CapitaLand (CAPL SP) - DBS Research 2017-08-25: Start Of A Journey With Alibaba And Lazada

CapitaLand (CAPL SP) - DBS Vickers 2017-08-25: Start Of A Journey With Alibaba And Lazada CAPITALAND LIMITED C31.SI

CapitaLand (CAPL SP) - Start Of A Journey With Alibaba And Lazada

  • Embracing e-commerce as an enabler rather than a disruptor to retail business through strategic tie-ups with Alibaba Group and Lazada Group.
  • CapitaLand (CAPL) will manage part of Alibaba’s headquarters in Shanghai; retail podium represents the future of modern retail offering a seamless O2O experience.
  • Setting up online mall on Lazada to offer CapitaLand’s retailers an online avenue to grow with collection points at Plaza and Bugis+.
  • Successful implementation marks a new era of growth for retail malls.



WHAT'S NEW


Marrying “bricks and clicks”. 

  • CapitaLand (CAPL) continues to show its progressiveness in advancing into the omnichannel retail strategy via two strategic alliances with Alibaba Group and Lazada Group. 
  • In China, CAPL signed an agreement to manage Alibaba Shanghai Center, its headquarters, marking the start of a strategic collaboration with the e-commerce juggernaut. Alibaba’s new Shanghai headquarters comprises four office towers and a retail podium.
  • CAPL will manage one of the office towers, and the retail podium which aims to bring a seamless offline-to-online (O2O) retail experience, starting at Alibaba Shanghai Center.
  • If successful, we see CAPL replicating this across its portfolio in order to bring forth a new era of O2O experience to consumers.

Setting up an online mall in Singapore. 

  • In Singapore, CAPL has also signed a strategic agreement with Lazada Group, substantially owned by Alibaba, to set up an online mall, aggregating the offerings of retailers at its malls on Lazada.SG. 
  • In addition, shoppers who make purchases online can choose to collect their purchases at CapitaLand-run malls. For a start, there are two unmanned lounges at Plaza Singapura and Bugis+ for shoppers to collect and return their parcels.


OUR THOUGHTS

  • While financial impact is minimal, this marks the strategic intent of the management to embrace e-commerce as an enabler rather than a disruptor to their business strategies. This enables retailers at CAPL’s malls to integrate both offline and online strategies to grow revenues. 
  • According to CAPL, the online shop on Lazada.SG will also position it as one of the more forward-thinking retail landlords allowing retailers to take on an omni-channel strategy to grow their businesses, complemented by a unique in-mall collection service for shoppers.
  • Interestingly, in an article in The Business Times, we note that a recent study by Zebra Technologies 2017 Retail Vision Study (RVS) mentioned that 88% of Asia-Pacific retailers plan to implement click-and-collect systems by 2021, which means that shoppers buy online and pick up their purchases in stores. This could potentially mark a new era of growth for brick-and-mortar shops in the future.




Derek TAN DBS Vickers | Rachel TAN DBS Vickers | http://www.dbsvickers.com/ 2017-08-25
DBS Vickers SGX Stock Analyst Report BUY Maintain BUY 4.350 Same 4.350



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