What does the FMCG giant Unilever have in common with grocery retailer The Kroger and a luxury watch brand Audemars Piguet?

The answer is Retail-as-a-Service (RaaS).

Unilever worked with JD.com to distribute goods to both online and physical stores in China, while Audemars Piguet launched its pop-up store on WeChat. In the US, food store The Kroger partnered with Microsoft to increase the level of personalization and productivity in their stores.

The term ‘RaaS’ has clamoring over the headlines over the years, but what exactly is Retail-as-a-Service?

What Is Retail-as-a-Service and Why Is It Becoming a Trend?

An analyst from Kantar Retail, Stephen Mader, defines the Retail-as-a-Service model as when “retailers build open platforms and toolkits that enable brands and third-party sellers to connect with shoppers directly through a physical store”.

Having an abundance of data in hands, these retailers bundle up services, customer data, technology, and its expertise to offer brands a service.

The emergence of ecommerce has reduced the in-store retail visits by billions in the US and part of the reason is because the experience offered by a traditional physical store is no longer enough for the savvy consumers. Besides shopping for products, consumers are slowly and surely seeking an experience when they’re out visiting the store.

“Nearly 3,800 stores are expected to close their doors by year’s end, and the brands that do survive will have done so by creating engrossing experiences.”

In order for the brands to maximize the potential of offline stores effectively, they need to provide engaging experiences to keep the consumers hooked. For example, Sephora combined activities that are completely unrelated to making a purchase into its app, while Samsung’s pop-up store was set up to allows consumers test its technology and experience rather than to focus on sale.

The trend also drives the growth of RaaS platform startups that provide an easy, cost-effective solution to brands wanting to launch physical stores.

In the US, a “Retail as-a-Service” startup b8ta has helped retailers such as Macy’s, Lowe’s, and 15 other consumer brands to set up pop-up stores and physical shops, incorporating technologies and cutting-edge gimmicks to traditional physical retailers.

Chicago-based Leap recently secured $3 million in funding to offer an end-to-end service — that ranges from staffing, experiential design, tech integration, and day-to-day operations — to help digital brands to launch a brick-and-mortar store.

Meanwhile, Fourpost is focusing on providing a ready-to-use retail space for digital native brands looking to open a physical store in the US, lowering the barrier of entry in terms of both capital and time. Each of these companies is tackling the problems that usually came with setting up an offline store and elevate the consumer experience.

“If you shop in one of our stores, you will feel different because we have gone to such a great length to remove the idea of your visit being about buying a product.” – Vibhu Norby, the co-founder and CEO of b8ta.

With over 70 locations, B8ta’s store allows brands to place their merchants and train shop assistants while gaining revenue from space rental and subscription fees from brands; Retail Dive

JD.com spurns the growth of RaaS in Asia

Chinese ecommerce giant JD.com is a big advocate of the strategy.

One of JD.com’s latest initiative to establish RaaS is the partnership with Chinese retailer Better Life. JD.com was also one of the first retailers to develop a mini ecommerce program on WeChat. To date, JD.com has developed and bundled up its marketing, logistics, financial services, and big data as a service and leverage these capabilities to help over 2,000 brands and its merchants.

JD.com also partnered with Google to develop next-generation retail infrastructure solutions by combining JD.com’s supply chain and logistics expertise and Google’s technology strengths.

All of these were the result of JD.com’s mission to go forward by scaling its technology in order to outsource its developments to third-party retailers around the world. Chen Zhang, Chief Technology Officer at JD.com says that making money is not their priority at this stage as he believes that:

“With Scalability, comes profit”

Taking the burgeoning amount of investment coming from China to the region into consideration, it’s only a matter of time for RaaS to kick off in Southeast Asia.

In Indonesia, JD.com has already started the concept on its unmanned store JD.ID X Mart. The store collected data that can be used to understand shopping behavior and optimize inventory, product displays, and other aspects of store management and marketing.

With JD.com’s joint-venture in Thailand, it’s fair to assume that the market will be the next destination for the innovation. And although Alibaba’s Lazada has been quiet on the front, looking at the fierce competition between the companies in the mainland, it seems like a matter of time until Alibaba does so.

Inside JD.ID X Mart in Indonesia. It is JD.com’s first unmanned store outside of China and it is a demonstration of JD.com’s mission to implement RaaS; Pandaily

With the ‘offline is the new online’ trend carried over to 2019, we can expect to see more traditional retailers offering their service and retail space to help online brands expanding their reach and getting more foot traffic in return.

A win-win strategy for the ever-changing landscape of retail.

With almost 4,300 store locations in 69 markets across the world, fast fashion retailer H&M is a quintessential example of a brand that constantly strives to provide high-quality products at affordable prices.

It’s come a long way since its humble origins.

The first store of what would eventually be known as H&M was opened by Swedish entrepreneur Erling Persson in 1947, after inspiration during a trip to New York. Initially, the store catered to womenswear alone; and was called Hennes, Swedish for ‘Hers’.’

The addition of menswear came after Hennes acquired Stockholm-based retailer Mauritz Widforss in 1968. Stores were rebranded as Hennes & Mauritz with international expansion to Denmark, Norway, U.K, and Switzerland starting the next year.

The acronym H&M was adopted as the firm’s official name after it went public in 1970.

Photo credit: Wikimedia

Unprecedented expansion

H&M has grown by an average of 20% year-on-year in revenue since the 1980s. Part of the reason for this ferocious germination has been its ability to unearth the latest trends and sense what its target consumers aspire for.

Like other fast fashion companies, the product pipeline is quickly replenished as its marketing and design teams work in unison to keep clothes, shoes, & accessories up to date.

But it’s not enough just to make products that people want to buy. Brand building involves striking a chord with your audience; a message that H&M has carefully crafted over time.

Its focus on sustainability as a major ethos for the brand has earned acclaim. Consumers can drop off unwanted garments (of any brand) to H&M stores globally, which will be recycled and used in future products.

H&M explains that the global ambition is to work towards a “sustainable fashion future”, where unwanted clothes are used for fresh textile fibers and ensure no garments wind up in landfills.

The drive towards sustainability, which has been embraced by everyone at the company – from the CEO to middle management – is an example of how the company has always sought to redefine itself (and save itself from a PR disaster). Much like its products, the global retailer has tried to avoid stasis and remain top of mind for shoppers.

It first introduced online shopping in 1998 when the concept was still nascent, and in the 2000s set on a spree of international expansion, which saw further store openings in Europe, the US, and East Asia.

But central to the strategy of top line growth was the constant addition of new stores. This entailed costs – locations for new outlets need to be scouted, linking the store to a centralized supply chain, hiring staff, and ensuring all brand guidelines are adhered to. Not only does it take time, it can also prevent a fast fashion brand like H&M from trimming prices as much as it would like.

Challenges lurk

Despite H&M’s original launch of its online store in 1998, analysts are unequivocal in their opinion that the company has been slow to adapt to the internet age.

“We view value fashion retailers as the clothing retail segment most disrupted by online,” explains Anne Critchlow, an analyst at Societe Generale.

Digital disruption has eaten into H&M’s business. Pure play fashion ecommerce sites like Asos, Zalando, Zappos, and even Amazon private label brands don’t have to contend with managing expensive offline inventory and retail space. It helps them keep prices low in an attempt to undercut retailers like H&M.

Asos recorded US$2.6 billion in sales last year – a fair distance behind H&M – but the brand operates with a fraction of the same overheads as the Swedish retailer.

Euromonitor International estimates that online channels account for 14% of the global apparel and footwear market, with an overall size of US$231.7 billion. In developed markets, this statistic is even higher: 15.5% for the US, 18.7% for the UK, and 25.9% for China.

H&M is physically present in 69 countries but only offers ecommerce in 43.

The primary target market for fast fashion brands are digitally savvy millennials, which begs the question, why have they been so slow to respond?

CEO of H&M, Karl-Johan Persson says the company has made mistakes in its strategy.

2017 was a disappointing year for the company with its share price sliding to the lowest level since the 2008 financial crisis and the announcement that it would close 170 stores in 2018.

But the company plans on a net addition of 220 stores, causing even further consternation from investors who want it to double down on ecommerce and trim expensive offline forays.

“Fast pace is vital,” affirmed Karl last year, signalling H&M’s intention to accelerate its efforts towards ecommerce.

H&M stock isn’t performing well at all.

But this needs to happen sooner rather than later.

“[H&M and Zara] have been lagging definitely and they do need things like just faster delivery times; shoppers want it now,” explains Maureen Hinton, global retail research director at GlobalData. “They face a tougher, more competitive market who have less to spend and far more competition with Zalando, Amazon, and others.”

What’s the future?

At the moment, H&M seems to be concentrating on markets with large growth potential. Its decision to open up new stores in India helped increase revenue in the country by almost 100% and resulted in 12 new outlets. The retailer is also selling online in India, hoping to capitalize on the ecommerce rush in the South Asian state.

But this seems to be a repetition of the old business model, which hasn’t exactly gone to plan. The writing’s on the wall. US retailers are in significant stress as they haven’t prepared for the digital age.

Millennials demand an omni-experience i.e. a consistent experience across both online and offline. Zara, has already picked up on this trend with its popup shop in London trying to bridge the gap, whereas H&M only realized it needed to integrate physical and online stores after a 2% drop in Q3 compared to last year’s figures.

The company is also relying on its presence on Alibaba’s Tmall to improve its online footprint in overseas markets.

It seems like H&M is finally aware of the fact that it needs to improve its overall purchasing experience. Nils Vinge, H&M’s head of investor relations, told LA Times that they’re deploying algorithms to support forecast demand and reduce the chance of markdowns.

But are these feeble attempts enough to survive in the hypercompetitive environment that fast fashion operates in today?

Part of the reason startups like Asos and Zappos have been able to snatch away market share is because millennials care more about the product, and less for brands. 51% have no preference between private label and national brands.

For H&M, it’s not enough anymore to sell relatively cheap products. The entire retail experience needs an overhaul and it better start doing that soon or the stock price might see a sustained nosedive.

One of the most attractive points of listing your brand’s products on Lazada is the ability to take part in its multitude of campaigns, accessed by thousands of customers.

Such campaigns aren’t limited in size and scope: they range from huge events like its heavily marketed Online Festival, which include 11.11 and 12.12, to smaller weekly campaigns such as the current ‘Fall In Love’ event for Valentines Day.

Not only does Southeast Asia’s largest ecommerce platform promote campaigns via large banner adverts on its main landing page, it drives traffic via paid acquisition channels and email marketing.

BrandIQ

Valentine’s Day campaigns this week include ‘Valentine Day Sale’ with Unilever in Indonesia, ‘Lazada Delivers Love’ in Philippines, and ‘Fall In Love’ in Thailand

For brands, such visibility is critical; Southeast Asian consumers increasingly use online marketplaces to begin their product journey, bypassing even search engines.

ecommerceIQ

A study by ecommerceIQ found that 57% of Indonesians start their product search on marketplaces.

Lazada promises significant internet traffic during its biggest campaigns – the 11.11 sales event attracted 10 million site visits in the first 24 hours and garnered 10 times the sales volume when compared to non campaign days.

While traffic is definitely attractive to brands, an analysis of campaign promotions by data analytics platform BrandIQ found that companies have limited control over the visibility of their products during such events.

Provided brand managers meet Lazada’s conditions of discount percentage and relevant categories, they can pitch as many SKUs as they like for campaigns such as ‘Flash Sales’ and ‘Daily Deals’. However, this only accounts for a small percentage of the ‘shelf space’ available on the Lazada campaign page with the majority of product placement within the campaign categories out of the brand manager’s control.

BrandIQ

The ‘Flash Sales’ portion of campaigns are among the few ways to boost sales of brand’s products.

Marketplace and Brand relationship

Brands shouldn’t take a hands-off role after agreeing to participate in a particular campaign. BrandIQ discovered that the maximum mileage garnered from these campaigns lean more towards promoting Lazada’s own inventory and not the brand’s official shop-in-shop (Amazon, anyone?).

Lazada holds inventory of major products, and sells it via a retail model. These campaigns offer a window for Lazada to boost sales of its own inventory.

How? BrandIQ deep dived into a current category campaign, ‘IT on Sale‘, running from February 6-9 on Lazada Thailand. The sale advertises ‘up to 70% off’ electronic category products.

BrandIQ

BrandIQ

Both the ‘Recommended Items’ and ‘Mobiles on Sale’ portions of the ‘IT on Sale’ campaign lists Lazada’s own retail SKUs over brand’s Shop in Shop SKUs.

The data indicated that the products listed under ‘Recommended Items’ were sold by Lazada. This is also the case in the sub-category ‘Mobiles on Sale’ portion – for example, all listed SKUs are sold directly by Lazada, rather than the Samsung or Huawei official stores.

Directly under ‘Recommended Items’ is another portion of the landing page titled ‘Top Brands on Sale’.

BrandIQ

Clicking on the brand’s logo takes customers to the brand’s official store, but where is the user directed after clicking the individual SKUs shown to the right of the brand logo?

BrandIQ

BrandIQ ascertained that 13 out of the 20 products listed were those sold directly by Lazada itself, rather than the official store.

This is despite the fact that official shop-in-shops offer the same product; it’s a conscious decision by Lazada to sell its own retail SKU over the brands.

Brands should pay close attention to the evolving nature of marketplaces and look to them as a way to jump into ecommerce, but not the long term game. As the ecommerce landscape becomes increasingly competitive and incentivized; companies need careful monitoring of all acquisition channels if they desire sustained growth.

 

As internet adoption grows at a double digit pace year on year in Southeast Asia – a 31 percent increase last year – retailers and brands must find ways to capture the wave of the some 80 million new consumers coming online.

Internet shopping has become one of the most robust areas of growth in the last few years, especially in markets like Indonesia and Thailand as both international and local ecommerce players pour money into winning the emerging digital customer in the region.

In such a fragmented market segmented varying in cultures and languages, there are a few common key threads to be noted about the region’s increasingly affluent shoppers:

  • Southeast Asia is mobile first. Mobile subscriptions have increased by 8% since last year, adding an additional 60 million users.
  • Southeast Asian’s are the most actively engaged with social media. Indonesia is sometimes referred to as “Twitter city” whereas Total Access Communication Pcl, estimates that Thais spend up to six hours a day on Facebook and Youtube – the 8th highest in the world.
  • Southeast Asia has low credit card penetration and a large unbanked population – 73 percent – due to a lack of financial maturity.
  • There is an overall low trust in anything ‘digital’ due to its novelty and user unfamiliarity.

So how do retailers, brand stores and marketplaces attract more consumers to shop on their websites?

One highly successful and proven method is to incentivize with large discounts, leading to the emergence of some of the region’s most infamous flash sales.

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GUEST POST BY: JEFFREY TOWSON

H&M and Zara are two companies I pay a lot of attention to in China.

  • They have great business models. Fast fashion is really impressive in general.
  • They are popular with Chinese consumers.
  • They are both following market leader Uniqlo in terms of expansion into second and third-tier cities.
  • They seem to be growing steadily, despite slowing growth in apparel overall.

Overall, both look like big winners in China going forward. But I think there are two potential threats emerging. More on this in a second. First a quick diversion.

I keep a list of questions that I think are both important but difficult. These are things I try to figure out over time. One of these questions is “will fast fashion work the same in China as elsewhere?”. As exemplified by Zara and H&M, fast fashion has been a stunningly powerful business model. It continues to expand in the Europe and US – and is now growing in emerging markets. But it’s still not clear to me how well it will do in China, where consumers are fickle, competitors are ferocious and mobile/ecommerce appears to be changing almost everything in retail.

My answer to this question, thus far, is that the Western fast fashion giants are well positioned for China and for rising Chinese consumers.

The Zara and H&M business model has been studied extensively. It relies on syncing consumer behavior in stores with centralized design/manufacturing capabilities. Zara is the more extreme case with manufacturing in-house and re-design and shipping done on almost a weekly basis based on customer purchases. H&M, in contrast, has most of its manufacturing outsourced to Asia.

This “quick reaction” apparel platform makes great sense in China. If >50% of a season’s merchandise is re-mixed and re-designed during the season, that enables you to change with rapidly changing Chinese consumers. In this, “quick reaction” has a strength (i.e., reacting in real time to changing tastes) where many other Chinese consumer-facing companies have a perpetual problem.

This operating model also enables them to push discount versions of the latest designs from the fashion capitals (Paris, Milan, etc.) to China stores in a couple of weeks. Having design centralized in Europe also probably helps these stores in China. It is a differentiating strength relative to both local Chinese competitors and to “slower fashion” houses like Gucci and Prada.

Overall, fast fashion still looks like a great approach for rising Chinese consumers.

One more quick aside

(skip to the below points if you’re reading quick).

One of the benefits of fast fashion is you can have multiple style waves instead of 2-3 fashion seasons per year. One result of this is that consumers tend to come in more often as there is frequently new stuff to see. This, in theory, gets you greater revenue (people come more and buy more). You also get a greater “share of the consumer mind” (a Warren Buffett term). Greater frequency of consumer activity generally creates a stronger brand and a better relationship.

Financially, these frequent style waves also show up as less discounting of goods (a perpetual problem in fashion retail), higher revenue, and better working capital. That’s the theory anyway. And H&M and Zara do produce tons of cash, which they can then put into more scale and more stores. It’s a powerful approach when compared to traditional department stores or luxury fashion houses.

That said, it’s not clear to me that you get these same benefits in China. In particular, I don’t know if you see the same increased visits and branding benefits. Cycle times are already pretty fast in China. Most of the textile/apparel production is actually done in China / Asia. And I’m not sure you have the same historical expectations for a seasons’ new merchandise to contrast with. So I’m not sure about the revenue and gross margins of this model in China. Gross margins are typically 60% elsewhere.

Ok. Back to my main point, that there are two threats to the big China dreams of these fast fashion giants.

Threat 1: Ecommerce, mobile, and O2O are happening fast in China – and these companies are not real fast at this stuff.

Retailers are pretty much ground zero for changes in Chinese e-commerce, mobile, and online-to-offline activity. Digital transformation is hitting this sector like just about no other (except maybe auto and transportation).

First, the rapid adoption of everything mobile in China is transforming the interface with consumers. It is no longer just about walking in the mall and then going into a nice store like it might happen in Sweden. The Chinese customer experience is already a combination of the mall, a store, your activities in various online ecosystems and a rapidly developing logistics/delivery network. The two words you hear over and over in Chinese retail are digital and delivery. How this offline-online mix is going to play out and what “new retail” is going to end up looking like is unclear. But Chinese retail is where it is happening really quickly.

Against this rapidly changing Chinese retail landscape, here are some disturbing facts. Zara didn’t have an online store until around 2010 (about a decade after the Gap). And H&M didn’t start online sales in the US until around 2012. They also didn’t open a shop on Tmall until 2014. These companies are notoriously slow in digital stuff.

Both Zara and H&M are awesome in inventory and logistics. That is their strength. They have a powerful supply chain that connects retail activity around the world with centralized design and manufacturing, almost in real time. But they have been pretty slow when it comes to ecommerce and mobile. And these are precisely the things that are happening quickly in China – and that their Chinese competitors are particularly good at.

Threat 2: The local Chinese competition is moving upmarket.

You also need to consider the recent actions of the Chinese apparel giants such as Peacebird, Heilan, and Septwolves. They operate about 10x more stores than the foreign companies. Zara, H&M, and Uniqlo have 200-500 stores each. Helian and Septwolves have 2,000-4,000 stores each.

These big local competitors have historically been cheaper but they are now upgrading and moving upmarket. They are going to increasingly challenge Uniqlo, Zara, and H&M, especially as they continue to expand into second and third-tier cities.

When you combine #1 and #2, things get really interesting. What happens when you combine rising Chinese competitors with big digital, mobile and ecommerce disruptions? Does that change the fast fashion business model that has been so powerful in so many countries? This is the question I have been thinking about.

Anyways, that said, both H&M and Zara do appear to be in great shape in China right now. They both continue to open tons of China stores each year. They have a nicely adaptable model that is well-suited to the continually changing preferences of Chinese consumers. And Chinese consumers keep getting wealthier and wealthier. So that is all pretty great.

These companies may well turn out to be unbeatable in China, just like in most other places. But I am keeping an eye on these two particular threats to their China plans. We’ll see.


The first version of this article was published here

THE BACKGROUND

It’s safe to say that Toys ‘R’ Us is one of the most popular places on earth for kids everywhere. With an endless variety of toys stacked in high racks, it is a heaven created for kids or kids-at-heart alike.

The toy retailer was born after founder Charles Lazarus came back from serving in the World War II and decided to build a baby furniture business during the baby-boom in 1948.

Lazarus started featuring assortments of toys in the store then named “Children’s Bargain Town” after receiving a high demand from parents and soon learned that unlike furniture, toys would keep customers coming back, either for an upgrade or a replacement.

Less than a decade later, he restructured his business to solely focus on toys and opened the first Toys ‘R’ Us store in 1957 — with the iconic backward R giving a childlike impression. To date, the company has 1,600 stores across 38 countries.

“What we are is a supermarket for toys. We don’t have a competitor in variety, there is none,” told Lazarus to the Washington Post.

Toys R Us bankruptcy ecommerce

Toys ‘R’ Us founder Charles Lazarus retired as CEO and president in 1994 while remain chairman. Source: Getty Images.

For decades, the US company was so unbeatable that it had become a classic example of a category killer — a business that successfully specializes in one sector that it pushes out competition from both smaller specialty stores and larger general retailers.

So what happened to the once-booming business that the company filed for bankruptcy earlier this week?

THE CHALLENGE

When news of the Chapter 11 filing (“reorganization” bankruptcy”) by the toy retailer broke, media was quick to blame Amazon and the rise of online retail as the reason of yet another traditional retailer struggling to stay in business, known commonly as the Amazon Effect.

But the real reason for the bankruptcy is more complicated than this and what set off “a dangerous game of dominoes” was actually accumulated debt.

Toys ‘R’ Us had managed to sustain a crushing debt for more than a decade after getting bought by KKR and Bain Capital in 2005. The private equities bought the retailer, which at that time was valued around $7.5 billion, for $6.6 billion that consists only of $1.4 billion in equity.

They then used the company’s assets to raise $5.3 billion in additional debt, creating a total debt of $6.2 billion — based on the assumption that they would be able to cut the retailer’s operating costs and sell under-utilized assets to raise cash and repay the debt.

But they failed to predict the retail shift to ecommerce, which created a completely different competitor from the ones Toys ‘R’ Us had been facing in the past such as Walmart or Target.

The assumption that retail real estate would increase in value also failed them as the US became saturated with retail space once businesses began shutting down.

The company barely had enough money to repay its $5 billion debt and fight traditional retailers, let alone build a major online presence to go up against Amazon.

Given its fragile situation and end year sales around the corner, the company was forced to file for bankruptcy protection in order to provide the vendors with cash in advance as nearly all of them refused to ship products to fill the retailer’s inventory for the holiday season.

THE STRATEGY

With the new protection, Toys ‘R’ Us received a commitment for over $3 billion to help address the financial constraints in a lasting and effective way, as stated by Toys ‘R’ Us CEO Dave Brandon in the courts filling.

“Together with our investors, our objective is to work with our debtholders and other creditors to restructure the $5 billion of long term debt on our balance sheet.”

The company doesn’t plan to close stores and its operation in location around the world will continue normal operations. Toys ‘R’ Us also plans to spend $64.8 million before 2022 to make it more enjoyable to shop in its stores.

“Toys ‘R’ Us stores will be interactive spaces with rooms to use for parties, live product demonstrations put on by trained employees, and the freedom for employees to remove products from boxes to let kids play with the latest toys,” explained Brandon.

The plan also includes the creation of augmented-reality video games that customers can play on their smartphones while shopping at the store.

Toys R Us bankruptcy ecommerce

The iconic Indoor Ferris Wheel in Toys ‘R’ Us’s Time Square store that was closed in 2015 because of its high rental cost.

The suppliers’ support for the reorganization plan for Toys ‘R’ Us is also key to dragging them out of bankruptcy.

“Vendors are why they are in, they will be a big part of why they get out,” said Bloomberg Intelligence analyst, Noel Hebert.

Some of the key vendors such as Hasbro and Matte have rallied support and stated they were standing by the company.

Earlier this year, the company also expressed its commitment to take action towards the lack of its online experience with a $100 million investment to revamp its website.

“Some organizations recognize faster than others there are shifts in the ways customers want to be communicated with and the way customers want to purchase products,” said Toys ‘R’ Us CEO David Brandon. “It probably took us awhile.”

Toys R Us bankruptcy ecommerce

The company’s current ecommerce website: www.toysrus.com

CEO Dave Brandon has said that the company will not engage in a “race to the bottom” of a discount war that is usually employed by online retailers in order to gain new customers.

Despite accusations of being slow to adapt to the online shift, Toys ‘R’ Us was, in fact, one of the first companies to sign a deal with Amazon in 2000 to sell toys exclusively through the online retailer.

The exclusive agreement marked the first “click-and-mortar” collaboration between traditional and online retailers but Amazon broke the deal and began allowing other toy sellers in its platform because Toys ‘R’ Us stock couldn’t keep up with the high demand.

Toys ‘R’ Us sued in 2004, and Amazon ended up having to pay $51 million out of the $93 million that the toy retailer asked for to settle the lawsuit five years later.

THE FUTURE

Despite the woes of the company in the US, its Asian operations remained unaffected.

In April this year, the company unified its Japanese business with the operations in Greater China and Southeast Asia — bringing together 223 subsidiaries stores across Asia and 34 licensed retail locations in Macau and the Philippines.

“Toys ‘R’ Us (Asia) is open for business and continuing to serve our customers as we always do. We are financially robust and self-funding retail operation, which continues to significantly grow and invest in this region,” said Toys ‘R’ Us Asia president, Andre Javes.

The company even plans to open another 22 store in China the coming weeks.

The journey that Toys ‘R’ Us facing will not be easy but the CEO remains optimistic.

“As the holiday season ramps up, our physical and web store are ones for business, and our team members around the world look forward to continuing to put huge smiles on children’s faces,” said Brandon.

Toys R Us bankruptcy ecommerce