CapitaLand (CAPL SP) - DBS Research 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+.

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.

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.

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

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