Cegid launches new retail data centre in China!

Complying with data regulations in China

Like so many countries around the world, China is constantly reinforcing its rules and regulations regarding data protection, handling and storage. The Chinese government introduced the Cybersecurity Law at the start of June 2017. The law was created to provide guidelines for maintaining network security, data protection for consumers and organisations, and promoting the secure development of technology. The Cybersecurity Law regulates (among others) whether and under what circumstances personal and important data can be transferred out of mainland China.

Since the Cybersecurity Law was introduced, China has piloted new laws and regulations, setting out even stricter requirements, including cloud infrastructure in China.

Whilst the onus is on protecting the personal information of individuals, for many international companies and western retailers operating in the region, it represents a complicated process following all the legislative text and complying with regulations regarding data residency, storage and transfer of data outside the territory.

Retail Expertise in the cloud

Cegid already has a considerable amount of expertise and experience in this area.

To extend its cloud offer globally and make Cegid Retail solution more widely available in SaaS mode, Cegid signed a worldwide partnership with the Microsoft Azure platform three years ago.

This alliance led to the setup of Cegid’s first data centre, located in Ireland, which has helped many retailers in Europe adhere to General Data Protection Regulations (GDPR) guidelines. A second data centre was then opened in the United States, followed by another in Singapore and just recently the new POD in China, developed in collaboration with the 21 Vianet Group.

Adapting to the Chinese retail market

Three major characteristics define the Chinese retail market:

• Firstly, most retailers in China don’t use their own brand’s websites for ecommerce sales, but instead use them as digital windows and get most of their online sales via marketplaces like Tmall (part of e-commerce giant Alibaba) or JD.com, and increasingly through social commerce via Wechat’s mini programs.
• Secondly, digital or online to offline counts for a lot more in China, where most customers are driven to stores mainly thanks to their digital/online presence.
• Contactless payments are widely used in China. Also, 50% of payments for shopping are made via mobile and the online services Alipay (Alibaba) and Wechat Payment, rising to 70% in large cities.

A market that’s full of promise

The question is no longer why, but how. China offers so much potential for sales and growth among international brands, with many successful retailers having already established themselves there: for instance, Etam, Longchamp and L’Occitane, alongside LVMH Group and SMCP (Sandro, Maje and Claudie Pierlot).

For a start, the country represents around 1.4 billion people – more than all of Europe combined. Its shoppers are also very fond of Western – international brands.

“China has become the biggest fashion market, where sales jumped 8% in 2020,” says Chiono.

Even the Covid pandemic has had a positive uplift on sales in the country by forcing customers to buy more luxury goods closer to home, instead of travelling abroad. So, having Cegid’s POD in China allows the big names in retailing to make the most of the opportunities without having to wrangle so much with the legislative framework.