To glimpse the future of retail, look no further than China’s east coast megapolis, Shanghai.

And the experience wouldn’t be complete without a sojourn to the Fung Group’s Explorium – once a member’s only shopping club, now a start-up incubator and retail experimentation lab.

On 26 June, Explorium will open its doors to corporate innovators from around the world as the location for Innov8rs Shanghai.

Paul Wong (VP Innovation for Explorium Shanghai), and Mikkel Hansen (Program & Partnership Lead, Explorium Hong Kong) share what’s in store when it comes to the conference, and the kinds of experiments happening within the Explorium complex.

What can we learn from this incubator, which has created its very own new retail ecosystem? How can we understand and harness the sheer scale and growth trajectory of start-ups who use Explorium as a springboard to success?

Co-creating the supply chain of the future

Explorium began life not by converging on the entire physical-to-digital retail space, but by solving a specific problem:

‘We knew that physical retail would not die, but that certain experiences would evolve and take on a new shape – not in relation to retail itself, but to logistics and the use of the software.

We didn’t really have an answer about how this would manifest; so we set up a lab to help find out. That’s how Explorium was born.

We didn’t just want to innovate for innovation’s sake: instead, we had a clear entry point into the retail landscape based on Fung’s expertise in supply chain management. As the eyes and ears for SCM in the start-up ecosystem, we started running design thinking programs for companies to create greater logistical efficiencies.’

From supply-chain outwards, Explorium now promotes collaborations between entrepreneurial innovators and technology start-ups – plugging into different ecosystems, depending on the context.

This could be helping retail brands with eCommerce fulfillment, to transpose their operational model from its success story in China, across other Asian markets.

Or it could be providing a playground for Proofs of Concept in consumer engagement – from completing transactions with QR codes in brands stores, to introducing kids and parents to new toys in a try-and-buy environment, to conducting shopper sentiment analyses through pop-ups set up at Explorium itself, run by a few dozen international and in-house brands.

‘It’s a digitized factory, with a number of outlets’, describes Paul.

‘In Explorium 1.0, our initial platform which has now evolved into an innovation hub, we hosted a distribution center where customers could place an order by scanning QR codes on the hangtags through our app whilst shopping in stores, and shoppers could either pick up their items at the end of their shop, or have the order delivered straight to their home.’

Paul and Mikkel describe a three-pronged approach in terms of how they catalyze local business communities and foster innovation tourism.

Mapping: communities & ecosystems

‘We’re not a tech company, so with Explorium 2.0, we run 6-month programs on how to build retail business models from pilot to go-live, then bringing them to scale. We set milestones in terms of how many meaningful conversations and connections we’re creating between our retail clients and the start-ups we incubate: who is talking to who? What kinds of relationships are we enabling? Which skills and knowledge are being shared?’

On differing ecosystems, Mikkel mentions the difference in scale and approach across Shanghai and Hong Kong:

‘In Hong Kong, we still operate on the basis of Fung Group’s stellar reputation for supply chain management, using this as a platform of trust from which we can diversify and further connect. That is nothing different. But the scale is smaller in Hong Kong; Shanghai has more start-ups, different local business culture, and climate. It’s important to be respectful of the environment when you land in a new ecosystem.’

Learning: from one another

In 2015, Explorium 1.0 opened to around 40,000 members, mostly comprising the Fung group’s employees, their relatives and friends, and the Shanghai public who could enjoy a range of new offerings from international brands piloting new products, or heavily discounted off-season fashion.

In a fascinating transaction of ideas, interactions, and behaviors, the main currency exchanging hands is customer data: who are these people, and what do they buy? How are they buying it?

This was an interconnected web of services letting brands observe in real-time how customers interact with new technologies, products, environments, and journeys.

This mock-mall was perhaps the perfect basis to use as an innovation hub for start-ups – Explorium 2.0, which launched in 2017. From here, tech entrepreneurs, retail giants and customer-centricity evangelists can cross-pollinate learnings, experiment with new applications, and refine their work together.

Doing: Collaborating with external innovators

It is on this basis that Explorium brings the outside in, to maintain a living, breathing organism of new ideas and groundbreaking technologies.

‘We are very active in the corporate innovation community, and this is in no small part due to government KPIs which help to enrich our space for blossoming entrepreneurs, and give them a greater platform for growth.

We know that there is a world in retail beyond the supply chain – and so we invite speakers, specialists and start-ups to lead our events on topics such as emerging technologies and trends’, describes Mikkel.

Explorium is just one shining example of customer-centric ecosystems and collaborative labs being set-up throughout Shanghai, in a city-wide effort to spearhead China’s corporate innovation agenda via network effects.

Excited to see Explorium’s innovation hub in real life? The last seats for Innov8rs Shanghai are now on sale– act fast!