Who Needs Wal-Mart or Amazon Anymore?

READ THE WSJ COLUMN HERE

I've seen the future of retailing, and it is odd, exhilarating, and terrifying.

It's a phone call late in the evening from a customer-service representative in China. It's a package that takes just four days to arrive from Suzhou, just west of Shanghai. It's an online catalog stuffed with 700,000 items -- shapeshifting into 27 different languages from Bahasa to Turkish.

This is the world of a company called LightInTheBox, a publicly-traded Beijing-based ecommerce company. While it loses money quite prodigiously, it's doing some pretty notable things, namely putting a competent, professional consumer interface for selling goods directly from China.

When you think about it, both Wal-Mart and Amazon have been that interface for the last decades. But why must that persist?

Why can't Chinese companies themselves take on that role, using Web technology, modern shipping routes, and smartphones to reach directly to consumers in the U.S. and around the world?

These companies still have a long way to go, as I detail in the column linked here:

But this is going to happen, via small players like LightInTheBox and much bigger ones such as Alibaba, whose market cap is just below that of Wal-Mart. It's going to happen with U.S. companies selling into China (although that's a much harder proposition) and even with companies in strange places -- with strange missions -- that haven't even been conceived yet.

Just listen to what the LightIntheBox CFO Robin Lu told me in an interview:

"We are very close to the manufacturers. Any individual consumer, from anywhere in the world, if they order something through our website, they can pick it out from the manufacturer, which means the consumer is more flexible than purchasing from Wal-Mart. You can buy anything you want."

Here are three last things to think about:

1) Brand names still matter. I ordered a jacket from LightInTheBox and it carried what was arguably a "brand name." But it was a fiction, meaning nothing to me nor anyone else. If Chinese companies want to be more directly competitive with other Western brands, they will have to purchase or create brands. My hunch says it's only a matter of time until they buy a big licensing-holding company for just such a play.

2) U.S. companies can use much of this same technology. They just have to get more creative. The most impressive thing I discovered about LightInTheBox is that the company uses the Web to recruit and trains customer-service reps in each of the 27 languages in which it operates. In other words, it likely has Turkish speakers, in Turkey, handling customer queries for a Chinese website, shipping goods to Turkish speakers in Germany.

3) Sales tax abritrage. This is something people don't think about, but these foreign sales don't collect U.S. sales tax. That's a built-in advantage that I suspect will one day become an issue for the U.S. Congress. It's early yet, but keep your eye on it.

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(Image credit: Rob Stinnett/Flickr)