1. Client : PayPal Country : Singapore
Publication : ZDNet.com
Date : 30 October 2012
Topic : Mobile-savvy Asia primed for virtual stores
URL : http://www.zdnet.com/mobile-savvy-asia-primed-for-virtual-stores-7000006601/
Daily :
Readership 15
Mobile-savvy Asia primed for virtual stores
Summary: Physical stores leveraging mobile technology will appeal to Asian consumers who already
enjoy shopping online, value the convenience and are tech-savvy, and also enable retailers to save
costs.
By Ellyne Phneah | October 30, 2012 -- 11:46 GMT (04:46 PDT)
Asia region is prime for virtual stores, which have been surfacing this year, as most of the population
here are already receptive to e-commerce, value convenience, are mobile-savvy and can look to
these "semi-physical" stores to enhance their shopping experience.
Unlike digital and online stores, virtual stores exist in the physical world but products sold are not
physically available during the shopping experience, remarked Aapo Markkanen, senior analyst of
devices, applications and content at ABI Research.
Instead, retailers make use of mobile technology--specifically, QR codes--to enhance the shopping
experience in these stores, he explained.
Technology also enables retailers to collect customer orders and deliver the products directly to
customers, he said.
Some Asian cities already have rolled out virtual stores. U.K. retailer Tesco, for instance, last year
launched virtual shelves in South Korea's subway stations under its HomePlus brand, while PayPal in
February rolled out a trial in Singapore's MRT stations allowing consumers to scan QR codes to
purchase products displayed on billboards.
Chinese e-commerce giant, Yihaodian, in October launched a variant of Tesco and PayPal's virtual
stores by making use of blank city spaces around the country and augmented reality technologyto
allow customers to shop virtually and have their goods delivered to their homes.
Suits Asia's young, e-commerce savvy population
The concept of virtual stores is set to gain traction in this region because its inhabitants already
are receptive to e-commerce, so the bar to adoption will not be too high, Markkanen explained.

2. Virtual shops allow shoppers to save time in comparison to traditional shopping experiences, which
is beneficial in Asia where large cities exist and long commutes by passengers are prevalent, he
added.
Spike Choo, principal consultant of ICT Practice at Frost & Sullivan Asia-Pacific, agreed, noting this
form of virtual shopping mimics "a typical trip to the groceries or local minimart", but provides a
more convenient way for busy commuters to replenish their daily necessities while commuting
between work and home.
Furthermore, this service will appeal to young adults between the ages of 20 and 35 who value
convenience and are already familiar with online and mobile shopping, Choo noted.
Markkanen pointed out it also could add some "hands-on" feel to the digital shopping experience,
filling a gap which many online shoppers miss out on when they make online purchases.
For retailers, therefore, virtual shopping may encourage more impulse purchases since shoppers
have a better idea and feel of the products, he pointed out.
Choo added the high costs of real estate in key Asian cities such as Singapore, Hong Kong and Jakarta
will also encourage more retailers to explore virtual retailing, which requires less physical space than
traditional shops.
"It can lower business costs [for them] substantially while extending their reach to some of the most
valuable customer segments," he said.
User experience, instant gratification needed for success
To attract targeted customers, retailers should ensure virtual stores mimic real-life shopping
experience as much as possible, Choo advised. For example, images displayed should be the actual
size of the product and labeled clearly to enable a shopper to confirm the purchase as fast as
possible, he noted.
It is also important for retailers to ensure the smartphone application used in the virtual store can
continue to work amid intermittent and sporadic mobile data connectivity, especially for virtual
shopping walls installed in subways and bus terminals, he added.
Markkenen noted store logistics should also be effective enough to permit same-day or next-day
delivery of purchases.
In addition, Choo said, logistics should offer flexible home delivery, especially same-day delivery to
the home or office, and support flexible payment models based on local market practices such as
cash-on-delivery.