Frost & Sullivan officially releases the '2024 China Retail Digitalization Enterprise Going Global: Current Situation and Trends White Paper' | Empowering global retail enterprises with digital transformation

The 'White Paper on the Current Situation and Trends of Chinese Retail Digital Enterprises Going Global' is based on the current development status of global retail industries and the changing needs of retailers for digital transformation. It analyzes the current development status of retail digitalization and the trends of Chinese retail digital enterprises going global. With consumers' increasing demands for shopping experiences and the need for further development of retail enterprises, there is a high demand for digital transformation among retail enterprises, indicating that the retail digitalization industry has enormous development potential. Information technologies such as AI, cloud computing, and big data provide strong support for the development of retail digital enterprises, helping them expand and optimize their global market layout.

Benefiting from the penetration of e-commerce and the rise of cross-border e-commerce, the market scale of the Asian retail industry increased from 3.81 trillion yuan in 2019 to 4.6 trillion yuan by 2024, with an annual compound growth rate of 3.9%. In the next few years, it is expected that the market scale of the Asian retail industry will reach 5.66 trillion yuan by 2029, with an annual compound growth rate of 4.2% from 2024 to 2029. Regionally segmented, the Chinese mainland accounts for 49.8% of the Asian retail market, followed by Japan and Southeast Asia, accounting for 8.7% and 7.4%, respectively. Thanks to the convenient shopping experience and diverse consumption scenarios, the Southeast Asian retail market has the greatest growth potential, followed by the Chinese mainland and Hong Kong, Macao and Taiwan regions. The population structure in Southeast Asia is relatively young, constituting a large consumer base and a highly dynamic demand group. Coupled with the high penetration rate of local internet, the digital economy has driven the high growth potential of the Southeast Asian retail market. The retail markets in Hong Kong, Macao and Taiwan mainly rely on their unique hub status to continuously unleash potential and have the function of a springboard connecting the mainland with global markets. In addition, with the increasingly close industrial chain synergy advantages of the Guangdong-Hong Kong-Macao Greater Bay Area, Hong Kong, Macao and Taiwan enterprises can rely on mature capital markets and digital capabilities to seize opportunities in cross-border e-commerce, high-end retail and other fields.

Data source: Analysis by Frost & Sullivan

The retail industry can be divided into physical retail formats and non-physical retail formats. Currently, physical retail remains the main retail scenario, such as supermarkets, convenience stores, department stores, etc. The physical retail industry in Asia relies on a large consumer base and the trend of smaller family structures, driving demand for local physical retail. The market scale of the physical retail industry in Asia increased from 3.03 trillion yuan in 2019 to 3.07 trillion yuan in 2024, with a compound annual growth rate of 0.3%. In the next few years, it is expected that the market scale of physical retail in Asia will reach 3.21 trillion yuan by 2029, with a compound annual growth rate of 0.9% from 2024 to 2029. With the advent of the digital age, in addition to the rapid penetration of e-commerce, physical retail is also showing a trend of digital and intelligent transformation. For example, AI and Internet of Things technologies can reshape store operations and supply chain management, leading to the rise of unmanned cashier convenience stores and significantly reducing the loss rate in the fresh supply chain. The layout of leading Chinese retail enterprises in Southeast Asia brings high-quality capital exports, efficient supply chain integration, and retail model innovation. This trend has had a certain radiating effect on the Asian market, promoting the progress of retail digital technology and further facilitating the development of the Asian retail digital market.

Data source: Analysis by Frost & Sullivan

The digital upgrade of the retail industry chain. In the rapidly changing market environment, retailers are actively embracing digital transformation and continuously increasing investment in related technical infrastructure. Digital transformation not only enables retailers to collect and analyze large amounts of data, thereby more accurately grasping consumers' needs and preferences, but also helps them formulate more personalized marketing strategies, providing consumers with a more considerate shopping experience. At the same time, the application of digital technology has greatly optimized the internal management and operational processes of retailers. For example, by deepening the integration between stores and warehouses, inventory management has been refined to improve efficiency and reduce costs.

The omnichannel model has become the new normal. The omnichannel retail model is the deep integration of inventory, customer service, and sales by retailers or brands to achieve efficient internal management and provide convenient consumer experiences. In recent years, changes in consumers' shopping habits have driven the development of omnichannel strategies, especially under the backdrop of the pandemic, where consumers' dependence on online shopping has increased, prompting retailers to accelerate their online channel layout. In addition, the improvement of IT infrastructure and data analysis capabilities enable retailers to track consumer purchasing behavior across multiple touchpoints, achieving precise marketing and personalized recommendations. Currently, the omnichannel model is gradually becoming the new normal in the retail industry, reshaping the operational logic of retailers and becoming a necessary condition for retail enterprises to create value.

Timely delivery services are developing rapidly. Consumers' demand for high-quality instant delivery services is increasing day by day, especially in areas such as fresh produce and daily necessities. Instant delivery services have become an important part of consumers' daily lives. To meet this trend, retailers need to enhance their omnichannel operational capabilities. This includes not only expanding product offerings to meet consumers' increasingly diverse instant needs but also optimizing delivery route planning to improve delivery efficiency and service quality. In addition, improving order recommendation and scheduling processes is also crucial, which helps retailers predict consumer demand more accurately, achieve rapid response, and fulfill contracts efficiently. At the same time, the application of technologies such as big data and AI can improve delivery efficiency and service quality through intelligent scheduling systems.

The transformation of the store-cum-bin integration model. The functions of offline retail stores are undergoing significant changes, gradually shifting from traditional sales terminals to multifunctional nodes, taking on storage and distribution functions similar to warehouses. Behind this transformation is a profound change in consumer demand—personalized consumption has risen, making instant delivery a key, and stores and pre-warehouses, as localized supply nodes, are becoming the core of meeting this demand. Currently, the storage cycle for goods is gradually shortening, inventory management is moving closer to the consumer side, which not only accelerates the optimization of supply chain efficiency but also makes the inventory level closer to the actual needs of consumers. Through the deep integration of online and offline goods and delivery services, the coverage of online services has been significantly expanded, improving consumer reach, and the space utilization efficiency of stores has also been enhanced due to their multifunctionality.

Retail digital solutions are designed to help local retailers establish a comprehensive digital retail business. They are achieved by providing configurable SaaS modules, optional collaborative hardware or software, or developing customized solutions to meet customers' unique needs. The main objectives are to improve local retailers' operational performance, strengthen cost control, further achieve revenue growth, and ultimately enhance the shopping experience for end consumers. At the same time, retail digital solutions mainly include retail SaaS, local retail digital solutions, and other related value-added services. These value-added services can be sold independently or as part of a solution package.

Thanks to technology-driven adoption, the popularization of mobile payments and diverse consumption scenarios are driving a strong growth trend in the Asian retail digital industry market. The market size has increased from 111 billion yuan in 2019 to 344 billion yuan by 2024, with an annual compound growth rate as high as 25.4%. With the improvement of infrastructure such as cloud computing and the Internet of Things, as well as policy support for digital transformation, the Asian retail industry will further upgrade towards data-driven directions, forming a full-link digital ecosystem. In the next few years, the market size of the Asian retail digital industry is expected to reach 947 billion yuan by 2029, with an annual compound growth rate from 2024 to 2029 as high as 22.5%.

Data source: Analysis by Frost & Sullivan

The upstream of the retail digital industry chain is based on infrastructure and cloud services, constructing a digital foundation that supports the entire industry. The infrastructure layer consists of four parts: data centers, servers, memory, and network transmission, providing physical carriers for data storage, transmission, and processing. Cloud services build virtualization technology platforms through IaaS (Infrastructure as a Service) and PaaS (Platform as a Service), enabling elastic configuration of computing resources and standardized environments for application development.

The midstream of the industrial chain focuses on retail digital enterprises. Relying on the upstream technology foundation, they develop intelligent management systems, data analysis tools, and business application platforms, forming a technical service system covering full-channel operations, consumer insights, supply chain optimization, etc. Retail digital enterprises such as DianDuo leverage the upstream technology ecosystem to enhance their competitiveness.

Retailers at the downstream of the industrial chain are in the development stage of digital transformation. Leading enterprises rely on digital middle platforms to build self-controllable technical systems, while small and medium-sized merchants quickly acquire digital capabilities by subscribing to cloud services.

Data source: Literature search, Frost & Sullivan analysis

In the upstream of the retail digital industry chain, Microsoft's Azure cloud platform can provide global cloud computing infrastructure for midstream retail digital enterprises, enabling them to handle high-concurrency data processing and analyze customer needs in real time. In addition, Microsoft's enterprise-level security solutions enable retail digital enterprises to better provide data privacy protection services. Its service network and data centers are deeply and widely deployed in the global market, providing infrastructure construction and localized compliance support for retail digital enterprises, helping them expand globally.

Multi-Digits Intelligence (02586.HK) was established in 2015, focusing on providing retail digital intelligence solutions for retail enterprises to meet the needs of all key operational aspects. According to Frost & Sullivan data, in 2023, Multi-Digits Intelligence was the largest retail digitalization solution provider in China by both revenue and total merchandise transactions. In terms of revenue in 2023, Multi-Digits Intelligence was the leading retail digitalization solution provider in Asia, with a market share of about 4.2%. As a leading retail digitalization solution provider in Asia, Multi-Digits Intelligence focuses on core retail service cloud solutions, concentrating on two core business segments: Dmall OS operating system and intelligent IoT (AIoT) solutions. With the surging wave of technological transformation and the rapid rise of generative artificial intelligence (GenAI), which continuously affects the operational efficiency and business model of the retail industry, Multi-Digits Intelligence has continuously tackled technical challenges and innovated independently. By deeply exploring the application potential of GenAI and its cooperation with robots in retail scenarios from multiple dimensions, Multi-Digits has created a series of exclusive AI Agent products for retail scenarios, promoting the AI upgrade of retail businesses.

Data source: literature search, company annual reports, Frost & Sullivan analysis

The multi-point digital retail core service cloud solution provides a rich set of service modules and continuously upgrades products. It covers various retail operation business modules, including multiple scenarios such as goods, users, stores, supply chain, finance, and management. It helps retailers achieve full-process digitalization and provides comprehensive data insights, assisting retailers in achieving efficient transformation amidst the digitalization wave.

Data source: literature search, company annual reports, Frost & Sullivan analysis

DianDuoshi Digital Intelligence is committed to building retail infrastructure in the AI era and exploring AI-driven new retail models.^[1]Promote the application of cutting-edge technologies in the retail field, create a new retail system that integrates efficiency, convenience, and quality, and provide consumers with a brand-new consumption experience. Adhering to the concept of 'Chinese wisdom, global empowerment', actively expand domestic and international markets, use AI as a fulcrum to drive the intelligent upgrading of the retail industry, explore refined industry models, and assist customers in achieving digital transformation.

^{Note [1]}The concept of 'AI New Quality Retail' was first proposed by Dr. Zhang Wenzhong, founder of Wumart and DianDian Digital Intelligence, in 2025. It aims to continuously promote innovative models that deeply integrate AI with retail. By creating a new retail system that combines efficiency, convenience, and quality, it seeks to comprehensively reconstruct the distribution model, create a brand-new consumer experience, and continuously unleash the new quality productivity of the retail industry.

In 2015, DianDuoshou Digital Intelligence was established, becoming the first company in China to embark on digital retail exploration.

In 2020, Dairy Farm reached a strategic cooperation agreement, setting sail on the journey of multi-point digital intelligence internationalization.

In 2021, the international market accelerated its pace, and Dianzhishou Digital Intelligence reached an international strategic cooperation intention with German retailer Metro.

In 2022, DianDong Digital Intelligence Services served 569 customers, covering five regions and countries including Mainland China, Hong Kong (China), Singapore, Cambodia, and Poland.

In 2023, the Southeast Asian market achieved new breakthroughs, digitizing and intelligentizing multiple services for SM Group, the largest local retail giant in the Philippines.

In 2024, the Southeast Asian market was fully launched, with multi-point digital business covering 10 countries and regions, and the global customer base increased to 591.

DianDong Smart has successfully expanded its business into overseas markets, integrating global advanced experiences into its products. DianDong Smart has signed long-term cooperation agreements with several leading overseas retailers, and the Dmall OS system has also launched more and more functional modules overseas. It has now rapidly spread to countries and regions such as Cambodia, the Philippines, Malaysia, Singapore, Indonesia, Brunei, and Poland.

Data source: literature search, company annual reports, Frost & Sullivan analysis

Case 1: SM Investments Corporation ("SM Group")

In 2023, DianDong Digital Intelligence launched in-depth cooperation with SM Group in the Philippines, covering multiple brands such as SM Hypermarket, SM Supermarket, and Savemore. By the end of 2024, SM Group had successfully launched the DianDong Digital Intelligence cashier system and store management system. The outstanding implementation results won high praise and recognition from customers, and both parties reached a consensus to continue deepening cooperation in more areas.

Case 2: DFI Retail Group Holdings Limited ("DFI Group")

The DFI Group is a renowned retail group in Asia, covering various aspects of consumer life across multiple countries and regions.

DFI Group has partnered with MultiPoint Digital Intelligence. Based on the application of AIoT and big data technologies, it has comprehensively integrated manual cashiering, self-service shopping, and service desk areas to optimize the consumer service experience. Self-service cashiering is displayed through the idle status of intelligent teller lights, helping service staff in self-service areas effectively direct traffic flow and effectively alleviating the congestion in self-service areas during peak hours.

Case 3: Metro AG

In 2021, Dian Duoshou Smart expanded its business to the European market through cooperation with Metro AG and its subsidiaries, and began providing the Dmall OS system to physical stores of Metro in Poland. In 2022, it started providing the Dmall OS system to stores of the European Metro Group in Poland. In 2023, it entered into a framework agreement with Metro Digital GmbH, a digital service provider under Metro AG, to provide retail digital solutions to franchise customers of the European Metro Group. It further concluded different module agreements with the European Metro Group, gradually integrating services into about 500 stores in Poland.

The trend of Chinese retail digital enterprises going global is on the rise. In 2021, Haiding launched the Haiding Retail Cloud SaaS platform, providing comprehensive digital and intelligent solutions across all channels and links for businesses in formats such as shopping malls, convenience stores, fresh produce, and snacks. Haiding actively promotes its internationalization strategy and has served many large enterprises or international shopping mall groups, including Midea Group, Yuanchu Food, Pop Mart, Dubai World Trade Center Group, Philippines DIVIMART, Philippines ATAW, and Thailand's Big H Supermarket. In addition to leveraging the leading overseas layout of its subsidiaries to deepen the group's internationalization strategy and accelerate overseas business expansion, Haiding is also actively promoting its internationalization strategy across various business sectors at the group headquarters, continuously expanding the applicable scenarios for overseas expansion and services. Hanshou Technology is a provider focused on intelligent IoT hardware and industry digital solutions, mainly serving the general retail industries such as shopping malls, 3C products, and catering. Hanshou Technology's AI technology solutions combine hardware and software such as AI cameras, electronic price tags, and sensors to intuitively, conveniently, and real-time monitor and display store operational status, promoting the standardization of processes for store layout design, category management, pricing, and consumer behavior analysis. Hanshou helps stores reconstruct the 'people, goods, and place' relationship by providing digital store solution applications that combine hardware and software, creating digital application scenarios, and improving the overall operational efficiency of stores. Hanshou Technology is actively expanding its global layout, relying on its outstanding product performance, delivery efficiency, and technical service advantages, to actively deploy in markets such as Spain, Portugal, Poland, Canada, Southeast Asia, etc. It has established a complete sales and service network in major markets such as Europe, Asia-Pacific, and America, and has established deep cooperation with international retail giants such as Jeronimo Martins Polska S.A., covering more than 500 customers in over 70 countries and regions around the world.

Chinese enterprises are increasingly focusing on global multi-point layout when going global, ranging from traditional European and American markets to Southeast Asia, emerging markets in the Middle East, Africa, and Latin America. Chinese retail digital enterprises are implementing a globalization and diversification strategy.

Southeast Asia shares a close geographical proximity with China, cultural ties, and business connections, giving Chinese retail digital enterprises an advantage in business development. The retail digital industry in Southeast Asia is still in its early stages of development, with a relatively low overall digitalization level in the retail sector. With consumers' increasing demands for shopping experiences and the need for further development of retail enterprises, as well as the support of the ASEAN Framework Agreement on Digital Trade, the Southeast Asian market has a high demand for digital retail, presenting tremendous development potential for the retail digital industry in Southeast Asia.

Utilizing modern information technologies such as AI, big data, IoT, etc., software services are developed according to the characteristics of local enterprises and consumers' consumption habits. These services provide smart retail solutions for overseas retail enterprises. Retail digital enterprises collect data from various aspects of retail stores through modern information technologies such as big data and AI, as well as devices like intelligent sensors, providing a data foundation for the analysis and decision-making of retail enterprises. Enterprises are increasingly adopting advanced distributed system architectures and cloud computing technologies to improve system availability and stability.

Retail digital enterprises need to fully consider cultural differences and laws and regulations in different countries and regions during globalization. They should deeply understand the business models, consumption habits, etc., of local retail markets, identify target customer groups, customize product functions, and in countries with diverse languages, software products need to support multiple local languages. Building a localized team is an important guarantee for achieving deep operational capabilities. Team members who are familiar with the local market environment, cultural background, and customer needs can effectively communicate with customers. In-depth market research and comprehensive after-sales service are also effective means to maintain a good corporate image and brand reputation.

Cooperating with local infrastructure providers, cloud computing service providers, and other enterprises can effectively improve market expansion efficiency. By constructing hybrid cloud architectures with local cloud computing service providers, data sovereignty compliance issues can be avoided, and more adaptable application products can be developed. Strengthening close cooperation with local upstream and downstream enterprises, sharing resources, and exchanging experiences can better cope with market changes, enhance competitiveness, and build a localized cooperative ecosystem characterized by shared technology, resources, and risks. Through this localized cooperative ecosystem, Chinese retail digital enterprises can deeply penetrate the local industry market during their overseas expansion, build core competitiveness in the region, and achieve strategic development and investment through resource sharing, thereby expanding their influence.

Artificial Intelligence (AI) has the potential to significantly improve the retail industry. Its in-depth insights will drive improvements in customer experience, operational methods, and overall efficiency. AI technology is not only a driving force for the development of retail digital enterprises but also an important tool for them to optimize their products and services. By combining AI technology with product services, it helps customer enterprises achieve efficiency improvements, accurately position themselves in the complex and changing overseas market environment, and enhance competitiveness.

1) Intelligent and personalized product customization, optimized services. Retail digital enterprises analyze the business habits, needs, and data feedback of different overseas customers through AI technology, creating exclusive product feature modules and interface layouts to provide personalized customization services for customers.

2) Intelligent marketing services to enhance customer experience. Retail digital enterprises use technologies such as Natural Language Processing (NLP) to optimize and adjust according to local cultural customs, language habits, etc., for intelligent marketing, helping enterprises increase their visibility.

3) Intelligent supply chain management. Efficient supply chain management is crucial for retail enterprises. By using AI to predict demand, retail businesses can reasonably arrange procurement plans and reduce procurement costs. On the other hand, retail digital enterprises apply AI to warehouse management systems and logistics distribution systems, combining machine algorithms to optimize inventory layout and distribution planning, effectively saving space and costs.

With the continuous innovation and development of AI technology, it will provide stronger support for Chinese retail digital enterprises going global. The deep application of AI technology in the retail field will further promote operational efficiency, bringing consumers a more personalized, intelligent, and convenient shopping experience. On the other hand, with the acceleration of the global digitalization process, the consumption potential of emerging markets will be further unleashed. Chinese retail digital enterprises can better seize these market opportunities by leveraging AI technology to expand and optimize their global market layout.