quickly realised this! Starbucks has positioned itself as a ‘third place’ that’s neither work nor home and has an international image that brings with it a certain social status.
  • When it came to a very individualistic country like China,  where delivery now generates over half of all restaurant business, Luckin Coffee decided to adopt a different approach. The company has a very clear understanding of its market and appeals to a much younger population, with 80% of its customers being under the age of 30 and a price positioning 20% lower than that of Starbucks. Coffee shops are springing up all over the place, with Luckin Coffee going from just 9 outlets in 2017 to opening over 2,000 in the space of a year, beneath office blocks and shopping malls, in places where there isn’t space to sit down. The company has focused on mass consumption, immediacy and ease of ordering and delivery and done away with baristas in the process! Delivery drivers make up Luckin Coffee’s main customer base, and one major factor that makes it different from Starbucks is that Luckin Coffee is a Chinese company.

 

Another thing that sets Luckin Coffee apart, of course, is the time Starbucks takes to form partnerships (as it has recently done with Alibaba). What’s more, the American company took too long to accept mobile payments using Alipay and WeChat Pay, instead favouring now-outdated cash and prepaid plastic card payments. Luckin Coffee, meanwhile, is a 2-year-old baby unicorn that has had the support of Tencent from the very outset.

 

So what next?

No one can predict what will happen next; although Starbucks, which has operated in China since 1999, does, of course, have a much greater market valuation than Luckin Coffee.

 

Coca-Cola has also recently invested in caffeine with its buyout of British chain Costa, with co-working unicorn WeWork, whose spaces are becomingly increasingly popular in China, also establishing a presence in this lucrative market.

 

There are, of course, plenty of examples of unicorns that have failed to reach any real level of maturity, with Ofo, for example, no longer with us and Mobike not looking very healthy, either. The barrier to entry is low, the aggressive price positioning not necessarily sustainable, names easily replaceable, products not particularly innovative and investors very versatile.

 

Without wishing to rain on Luckin Coffee’s parade as it basks in the glory of its flotation in New York, there is one question that begs to be asked: ‘who will be the next unicorn to get itself noticed in this thriving market?’

”

 

Stéphane Joly, Global Key Account Director, Altavia Europe

 

 

Bonial: re-connecting consumers to stores
Bonial: re-connecting consumers to stores 1500 1125 Altavia

 

 

Using digital technology as the primary source of store traffic. That is the challenge set on a daily basis by Bonial, founded in 2008, based on the same model as its parent company in Berlin. An overview of a company that has already bagged the big accounts.

The drive-to-store pioneer in Europe

The story of Bonial began in 2008, with the creation of the application kaufDA in Germany. The mobile app dedicated to the in-store preparation of purchases proved to be a great success, resulting in its international expansion as of 2011 under the name Bonial.

 

Since then, the company operating in France has set itself the ambition of reconnecting consumers to stores. “Since 2011, Bonial has enabled brands to better promote their in-store offers through digital media”, says Laurent Landel, Associate Director Bonial France. “In just a few short years, we have developed a platform that combines complementary solutions designed to enhance store attractiveness. Our solutions allow major chains to adopt a more effective communication strategy that appeals to their customers.” 

 

 

The Bonial platform

By synchronising offers at points of sale with the purchase intentions detected on its apps, Bonial allows brands to promote their local offers on the Web and on mobiles.

 

“The Bonial platform enables brands to better promote their offers, using customised targeting and content. They can use the Bonial audience network, or specific advertising formats on Google, Facebook and thousands of other websites, or their own communication channels. Whatever the case, Bonial helps brands better promote their offers”, explains Laurent Landel.

 

 

Distributors in France and Europe

Bonial works with the majority of distributors in France and Europe, in all business sectors (food, sport, clothing, decoration, furnishing, etc.). The drive-to-store expert boasts the following big names among its customers: Franprix, Monoprix, Orange, Norauto, Action, Decathlon, Lidl, Picard, Sport 2000, Groupe Casino, and Office Dépôt, among others.

 

“Bonial adapts to the issues and challenges of each brand”, affirms Laurent Landel. Our offer, which combines a qualified audience network, proprietary data targeting and technology dedicated to the digitalisation of in-store offers, allows us to meet the drive-to-store needs of each brand.” 

 

 

The goal over the coming years?

“Bringing customers to the store will become increasingly difficult for brands. However, we firmly believe that e-commerce will never replace stores. Consumers are more interested in in-store offers now more than ever: it is a day-to-day purchasing power concern for French people. Our aim is to assist all major retailers in France looking to use digital technology as a key lever to drive traffic to stores.” says Laurent Landel.

 

 

A partnership with Altavia

Great news! Bonial and the Altavia Group have recently decided to join forces. “As a European pioneer and leader, Bonial will further strengthen the Altavia RetailTech solutions with the most comprehensive and innovative drive-to-store offer on the market”, announced Laurent Landel. “This partnership will allow Altavia RetailTech and Bonial assist the retail sector with all of its drive-to-store problems, using recognised technology and expertise”.

 

GDPR: Fidzup, an exemplary case
GDPR: Fidzup, an exemplary case 1665 897 Altavia

 

 

On 19 July last year, the President of the French Data Protection Authority – CNIL – issued Fidzup, which specialises in generating in-store traffic, with a formal notice for failure to adhere to the General Data Protection Regulation (GDPR). Following several months’ work, the start-up launched a consent management platform that was perfectly in line with the Commission’s requirements. The sanction was lifted and Fidzup became a pioneer. Here we meet Olivier Magnan-Saurin, co-founder of the start-up.

It all began in September 2017…

The CNIL actually performed an audit of Fidzup in the autumn of 2017 and informed us that the consent we were obtaining with regards to the gathering of data was not “explicit and informed”. This triggered a series of exchanges of information and documents, before Fidzup was given an official formal notice on 19 July, around two months after the GDPR came into force.

 

 

What aspects did the CNIL request that you change?

It wanted us to review the consent that we were obtaining from end-users to access their location data.

In actual fact, Fidzup only gathers location data – the smartphone’s advertising ID or Wi-Fi login details, GPS location data, etc. Such data is of a non-personal nature since it includes no names or surnames, no addresses, no phone numbers and no email addresses. The CNIL, however, does consider this to be personal data on the grounds that it can be cross-referenced against external databases to reveal that the individual’s identity.

 

 

What action did you take?

The CNIL didn’t make any specific requests and, as we understood it, it was down to us to produce the text and the window that would be displayed to end-users in order to obtain their consent.

 

After our initial proposal was rejected by the CNIL we decided to work on a multi-partner window that would allow us to obtain consent not only for Fidzup but also for other players. We decided to offer a comprehensive list that would really be of help to publishers. We contacted the IAB, an organisation made up of online advertising companies. With their help, and on condition that we respected the framework in which consent was being sought, we obtained access to a list of members. As a result, we offer publishers the opportunity to obtain consent for over 500 partners through a single window.

 

We officially informed the CNIL that the work that we had undertaken seemed to meet the requests they had made in early October, with the platform now fully complying with the requirements of the GDPR. The formal notice was lifted on 29 November.

 

 

This consent platform has helped establish Fidzup as a pioneer…

Exactly. This multi-partner window has been perfected right down to the last detail. Fidzup it is now able to gather data with compliant consent, as well as supporting those publishers that so wish in ensuring their own compliance by offering access to its own solution for obtaining consent that will reflect the relevant regulatory changes. Of course, we are also committed to working solely with publishers who are GDPR compliant.

 

We are currently the only player in the drive-to-store market to have obtained both formal authorisation from the CNIL to do what we do and a sufficient volume of data to effectively support our clients in their campaigns thanks to a database compiled in accordance with the GDPR.

 

 

Colour management in Japan: progress for the sake of survival
Colour management in Japan: progress for the sake of survival 1717 1093 Altavia

The standardisation of the graphic chain is inevitable. Whilst some countries, such as Japan, have their own interpretations and adopt traditional methods, some players are working towards improving and standardising colour management practices. This is certainly true of Yukiko Inoue, who became General Manager of Altavia Japan in 2016.

 

What was your background prior to joining Altavia Japan?

My career began in Japan, where I worked in design development for the American and European markets at Hello Kitty. This gave me the opportunity to discover the world of graphic art and familiarise myself with the way in which the Japanese people work. I then went on to spend 15 years in France, where I got to know more about European design and layout methods.

 

 

And it turns out that the Japanese and European methods are really quite different…

Absolutely! Just a few years ago, before I met Hervé Lyaudet, who was Workflow and Colour Manager at Altavia Paris, I didn’t think there was anything to rival the Japanese way of working. After all, they are renowned for their reliability and discipline. But I wasn’t yet familiar with the secrets of colour management!

 

The method they tend to use in Japan, namely the press-proof method (whereby the proof is made directly on the production machine, the offset press) is hardly ever used in Europe any more. The advantage of the press-proof as often used in Japan is that the printing process doesn’t have to be particularly well fine-tuned since it is the data that is modified to achieve the correct outcome. Imagine asking a musician to play a piece of music on an instrument that’s out of tune and him deciding to change the notes on the score to make it sound right rather than simply tuning up his instrument! That’s a good representation of the problems we encounter.

 

In Europe, we prefer to adjust the presses in accordance with ISO recommendations rather than modify the data, essentially tuning our instruments rather than changing the score. We also have a clear advantage in the form of the FOGRA, of which the Altavia group is a member.

 

 

How would you illustrate the difference between the methods, for example?

In Europe, printers are adjusted in accordance with an ISO standard and process (PSO), the aim being to standardise printing machines against the same target. This makes it possible to simulate what the combination of offset presses will produce by means of digital proofing, among other things. This being the case, it is possible to achieve a good-quality print using the same file, regardless of the target country. The end result is a lot more unpredictable in Japan, despite the existence of the Japan Color certification system. It is virtually impossible to correctly print an image that has come from Europe without it requiring a great deal of manual intervention, which presents major problems in terms of cost and production time. We in Europe have ultimately switched from a subjective colour control system (the human eye) to an objective system (colour measurement device) – something that is very rarely used in Japan.

 

 

What weaknesses do you see in the Japanese method?

Firstly, the quality that it produces is questionable. Images for international clients are shot and approved in the home country and the aim is, of course, to reproduce the selected colour, but owing to the methods used in Japan (which involve little or no colour management) this requires a great deal of time (effectively altering the score rather than the instrument). Furthermore, images are always viewed under very low-quality, non-ISO lighting, which distorts perception. For us as Europeans, these methods are not considered viable. What’s more, they have a significant environmental impact, not to mention the fact that they are time-consuming and expensive.

 

 

To what do you attribute this lag?

The Japanese are very hard workers and love to learn, but the language barrier is a real hindrance, which explains why Japan finds it difficult to import new technologies. The strength of the Altavia group lies in the fact that it shares its expertise and boasts valuable experts such as Hervé Lyaudet within its teams.

 

The printing sector has made the transition from ‘expertise’ alone to advanced technical standards, which requires certain skills when it comes to colourimetry and colour management, as well as familiarity with ISO standards.

 

 

And your meeting with Hervé was, in fact, what led to the creation of a colour reproduction service.

Hervé started working in Japan a little over a year ago. He installed the whole digital proofing system, trained the operators and set up the studio, but there is still a long way to go and work to be done if our team is to become independent and, in turn, highly skilled in what it does.

 

 

Do you feel optimistic?

I do! Particularly as this all reflects a profound change in Japanese society. We are witnessing the emergence of a new kind of sensitivity with regards to things like ecology and personal development in the run-up to the Tokyo Olympic Games, to be held here in 2020. Changing people’s relationships with work, for example, is a major issue in current Japanese politics, as demonstrated by the Hatarakikata Kaikaku reform. A lot of Japanese citizens are starting to realise that it is in their interest to change, and that’s ultimately true of colour management, too: an increasing number of players realise how important it is that they evolve and adopt current methods if they want to survive in the long term.

 

Altavia Japan has successfully obtained a number of certifications with a view to promoting its expertise.

These include PDFx-ready Creator, which guarantees the quality of the exchange files that we create (PDFx), and PDFx-ready Expert, which attests to our knowledge of the PDFx exchange file format. Altavia Japan has also been a FOGRA Partner PSO (ISO 12647), attesting to our familiarity with ISO standards and offset printing, since the start of the year. Being a FOGRA Partner allows us to provide on-site support to companies looking to obtain their PSO (Process Standard Offset) certification, which is currently held by only two companies in Japan – Heidelberg and Altavia Japan.

 

 

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