Hi, I'm Reef Quail, managing director of NRF APAC, and you're watching Five Things Friday APAC edition. Fantastic. Thank you, Reef. Well, on today's show, we've got five interesting elements, all with a a complete different perspective across the beautiful APAC region. Euan's going to take us through the World Artificial Intelligence Conference. I didn't know there was such a thing that just happened in Shanghai. Then we're going to go over to look at some interesting news from Reef where he's talking about the expansion policies, whether they're positive or not. Are you winning? Are you not? Who are the winners and who are the losers? And how certain regions are looking at that? Then we're going to come back to you and to talk about a beautiful brand called Molly T. What just out of interest you and what where is their HQ? Where's Molly TQ? In China, of course. Yes. China.
Chinese brand. Okay. Fantastic. And then I'll finish on a brand that we do know in Europe, Decathlon. Straight over to you, Yuan. Tell us what's the world artificial intelligence conference all about. I know. So the biggest surprise at the world AI conference in Shanghai is not a new chatbot is not an impressive video generator whichever it was actually realizing that China is bringing us to a completely different conversation altogether. So we're not talking about digital transformation but we're talking about business transformation. So is no longer asking how AI can write better or create advertisement faster, but it is really how do we redesign an entire business around AI. So it's no longer treated as a productivity tool. We're no longer thinking of it like that, but it's becoming the operating system of the enterprise. So let's say imagining that you are an ad agency or something like ad marketing agency. So instead of teams planning campaigns months in advance, whatever. So AI can now because you you have like a whole bunch of AI agents. Uh so the main AI orchestrator is like the role of the chief marketing officer supported by hundreds of specialized AI agents working together thinking about how do we uh predict uh demand from consumer behavior that is picked up with signals. Uh then they are immediately allocating media span measuring business outcome. Those are amazing stuff. So it's not about humans occasionally using AI. It's really organizations really thinking about how AI is coordinating. AI is optimizing and human beings just focus on judgment on creativity on the strategy itself. So it's rewiring you quite differently. And of course it's like the hottest time in in in Shanghai right now. And the amount of people in the expo is just so tremendous. The lines are so packed.
just just so many boots, so many things happening. There were startups, there were enterprises products, there were information on the different kind of AI products that is helping different from healthcare all the way to insurance all the way to uh building better cars, smarter cars, for example. Any industry you can imagine, they already have an idea on how to use AI to make it better. How about that? It wasn't it's not they weren't specifically focused on retail. No, not just retail actually. And was it in English? Yeah, a lot of uh a lot of a lot of the sign boards, a lot of conversations, a lot of pamphlets are actually in English. And obviously for retail very specifically I think if you want to be able to see something the AI is of course it's the robos all the robots right and they are they have robots serving tea at the roadside like literal roadside inside curios they have it serving um health care so medicinal because they will understand very quickly they could reconcile you know your pills for you. I think this is for this is a really great forum and I think one of the things that if you're thinking about total business transformation I think it's about the classification of technology if you put it on if you pl start plotting it on axis where the vertical axis is what AI does really really well and on the horizontal axis going to the right is what humans do really well the top quadrant is about augmentation so humans and AI together the bottom quadrant is what people do well what AI doesn't do well relationships customer service right on the left hand top left quadrant it's what humans don't like doing right and which is repetive ative task. So you've got a home for agents, right? And the bottom left hand corner where both of them are crap, why are you doing it in the first place? Right? So it's for many for many people like for all of this stuff because there's a a flood.
It's just about lattering where laying where that AI technology is going to land and how it's going to contribute to the transformation of your organization. I've got love it. Staying with you Reef inside retail story for us. Yeah, absolutely. It's um it's there. What we're seeing is we're seeing lots of I talked this about this recently about how the Chinese businesses are really looking to come outside China in 2024. They were all focused on internal. Now they're all coming out. And this is really interesting because you know this is another layer of regulatory control that I don't think many of the Chinese um organizations have faced before. So what this is is JD's trying to buy C economy which is a German uh consumer electronics brand. They have a thing called uh their brands are media market and Saturn. They're a a German electronics retailer.
Yeah. But the but the the the European Union has said hang on they've opened an investigation because they reckon that under foreign sub what they call foreign subsidies regul regulation. They've had unfair foreign state aid i.e. they've been provided preferential financing from the Chinese government, tax intenders and grants that have helped them offer a higher price economy and so the commission's blocked that in the in the European Union. So this is something that we're seeing more and more of and and um a JD are quite confident that they can overcome it. But you know for a Chinese for a Chinese business coming outside who who are surely being encouraged by the state to extend their tentacles around the world you know answering these sort of challenges is going to be difficult. Ah interesting. Now you've got the same type of story but with a a twist another way around. Yeah. So Sea Folly is an iconic an iconic sex swimware brand. It was founded in Bondi by the Hollis Hollis family. H A L A S in the 70s. Second generation took over.
Anthony Halis took over before CO and in CO they had had a big ge international expansion. But when co happened they really got hit hard. They had revenues over hund00 million swimware around the world but they faced a situation where they they couldn't cease to trade. So they went to VA. They were recapitalized after co and in since then they've had a really good run. They've they've been recapitalized by private equity out of Hong Kong. Okay, but this is interesting for me. The reason why I call this out is this is an Australian brand expanding into China. This doesn't happen for Australian brands. This is not a common practice thing. Australian brands go to North America or to Europe. They don't certainly don't turn up in ch in Shanghai. They've got a store in Shanghai. And China accounts for 32% of the growth in the swimwear market in the Asia Pacific region.
Yeah. This is a big deal. And so this is a cultural change for Australian retail. Yeah, this is something that's Chinese consumers aren't used to seeing and it's a big it's a big jump like this is a small market going to a big market. So this is an exciting exciting development I think for a company that's been around an iconic Australian brand that's been around for a very long time choosing to to expand into China. I love it. Coming to a different kind of spin uh on brands. I just have to do a quick plug because this feels there's I I interviewed the author of this book and I have no sales in the book but it's called brand global adapt local and the lady's a professor from from the US and she's worked all across the world but about how global brands get it wrong so many times when they're going into different markets and and it feels like this is another I don't know miscalculation but what's the story here?
Yeah. So LVMH won a very high-profile trademark infringement lawsuit in China against Molly T. Now simply a moly is a bubble tea chain right and so a court in sujo was of was ordering this moly tea to pay approximately 1.5 million US in damages for using if you see there uh that four petal floral logo it's very similar to LVMH iconic monogram but to Molly's defense mit is saying hello this is the traditional paang flower and it has been around in many of Chinese art and architect touch for a very very long time. If you look at our door and our let's say our but Chinese in in China you know the the a lot of things door motives on um silk screens or on a lot of things are actually of the same look.
So, a lot of people are so angry at LVMH that they turn up at Molly tea in support and they're buying a lot of tea and drinking a lot of tea and a lot of LVMH bags are ending up in the toilet section because you know they are they're expressing the sentiment of nationalism. You do not attack us when you have borrowed something from us. So, this is also a quite an interesting play of the local brands um using nationalism. I don't think this is on purpose clearly but it has helped Molly tea in a completely different way. This is this is fascinating isn't it? Because like and we talked about the rise of of of Chinese luxury. We've talked about but this this there's nationalism around brands. This is really cool. This is a really cool story because you know there's been some I think some over a long period a lot of these bigger international brands have taken the Chinese market for granted and now we're seeing a situation where you know Chinese brands are going well we're we're I got our own brands and we're going beyond our borders and we've grown up right and these represent our values.
You can't trample on those. That's that's pretty cool. That's true. Yes. Yes. But I I I obviously think that, you know, if you think you're a brand and you want to use nationalism as your only power, I think then that too has a lot to be uh has limitations. I'm not Yeah, it's not going to be easy. But in this case, the way it just happened really supported the local market and I also think that local brands actually have such great presence now outside of Shanghai. I think when I was walking in Suzo it there were just really very little international brands that is taking over interests of consumers and I I like that very very much. Well you want that diverse you want that diverse shopping experience. You don't want to feel like Nanjing road in Shanghai is the same as Shan which is the same as Fifth Avenue which is the same as Pit Street in Sydney. Like it shouldn't feel the same. It should be different.
Yeah. Keep being wi with with the beautiful Australia. The Kathlon brings affordable ondemand sports delivery to Uber Eats. Obviously, the Aussies being such sports fanatics, they need to have fast delivery or on sporting goods, which is an interesting commentary. I don't know in terms of, you know, you get your burger, you get your football from the same. Do you think I I I got to say this feels like a bit of spin, you know, but you don't think as as an Australian I haven't ordered a g pizza football. What am I going to order? You know, I I think it's interesting. I think obviously from an Uber perspective, this is they're trying to move and you have their technology as the delivery technology for fast delivery. Whether or not this expands, I think the other very specific community. So and I think it works if you're very communitydriven right so there are a lot of sports buff which is a very specific community they will end up hiking somewhere or doing something very different and you know they they want eats and then if they're eating and you know they they they are going towards a certain specific type of sports and they don't have certain need and they do have certain needs for example but very specific so how do you cater to this kind of personalization I think that's really interesting I reckon it'd be interesting if you you were playing football on on Saturday you went down to your local football field to play your opposition. You forgot your shin pads. So, you could deliver some shin pads and on delivered.
Okay. Well, listen. We've done that in fantastic time. 15 minutes there or thereabouts. It's we we've obviously I've missed you guys. It's been a few weeks since miss you too. Feel like an age. And until next week. Absolutely. Take care. Take care.
