Tencent super-apps helped a large American retailer expand its reach into China

Entering a new market with a different social structure, cultural history, and regulatory issues is never easy for a large retailer, even if the difference seems slight. On the technological front, a key issue when expanding into a new market is the need to build a new technology stack that suits the local consumers. This was a major roadblock for a large American retailer when it started on its journey to enter the Chinese market in 1996. 

Growing to its current level of over 400 stores with over $17B in sales and succeeding in the Chinese market requires a new technology stack and strategy. To accomplish this, the retailer turned to Tencent Cloud to support its expansion efforts and employed a four-component smart retail strategy: connect, engage, convert, and be data-driven.

• Connect –to identify and connect with potential customers using Tencent Ads, WeChat, and other tools in the Chinese market who were unfamiliar with the retailer
• Engage –to build a deep relationship with customers across the digital and physical worlds
• Convert – to turn shoppers into loyal customers by pushing product purchases through a Mini Program mall and using TenPay as a payment solution
• Data-driven – to focus engagement and marketing efforts using deep customer insights built on a customer data platform (CDP)

The retailer and Tencent employed a smart retail solution, which included Tencent Cloud Mall, data migration, and application migration. This solution supported e-commerce on Weixin through a mini-mall, physical stores, and fulfillment.

It started with a data migration effort at its core, which employed a PaaS solution to get the right data onto the cloud and in the right place, in a way that integrates with the rest of the retailer’s infrastructure globally. The second stage was application migration, which optimized the retailer’s domestic applications with security in alignment with its global practices but still supported the domestic Chinese omnichannel business.

Lastly, they created an engagement layer appropriate for the domestic Chinese market focused on Tencent Cloud Mall. This digital commerce platform integrates with the Weixin mini-programs, super-apps, applications, and more. Using a super-app designed for mobile devices, the retailer has an application that integrates with other applications, connecting people across chat and meeting applications and content through search and other means, providing the necessary services digitally, and connecting with the physical stores. 

Super-apps like the retailer’s application function better than standard mobile apps as they are extremely simple and hyper-targeted towards a purpose. As such, these have lower development costs and run better on mobile platforms. These applications are now spreading rapidly across the globe, with Tencent and the retailer at the forefront.

Frank Della Rosa

Research Vice President, SaaS, Business Platforms, and Industry Cloud, IDC