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The first thing that comes to a consumer’s mind when asked about virtual reality (VR) often involves gaming.

Why? Because virtual reality is used to describe a three-dimensional, computer-generated environment that can be explored by a person. That person is immersed in a space where they are able to manipulate objects or perform a series of actions.

The virtual reality technology buzz, whether in content or hardware, is projected to be worth $80 billion by 2025 globally, while gaming unsurprisingly will make up the largest share of an estimated value of $11.6 billion.

But the application of virtual reality is not limited to only video games. According to Jirayod Theppipit, CEO and Founder of Infofed, a VR content development startup, virtual reality can be used as a marketing strategy in almost every area.

“Dare we say that virtual reality is the future of content? The experience VR offers can solve the pain points of businesses in almost every industry.”

“People often associate virtual reality with gaming and we can’t blame them. Consumers in the gaming segment have the ability to afford new technology and gadgets,” continues Jirayod. “This is why they’ve adopted virtual reality before others.”

Instead of scrambling to compete in an already crowded gaming market overtaken by virtual reality gaming content creators like VRX, Infofed sees a blue ocean in real estate for virtual reality content in Thailand.

“I know this technology is going to take off because big players like Facebook and Google have already jumped into it.”

Two years ago, Facebook invested $2 billion into VR technology to promote its own VR headset Oculus and only earlier this year, Apple launched ‘ARKit’ to turn its iPhones and iPads into AR/VR (Augmented Reality/Virtual Reality) devices.

IKEA has already jumped on board with its new app, IKEA Place.

IKEA ecommerce

The highly affluential Chinese shoppers have also taken a liking to VR based on a survey by Worldpay, which has been a strong indicator of how content will be consumed in the future.

Phil Pomford, General Manager for Asia Pacific at Worldpay, says,

“China is blazing a trail for VR/AR adoption and showing other Asia Pacific markets what the future could look like…with China leading the way, Asian businesses should start investigating the future of VR/AR technology now, so that they’re ready to meet consumer demands as and when they arise.”

84% of 16,000 consumers surveyed across Asia Pacific believe that AR/VR is the future of shopping, 92% say they’d like to see more retail apps make use of AR/VR – Worldpay.

But for a nascent market like Thailand, can virtual reality successfully take off?

Infofed believes it already has.

ecommerceIQ speaks with Jirayod to understand how the two-year old startup has utilized VR in industries like tourism and education and what it has learned from its latest project, real estate.

Giving a slow-moving industry an upgrade

The current real estate industry in Thailand is experiencing slowing growth but the number of new condominium units are set to rise 15% from 2016.

To sell units, typical marketing tools often include flashy brochures with heavily photoshopped photos and miniature models in an attempt to give homebuyers a glimpse of the expensive home they should buy.

Higher-end real-estate developers will also set up a physical showroom for visitors to experience the ambience of the unit, but this requires travel and more effort than today’s digitalized world is used to.

Virtual Reality Infofed

The Deck, project by Sansiri. Source: Sansiri

“Because my background is in architecture, I can understand the blueprints and engineering language that the marketing material contains but there are many people who are confused by it. The current content in brochures and on websites aren’t extremely helpful for consumers who want to properly ‘experience’ the product.”

Through VR content, Infofed believes that its content can help developers market its products to consumers. What better way for someone to experience their new home than to actually walk through it?

The company has already worked together with Nirvana Property, one of the leading developers in Thailand, to showcase its showroom through virtual reality content.

 

Virtual Reality Infofed

Virtual reality Showroom for Nirvana Rama 2 by Infofed

Consumers are able to view the showroom in 360 degrees, simply through their electronic devices without the need of a virtual reality headset.

According to Jirayod, consumers on average spend up to five minutes viewing a VR showroom whereas they spend no more than two minutes flipping through a brochure.

“The longer consumers spend on our content, the more interest they develop in the product and reflects on a higher rate of purchase.”

The appeal of VR can also save real estate companies money to build and dismantle their showrooms – especially in trade shows and exhibitions. From Jirayod’s past architectural experience, building a showroom has an average cost of $60K for condominiums and $200K for houses.

Creating VR content, on the other hand, can start as low as $1,500 at Infofed according to Jirayod.

New age but in demand

Despite North America being the current leader in VR content market with a share of 73.4% in 2016, Asia Pacific is forecasted to exhibit higher growth.

Transparency Market Research has forecasted that this region will see an exponential CAGR of 116.1% between 2016 and 2024.

Virtual Reality Infofed

But in order to capture the opportunity VR presents, Infofed is committed to educating Thai consumers about new technology and training the people necessary to create VR content. One way it has done so is by creating content for influential industry players like the Tourism Authority of Thailand and leading real estate companies.

“It’s important that we help create build an ecosystem for virtual reality content. I have never viewed other virtual reality players as competitors but instead as partners to together push this technology out.”

Infofed has also brought in experts from the US through partnerships to equip its local staff with sufficient virtual reality knowledge to produce content. It’s also sharing its own experiences at top universities to educate the incoming digital-savvy workforce.

Virtual Reality Infofed

Infofed Team

All of the company’s efforts come down to one goal – to make Thailand a virtual reality society, even if it’s not fully ready now.

THE BACKGROUND

Chinese brand Huawei started as a producer of phone switches in 1987 before becoming the Information and Communications Technology (ICT) giant it is today.

The company builds products along the entire wireless communications chain: chipsets, network connectors, and handsets.

As Fortune puts it, “it’s as if General Motors had paved the Interstate Highway System, then started selling cars.”

Huawei recorded more than $42 billion in revenue for the first half of 2017 across its three main business units: Carrier, Enterprise, and Consumer Business.

Under its Consumer Business division, Huawei entered the smartphone market in 2010 and quickly rose to No. 1 in homeland China until Oppo took the title in 2016.

Nonetheless, the brand shipped 139 million smartphones in 2016 and controls 9.8% of global smartphone market share and around the world, the brand trails only behind Samsung and Apple as the No. 3 mobile phone vendor.

huawei premium strategy

Global market share by phone vendor, 2016. Source: IDC

THE CHALLENGE

Huawei’s rise to the top three was achieved in a very short time — less than five years – but the brand is struggling to catch up to its biggest rivals, especially in overseas markets.

Despite being a household name in China, the brand isn’t well known in Europe and the US.

A few issues have plagued the brand’s reputation: a general consensus that Chinese companies produce ‘cheap and copycat products, allegations of national cybersecurity breaching, and a investigation from the US government.

These issues have hampered the brand’s efforts to gain footing in the world’s biggest premium consumer market — the United States.

Huawei’s US sales totaled $1.3 billion last year, only a fraction of its worldwide sales of $32.4 billion.

In addition, the company has also faced difficulties winning emerging markets like India and Indonesia as most consumers favored devices below Huawei’s price tag where its budget phone handsets start from $170.

The company does not have the equivalent of Apple’s die hard fans nor Samsung’s superior phone features – they have “better value for money” as its differentiator.  

Without a customer niche, Huawei will find it difficult to boost sales and stay competitive. Although revenue growth was impressive in the first half of this year, it was the company’s slowest in four years.  

THE INNOVATION

In October 2014, Huawei launched a new brand of mobile phones that they called Honor and was sold direct to consumer through online channels to keep prices in the mid-range and targeted digital natives – young hipsters.

Huawei premium strategy

Huawei’s Honor flagship store in Germany

Launching a sub-brand is also a part the company’s efforts to emphasize the brand’s focus on quality.

The company also spent a large portion of its marketing budget on overseas promotion, including plastering major cities in Europe with advertisements.

Huawei premium strategy

Billboard of Huawei phone in Poland. Credit: Wade Shepard

To further familiarize Europeans with its brand, Huawei drew on the popularity of major sports clubs like Arsenal and AC Milan and reached the masses with several sponsorships.

Huawei premium strategy

The brand became the official sponsor of English football Arsenal to raise its brand awareness.

In 2016, Huawei struck a partnership with German-company Leica to develop a dual-lens camera system that resulted in the Huawei P9 smartphone, touting an innovative camera as one of its selling points. Apple rolled out the same feature shortly after.

Andreas Kaufman, Chairman of the Supervisory Board of Leica Camera, saw the potential to become the second leg of digital revolution in the photography space where smartphones were the new amateur camera.

Huawei was also chosen by Google to build its flagship Android device Nexus in 2015. The partnership is strategically important for both companies as they are leveraging one another’s credentials for a leg up in an oligopoly market.

To crack the US market and simultaneously beat Apple for market share, Huawei is collaborating with Amazon and Google in the launch of its updated premium flagship device, the Mate.

The device is the first of Huawei’s smartphone to come with voice-interactive app, Amazon Alexa, and is available for purchase in US through Amazon. The Mate 9 is also the first Google Daydream-ready device for users to explore immersive virtual reality (VR) content and experience.

With so many enticing features jam-packed into one device, the soon-to-be launch Huawei Mate 10 is expected to surpass the performance of Apple’s highly anticipated iPhone 8.

THE STRATEGY

A few years ago, Red Zhengfei, founder of Huawei, laid out the company’s strategy: Huawei must make progress in the mid and high-end range with high quality products and turn a profit.

In order to do this, the Chinese company has continued to sacrifice margins to spend on R&D, investing $11 billion (76.4 billion yuan) to further its business.

Huawei further announced that it will focus on the mid-high segment for higher profits.

“We are giving up the very low-end devices because of the margin in this is extremely low, and it’s not making enough profit for us,” said Richard Yu, CEO of Huawei Consumer Business Group.

Huawei premium strategy

CEO of Huawei’s Consumer Business Group, Richard Yu

“The priority is Europe, China, and Japan, where the economy is healthy and people are able to consume them.”

THE FUTURE

The company continues to works towards becoming the No. 1 smartphone supplier in the world within four or five years and seizing  20%-25% global market share by introducing visionary innovation to its products in order to charge a premium.

“In the past for the smartphone you could see Apple leading innovation,” said Richard Yu. “But in the future, you will see innovation led not by them but by Huawei.”

Easing into your Tuesday? Check out today’s ecommerce headlines here.

 

1. Alibaba Group aims to re-define retail through VR on 11.11

Shoppers will be able to use virtual reality to buy, as Alibaba pilots Buy+, billed as the world’s first complete virtual reality (VR) shopping experience. Those who use it will be virtually transported to select retail stores internationally.

Read the rest of the story here.

 

2. Walmart makes another big investment in China 

Walmart has made a $50 million investment in Chinese online grocery and delivery company. With the New Dada investment, Walmart can utilize New Dada’s network to offer customers two-hour delivery on groceries ordered from Walmart stores through the JD Daojia Dada app.

Read the rest of the story here.

 

3. Retailers gets boost with halal e-market

With nearly 60 merchants on board, including 55 SMEs, the launch of Aladdin Street gels with the Government’s push for retail firms to use e-commerce to reach out to more customers.

The platform, which will eventually have offices in 30 countries, aims to promote halal products as a healthy, premium option even for non-Muslims. Aladdin Group, the company behind the marketplaces  is headquartered in Kuala Lumpur.

Read the rest of the story here.

Since Pokémon Go’s surge in popularity in the US following the app’s launch this month, many retailers are now looking to seize marketing opportunities while the app is still trending, reports Reuters.

The app looks like it may be set to challenge young internet companies that specialize in increasing foot traffic for small businesses, and may play a role in major brand marketing.

The game, which requires players to walk around real-life neighborhoods to hunt for virtual Pokémon characters on their smartphones, has more than 65 million users in the US after launching in the first week.

The game is already playing a part in boosting foot traffic for restaurants, coffee shops and small retailers.

A pizza bar in Long Island City in New York claims that its sales jumped 75% over the weekend, by activating a lure model feature that attracts virtual Pokémon characters to the store.

The store manager only paid $10 to have a dozen Pokémon characters placed at the location.

This level of instant effect could become a potential threat for companies like Living Social Inc. and Foursquare, and other companies which have revolutionized online marketing for smaller businesses.

People born in the 1980s and 90s  grew up with Pokémon. It’s approachable and reassuring and that’s why it’s gone from zero to millions of users in just a few days.

The app has a chance to disrupt others as there has not been a geo-location social platform that can lure in so many people at once. With Pokémon Go, it is bypassing a lot of the digital marketing channels that brick and mortar shops have been relying on for the past few years.

Pokémon Go users are spending more time in virtual reality than on Facebook, Instagram and Snapchat, according to SimilarWeb.

The thing with overnight hype is that it can eventually fizzle out. Retailers should capitalize the Pokémon Go trend before it becomes a phase that nostalgic adults claim they played for a month or so.

A version of this appeared in Reuters on July 13. Read the full version here.

For some store merchants in the US, the new viral game Pokémon Go has literally driven people into stores purely to catch Pikachu or other characters.

The app’s ability to drive real-world foot traffic to certain locations is undeniable, something the majority of advertisements or even online stores cannot do. Some businesses in the US are leveraging a Poké presence to drive offline sales reports TechCrunch.

Pokemon Go

How does it work?

PokéStops and Pokémon Gyms are real-world locations that players visit to acquire collectibles pulled from the location database of Niantic’s original location-based AR game, Ingress. Locations are generated through user submissions, which means that anyone in the user community can apply to be added to the public database, after being vetted by Niantic. Brandon Badger, Niantic Product Manager, comments,

We hope to end up with a model where there could be a cost per-visit type model where large brands and small brands sponsor different elements of the game.

Business savvy store owners are using ‘lures’, an in-game item that turns any existing PokéStops into virtual feeding frenzy for players trying to catch Pokémon. However, this requires a PokéStop to be nearby so businesses are already looking to get Niantic to add one near their locations. As Nintendo has a history of striking offline partnerships, some people are already speculating that McDonalds, or a brand of that scale, would pay to have all their branches turned into Pokémon locations in order to draw in offline traffic.

When Pokémon Go finally comes to Southeast Asia, there will be opportunities for brands to leverage from, or drive offline consumer engagement using online locations. This trend is a chance for stores to convert online viewers into offline visitors.

Pokémon Go really is out to catch them all.

A version of this appeared in Tech Crunch on July 12. Read the full version here.

The ecommerce giant’s 400 million customers will soon be able to buy products from stores all over the world, by wearing a VR helmet or glasses designed to simulate being in a physical store.

Alibaba says it plans to launch a demonstration VR store by the end of this month and could launch a large-scale rollout by the end of this year.

Shoppers can rotate products they see in the virtual store by moving the controller that connects to the Vive helmet and even ask for a model to show how the product works or is worn. Users can also use the controller to click the buy button to purchase the item in the digital store.

“VR is a great way to demonstrate products or services, especially for some categories, like furniture and travel products.” Zhuang Zhuoran, senior director of mobile at Alibaba, said at the briefing. “It also adds more fun to shopping.”

Alibaba has set up a facility, its Gnome Magic Lab, in March, to develop software that would enable merchants to build virtual stores more easily.

A shopper who wants to test the virtual reality will need VR gear, which ranges in price from $20 to $1,000. VR products are hot at the moment, with consumers buying 300,000 units of VR gear on Alibaba’s Chinese online marketplaces each month, Alibaba says.

Alibaba also has invested in VR technology startups. For example, earlier this year Alibaba led the $794 million funding round for US-based startup Magic Leap Inc.

A version of this appeared in Internet Retailer on July 9. Read the full article here