LING

SHOU TONG
ALIBABA’S NEXT
INNOVATIVE
DISRUPTOR?
BRICK & MORTAR GOES DIGITAL
LING SHOU TONG
Ling Shou Tong (roughly translates to “retail integrated”) is Alibaba’s new retail
inventory management platform and it’s disrupting convenience stores and post
and parcel delivery in China.

LAUNCHED IN 2014 OVER 600,000 or 10% 22% OF STORES 40% INCREASE

Ling Shou Tong aims to of small, independent are expected to in Single Day sales
help China’s 6 million stores in China now operate on the (similar to Black
small, independent operate on the Ling network by the end Friday in the USA) in
stores improve sales and Shou Tong network. of 2018. 2017 versus 2016.
inventory management.

Copyright © 2018 Accenture. All rights reserved. Grocery, convenience store = originated at 2
KNOWING BEATS GUESSING

Previously, convenience store owners based

inventory decisions on intuition. Staying
relevant has been a serious challenge.
Now, store owners can use data-driven
insights on the Ling Shou Tong platform to
stock inventory proactively. Consumers can
shop in-store or online and have items
delivered directly to them, quickly.

Copyright © 2018 Accenture. All rights reserved. 3

ONLINE AND OFFLINE DATA

The Ling Shou Tong platform is free for

stores to use. In exchange, Alibaba
receives consumer data via the cloud to
improve its online and brick and mortar
capabilities.
The network also enables Alibaba to
serve customers it doesn’t currently
reach through its online platform.

Copyright © 2018 Accenture. All rights reserved. 4

RENOVATING THE SUPPLY CHAIN

Ling Shou Tong is digitizing the traditional supply chain of small, local businesses into a
more efficient, data-driven network through its centralized, cloud-based platform.

Small, independent
Brands
stores

LING SHOU
Distributors TONG City partners

Center of information exchange

Centralized storage and logistics

Regional Existing
warehouses warehouses

City warehouses Local warehouses

Copyright © 2018 Accenture. All rights reserved. Information flow Goods flow Offline support 5
LAYING THE
GROUNDWORK
Our research shows that there are three capabilities that Ling Shou
Tong enables that will be critical in driving eCommerce growth.

FORWARD LOCAL LOW COST

STAGED OMNICHANNEL RETURNS
INVENTORY RETAIL MANAGEMENT

Copyright © 2018 Accenture. All rights reserved. 6

FORWARD STAGED INVENTORY

Consumers increasingly expect fast and free delivery.

There are over 600,000 stores operating with Ling Shou
Tong that could become micro-distribution centers. This
crowdsourced delivery network can ship packages to a
customer’s door quickly and cheaply, solving the last
mile challenge. It also enables Alibaba to store
inventory closer to the consumer.
Our research shows retailers are aggressively finding
ways to forward stage inventory which changes last
mile. Post and parcel organizations will be asked to
provide local, faster deliveries in these new networks.

Copyright © 2018 Accenture. All rights reserved. 7

LOCAL OMNICHANNEL RETAIL

Ling Shou Tong-enabled stores could evolve to enable an online to

offline capability in small towns and villages. These stores could
adopt Hema store-like capabilities to deliver insights-driven,
omnichannel retail beyond the big cities.
With nearly 1.5 million residents within three kilometres of a Hema
store in Beijing, imagine how many more consumers could take
advantage of omnichannel ecommerce from small, local stores.1

Copyright © 2018 Accenture. All rights reserved. 1. Alibaba to open 30 new Hema stores in Beijing by year-end 8
LOW COST RETURNS MANAGEMENT

E-commerce returns cost retailers millions of dollars.

Ling Shou Tong stores can become return hubs as
well as delivery hubs.
Customers can easily return items to a local store,
where Alibaba can track, manage and optimize the
items’ next destination at a much lower cost.
This creates a great opportunity for post and parcel
organizations to become the first mile of a returns
network, connecting local Ling Shou Tong stores with
centralized returns management centers.

Copyright © 2018 Accenture. All rights reserved. 9

ALIBABA OR AMAZON: WHO WILL WIN?

Join an ecosystem or obtain full ownership

The different approaches these two major retailers are taking will influence
shipping cross-industry.

ALIBABA AMAZON
Coordinate/digitize the supply chain Combine legacy and own delivery network

Enable an ecosystem Build and own

Drive offline/online shopping Primarily online with minimal offline

experience experimentation
AND WHO WILL
ADOPT THESE
MODELS NEXT?
GROCERIES
MEAL-DELIVERY
PHARMACEUTICALS
OFFICE SUPPLIES
+MORE
ONE THING IS FOR SURE
LAST MILE DELIVERY
IS BEING DISRUPTED
Digital technology is reshaping the industry. Players that are
innovating, joining ecosystems and reinventing their business models
to match changing consumer expectations are leading the way.

FREE FAST LOCAL

Read more:
The New Delivery Reality for Post and Parcel Players

Copyright © 2018 Accenture. All rights reserved. 12

FIND OUT MORE
BRODY BUHLER ABOUT ACCENTURE
Global Managing Director Title Accenture is a leading global professional
Accenture Post & Parcel Industry services company, providing a broad range of
services and solutions in strategy, consulting,
robert.b.buhler@accenture.com
digital, technology and operations. Combining
/brodybuhler unmatched experience and specialized skills
across more than 40 industries and all business
@brodybuhler functions – underpinned by the world’s largest
delivery network – Accenture works at the
intersection of business and technology to help
clients improve their performance and create
www.accenture.com/PostandParcel sustainable value for their stakeholders. With
449,000 people serving clients in more than 120
countries, Accenture drives innovation to
improve the way the world works and lives. Visit
Copyright © 2018 Accenture
All rights reserved. us at www.accenture.com.
Accenture, its logo and High Performance
Delivered are trademarks of Accenture.