This piece examines Ling Shou Tong (Alibaba’s new retail inventory management platform)and looks at how it’s disrupting convenience stores and post and parcel delivery in China.

1. LING
SHOUTONGALIBABA’S NEXT
INNOVATIVE
DISRUPTOR?

2. 2Copyright © 2018 Accenture. All rights reserved.
BRICK & MORTAR GOES DIGITAL
LING SHOU TONG
LAUNCHED IN 2014
Ling Shou Tong aims to
help China’s 6 million
small, independent
stores improve sales and
inventory management.
OVER 600,000 or 10%
of small, independent
stores in China now
operate on the Ling
Shou Tong network.
40% INCREASE
in Single Day sales
(similar to Black
Friday in the USA) in
2017 versus 2016.
22% OF STORES
are expected to
operate on the
network by the end
of 2018.
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.
Grocery, convenience store = originated at

3. Copyright © 2018 Accenture. All rights reserved. 3
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.

4. ONLINE AND OFFLINE DATA
Copyright © 2018 Accenture. All rights reserved. 4
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.

5. RENOVATING THE SUPPLY CHAIN
Copyright © 2018 Accenture. All rights reserved. 5
Brands
Distributors
Existing
warehouses
Regional
warehouses
City warehouses Local warehouses
Small, independent
stores
City partners
Information flow Goods flow Offline support
Centralized storage and logistics
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.
LING SHOU
TONG
Center of information exchange

6. Our research shows that there are three capabilities that Ling Shou
Tong enables that will be critical in driving eCommerce growth.
LAYING THE
GROUNDWORK
FORWARD
STAGED
INVENTORY
LOCAL
OMNICHANNEL
RETAIL
LOW COST
RETURNS
MANAGEMENT
Copyright © 2018 Accenture. All rights reserved. 6

7. FORWARD STAGED INVENTORY
Copyright © 2018 Accenture. All rights reserved. 7
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.

8. LOCAL OMNICHANNEL RETAIL
Copyright © 2018 Accenture. All rights reserved. 81. Alibaba to open 30 new Hema stores in Beijing by year-end
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

9. LOW COST RETURNS MANAGEMENT
Copyright © 2018 Accenture. All rights reserved. 9
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.

10. ALIBABAORAMAZON:WHOWILLWIN?
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
experience
Primarily online with minimal offline
experimentation

11. AND WHO WILL
ADOPT THESE
MODELS NEXT?
GROCERIES
MEAL-DELIVERY
PHARMACEUTICALS
OFFICESUPPLIES
+MORE

12. ONE THING IS FOR SURE
LAST MILE DELIVERY
IS BEING DISRUPTED
Copyright © 2018 Accenture. All rights reserved. 12
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.
FAST LOCALFREE
Read more:
The New Delivery Reality for Post and Parcel Players

13. ABOUT ACCENTURE
Title Accenture is a leading global professional
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Copyright © 2018 Accenture
All rights reserved.
Accenture, its logo and High Performance
Delivered are trademarks of Accenture.
BRODY BUHLER
Global Managing Director
Accenture Post & Parcel Industry
robert.b.buhler@accenture.com
/brodybuhler
@brodybuhler
FINDOUTMORE
www.accenture.com/PostandParcel