{"id":20590,"date":"2016-11-18T17:56:16","date_gmt":"2016-11-18T22:56:16","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/bringing-new-yorks-fifth-avenue-to-china\/"},"modified":"2016-11-18T18:17:02","modified_gmt":"2016-11-18T23:17:02","slug":"bringing-new-yorks-fifth-avenue-to-china","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/bringing-new-yorks-fifth-avenue-to-china\/","title":{"rendered":"Bringing New York\u2019s Fifth Avenue to China"},"content":{"rendered":"

Alibaba wants the Chinese to shop at Macy\u2019s New York without leaving the comforts of their homes in Shenzhen. Last week, on Chinese National Ecommerce Day, the company launched Buy+, one of the world\u2019s first virtual reality (VR) shopping experience.[i]<\/sup> Buy+ is a meta mall which can be accessed through Alibaba\u2019s Taobao app. Using a VR viewer, a customer can experience shopping in New York or Tokyo and even have virtual models showcase apparel and accessories on a catwalk.[ii]<\/sup> The customer can view product details by staring at an item and authenticate payments with head movements, touch or by staring at a point on virtual display for longer than 1.5 seconds.[iii]<\/sup><\/p>\n

Historically, Alibaba facilitates value creation by creating a synergistic IT platform that connects consumers, merchants and service providers, increases transaction and marketing efficiency and expands the market base.[iv]<\/sup> Buy+ would further complement Alibaba\u2019s business model in several ways.<\/p>\n

To customers, Buy+ offers an enhanced shopping experience with more speed and convenience than those of typical online shopping. Buy+ restores the recreational aspect of shopping that is arguably absent in online shopping experience. Instead of viewing a static online gallery, shoppers can become virtual tourists as they trek shopping arcades in cities like New York, Tokyo and Sydney.[v]<\/sup> The immersive experience is not only valuable on its own right, it can also be more valuable than traditional brick-and-mortar shopping since shoppers can easily access product details and make payment in the blink of an eye.<\/p>\n

To retailers, Buy+ helps generate traffic and increase product impressions. The novelty of virtual reality shopping would attract customers to browse at shops who are already on Buy+. Additionally, because Buy+ shoppers have to move through a virtual space, retailers have more opportunity to cross-sell and stimulate impulse purchases compared to in an online shop where customers are accustomed to being able to search for the categories that they want. Retailers will also be able to take some of the appeals of their offline stores online. If before an Alibaba retailer can only rely on ads, search engine optimization or discounts to attract buyers, retailers can now use the visual appeal of their virtual shop as another marketing lever.<\/p>\n

The ability to create a meta space is especially valuable for non-Chinese retailers to access the Chinese market. Without building a department store in China, a retailer like Macy\u2019s can serve Alibaba\u2019s 437 million active users through Buy+ with a virtual shop based on one of their offline shops.<\/p>\n

Moving forward, Alibaba could consider a few things to further enhance its value proposition to customers and retailers:<\/p>\n