Chinese Retailer Comes to U.S. Seeking Tech Talent

Discussion
Dec 04, 2013

Following on the heels of Walmart, Target, Kohl’s, Staples, QVC and others, Suning Commerce Group, China’s largest electronics retailer, last month opened a retail tech lab in Silicon Valley.

Already among China’s top three e-commerce players, Suning said its research center in Palo Alto will be the first in a series of planned R&D centers in cities throughout the U.S., with others already set for New York and Seattle. The objective is to advance Suning’s offline-to-online business model and bolster its back-office capabilities, which include Big Data, internet search, shopper analytics, cloud capabilities and internet banking.

At a grand opening ceremony for the California facility last month that included many local officials, Zhang Jindong, chairman of Suning, said the facility will also promote China-U.S. cooperation in science, technology and business.

"China is on pace to become the largest consumer market in the world," Mr. Zhang said in a statement. "Not only will Suning’s sustained, long-term investment in innovation and new retail technologies drive aggressive business growth, it will help transform China from the world’s factory into the world’s market place."

Suning has more than 1,600 chain stores covering over 600 cities in Mainland China, Hong Kong and Japan. The company employs 180,000 people and grosses $37.7 billion in annual sales.

With an initial investment of $5 million, Suning said it’s looking to hire 50 engineers and researchers at the Palo Alto center, growing eventually to 200.

A recent Associated Press story detailed how smartphones, social media and Amazon’s advances have accelerated the need for traditional brick & mortar retailers to open R&D labs around San Francisco.

"Consumers expect immediate gratification," Lori Schafer, executive adviser at SAS Institute, told AP.

What is your reaction to Suning’s plan to open tech labs in the U.S.? What will it mean for retailers and manufacturers based in the U.S.?

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8 Comments on "Chinese Retailer Comes to U.S. Seeking Tech Talent"

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Ed Dunn
Guest
3 years 9 months ago

My reaction is that New York, Miami, and a few other places have plenty of real-world opportunity and strong talent for retail technology innovation labs. I do not understand the obsession with Silicon Valley except for having a trendy address.

If I had to pick a strategic location for establishing a retail innovation lab that can attract retail experts with decades of experience and deploy field testing, it would be New York City, or near a major CPG location in Ohio, or near a big box HQ like Minnesota.

Ken Lonyai
BrainTrust

It’s great to see a bit of reversal here: Chinese retail “setting up shop” in our country to tap our competitive advantage.

At this point I don’t see any real impact on US businesses operating here. The amount of talent that Suning is recruiting is a drop in the bucket. US retailers still have plenty of tech people available if they choose to pay for them. And until Suning rolls out stores in the US in a significant number, they won’t be of concern. However, for US companies selling in China, the bigger, better, and more effective Suning gets, the more competitive they’ll have to be – something that’s true no matter where Suning taps talent and performs R&D.

I look forward to the New York R&D location.

Max Goldberg
BrainTrust

China has a history of successfully taking others’ products and ideas and adapting them to the Chinese market. Sometimes they do this legally; often they don’t. It makes sense that a large Chinese retailer would come to the U.S. looking for technological ideas. Unless Suning starts throwing obscene amounts of money at tech gurus, I don’t expect this to have much of an impact on U.S. retailers.

Bill Davis
Guest

Why not try to recruit tech talent from what is widely viewed as the leading tech center in the US/world? Demand for tech talent is higher than supply, and more competition means it will be harder to recruit top people.

That being said, with this budget — “With an initial investment of $5 million, Suning said it’s looking to hire 50 engineers and researchers at the Palo Alto center” —  Suning won’t be hiring 50 top engineers and researchers in Palo Alto, as tech talent costs more.

Peter Charness
BrainTrust

I’m sure this trend will completely reverse the US/China balance of trade issue…not. Interesting though that there seems a resurgence of demand for US IT talent particularly at the “early R&D” stage. GM is opening 4 new US-based tech centers with, I believe, 1,000 to 1,500 people each to bring that resource back in-house. (One here in sunny Phoenix, and NOT in Silicon Valley, btw.)

Too bad there was a big gap in college level interest in IT from students who figured that discipline was a dead-end path with most jobs headed offshore.

Now we will have trouble finding these on-shore resources for retail IT talent, as the competition for them will be from all industries, not just retail. A true supply and demand bullwhip effect working through the system.

Bill Bittner
Guest
Bill Bittner
3 years 9 months ago
There is a bigger perspective of the implementation of Chinese retail tech centers in Silicon Valley. I have always been intrigued by the various perspectives of our relationship with China. On one hand, its huge population of low wage earners has been great for manufacturers looking to reduce production costs. On a second hand, those same manufacturers have been looking at Chinese consumers as a great source of pent up demand, only if they earned enough to purchase the goods they were producing. And thirdly (no more hands), we regard China as a political adversary with whom we have many ideological differences and the potential for an adversarial outbreak. It is the third perspective that comes to mind with the Chinese retail tech centers. The whole idea of processing big data to obtain greater insight into a population’s retail purchasing characteristics seems a lot like using it to understand their political motivations. Doesn’t it seem a little ironic that at the same time US industries are saying we need to increase immigration to improve the US talent pool, China is exporting its tech research to use the resources of Silicon valley? Can’t the same cameras and image processing technology being… Read more »
James Tenser
BrainTrust

Remember back in 1999, when any moribund company could create an instant share price bump by simply announcing that it had adopted a “dot-com strategy”?

Well most retailer investment in tech labs feels very similar from my perspective. It’s certainly on-trend, but I’m skeptical about how much real innovation will be created when multiple chains assemble teams to work on more or less similar solutions.

In my view, the world has as little need for dozens of proprietary retailer mobile apps as it has for dozens of proprietary online shopping cart technologies. Sometimes it’s just better to deploy current best-of-breed tools.

For its part, Suning will be lucky to attract 20 qualified engineers for its $5 million at current S.V. rates, not 50. It will be interesting to see whether it reveals a meaningful vision behind this latest action.

Jonathan Marek
Guest

My reactions: first, thank goodness retailers around the world are taking tech seriously. The global retail winners and losers of the future will be determined by who applies technology in not the “coolest” but the most value-creating ways.

Second, as a Bay Area resident (and partisan), thank goodness the pace of innovation in Silicon Valley is still meriting opening these types of offices here. My parents grew up in Detroit at the height of the auto boom – when it was the Silicon Valley of the manufacturing age. We should never forget that it can all disappear without continued hard work, innovation, and constant productivity improvement.

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