Second, Tencent is taking a milder approach to Smart Retail/New Retail. Its top and senior executives, including chairman Pony Ma, have openly reiterated that Tencent is not keen to open its own physical shops. Rather, they aim to enable digital versions of existing physical stores and improve customer experience by upgrading technological capabilities via partnerships.

"We don't do retail, not even any e-commerce, but we only serve as a utility provider, offering an IT ecosystem for retailers ... and giving opportunities to all partners," Pony Ma said.

Tencent tiptoed into the retail realm four years ago, mainly taking on two major strategic plays. One features deals that involve no equity stakes. For example, it supported a "magic mirror" system for Danish apparel brand Bestseller S/A, allowing customers to view themselves in the clothes they pick, and automatically swap clothes with other recommendations, and accepting facial recognition-based payment via WeChat.

Shoppers collect lipsticks, ordered from a cross-border e-commerce platform, at a shop in Zhengzhou, Henan province. [Photo provided to China Daily]

In March, Tencent did a bit of tech muscle flexing by pioneering unmanned convenience stores in Shanghai. It also heralded cashierless retail through vending machine solutions like EasyGo, Miss Fresh and CityBox.

In this new format, a customer walks in, grabs an item, and leaves the store. A storefront scanner, meanwhile, reads information in a chip embedded in the product tag, and sends the bill to a mini program in the customer's WeChat app.

While Tencent hasn't picked up stakes in any of these partners, consumers must first authorize WeChat to access relevant personal information and are advised to follow the brands' official account, a newsfeed service embedded in WeChat. This is a route commonly adopted by digital-based companies.

"Data is the most important element in redefining retail," said ICBC's Wu. "With big data, multi-dimensional digital marketing can help increase the monetization rate of advertisements as well as the conversion rate of the online and offline merchants with the platforms."

From late last year, Tencent stepped on the gas pedal through deeper penetration into retail. It purchased a stake in Super Species, the New Retail unit of Yonghui Supermarkets. It then invested an undisclosed sum in French supermarket chain Carrefour SA, and purchased stakes in Dalian Wanda Group, which owns commercial properties, malls and hotels around China.

In the Le Marche store, which Carrefour and Tencent co-developed and opened in May in Shanghai, all items sold in the store bear a distinctive barcode, that customers can scan to buy using WeChat.

In addition to internet players, traditional malls are stepping up efforts to merge their offline and online resources.

Since last year, Chinese conglomerate Wanda Group has joined hands with card processor China UnionPay, where all Wanda partner merchants will co-develop a Union-Pay cardholder service system, mobile apps and marketing campaigns that serve shoppers across all Wanda properties.

New Retail is the result of efforts to find solutions to a key set of problems for each side, said Mintel's Crabbe. "For the physical store chains, they have been unable to keep up with the growth of online retail. For the online operators, they have struggled to keep delivery infrastructure capacity up with the rapid growth in online shopping demand."

New Retail means more connection and integration－not just for retailers, but also for consumers, manufacturers and other industry players, said Vishal Bali, managing director of Nielsen China.