Throwing a Light on the Rainbow Model: Opening Stores Intelligently

At 10:30 in the morning on a Saturday, the Rainbow Shopping Mall in Shenzhen's Bao'an District is bustling with shoppers. A young office worker enters the sp@ce 3.0 supermarket and quickly finds the yogurt and oat crisps she's looking for with the help of an AI shopping assistant. She opens the Rainbow app to scan the product QR codes, identifies the items, and pays. With self-service checkout, she skips the queue at the cashier and exits after verification. Then, she goes to the department store, chooses a pair of sneakers, pays, and uses the AI-powered receipt scanning for loyalty points feature in the Rainbow app to snap a photo of the receipt. With AI assistance, the system completes loyalty point verification and credits her account within two seconds. As she pulls out of the parking lot, she enjoys a parking fee discount using the loyalty points that have just been credited.

The Rainbow Shopping Mall's smart retail features allow it to function smoothly and efficiently while offering ease of use to each shopper. The supermarket's fruit section is about to launch weekend promotions on popular items like Xinjiang plums and Mengyin peaches. Using the electronic shelf label (ESL) management system, the store manager can update the promotional prices on the shelves in an instant. Price updates are now always this fast and effortless.

In the smart warehouse for Rainbow home delivery, a dozen staff members use an order picking mobile app to find products and check stock levels. This has cut the average order picking time from over 30 minutes per order to just eight. The big screen of the data dashboard shows live updates on sales across platforms and regions, logistics transportation, product rankings, and customer feedback. The store manager uses this overview to keep track of busy weekend operations.

This is a typical weekend at Rainbow, a showcase of the digital transformation of retail.

Rainbow has been exploring digital transformation for over a decade and has made breakthroughs in customer experience, operational streamlining, and supply chain management. The company has been setting industry benchmarks with its store digitization, retail digital platforms, and group-wide upgrades. Rainbow powers its smart transformation with a dynamic duo of a premium network and an AI model, achieving unprecedented efficiency.

The sp@ce 3.0 supermarket at Rainbow Shopping Mall in Bao'an, Shenzhen

New Store Opening: From a 30-Day Marathon to Quick and Effortless Deployment

A new store opening is a test for retailers. Network deployment alone can be a major challenge.

A seasoned regional store manager shared his tricks of the trade: "Before every grand opening, I meticulously craft backup plans: deploying emergency Wi-Fi for unexpected network delays, ensuring paper receipts are ready in the event of a system crash, and even keeping track of inventory manually with Excel spreadsheets."

Conventional network deployment struggles to keep pace as stores undergo digital transformation. Network launches require skilled engineers to manually configure virtual private network (VPN) tunnels and optimize routing policies on the spot — a lengthy process that takes days per store. For businesses launching multiple stores simultaneously, deployment can drag on for months. Conventional network deployment also leaves resources underutilized. Bandwidth utilization is usually less than 60%.

The amount of time and labor needed for network deployment hinders business expansion for retail chain companies. Rainbow addresses this issue with Huawei's SD-WAN networking solution, which uses the zero-configuration technology to enable rapid network deployment of multiple stores and increase bandwidth utilization to 90%.

Huawei's iMaster NCE-Campus solution enables network setups for new stores in just 10 minutes through an email-based deployment process.

"Before, commissioning devices at a new store would take several hours for the IT team. Now, network deployment is a seamless process," said a company insider. "We can complete the process swiftly even with simultaneous store openings."

Customer Order Fulfillment: Omni-Channel Operations

Fulfilling online and offline orders after network deployment can be a challenge when there is a large influx of customers across different sales channels. Business systems need to be able to process orders during heavy traffic in peak periods.

Despite these network challenges, Rainbow has managed to integrate its sales channels into a unified system of omni-channel operations. It links its online and offline channels by centering on its physical stores.

During weekends and holidays, stores often experience overwhelming foot traffic, with some shopping centers exceeding 100,000 visitors in a single day. Network congestion during these peak times is a major issue. Any delays in the cash register system can impact customer experience and lead to customer loss.

For logistics transportation, real-time communication between the headquarters' logistics system and loading personnel is needed to ensure punctual departure of freight vehicles. Especially during peak periods, communication failure can result in idle vehicles waiting for departure instructions, which significantly reduces efficiency.

Warehouse inventory checks during peak periods need to be efficient and accurate to ensure operational stability. Online and mobile sorting and stocktaking technologies have become the norm, which makes network quality a major factor in the efficiency of warehouse inventory checks.

As a major chain with over 130 branch sites, Rainbow requires a highly reliable and low-latency network highway to ensure uninterrupted services across all channels during peak order periods.

Huawei has paved the way for Rainbow by using intelligent uplink selection and dynamic optimization of multiple links to allocate network resources efficiently.

For mission-critical applications like cash registers, the system prioritizes the deployment of dedicated multi-service transport platform (MSTP) networks, while general services prioritize Internet access with additional emergency links. This ensures optimal cost allocation while maintaining communication quality, guaranteeing network quality and preventing disruption for critical operations like cash registers and logistics.

These network deployment optimizations have allowed Rainbow to maximize checkout efficiency through real-time reconciliation between the cash register system and the headquarters' inventory system. Real-time communication between loading personnel and the headquarters' logistics system guarantees punctual departures for every freight vehicle, allowing for efficient logistics operations.

Simplified operations and maintenance (O&M) add an extra layer of protection to Rainbow's network highway. A network digital map enables real-time, visualized management of network status to ensure efficient operations 24/7.

Rainbow's business spans over 200 supermarkets, shopping centers, and department stores across seven province-level divisions including Beijing, Jiangsu, Zhejiang, Guangdong, and Fujian. The company faces ever-increasing network maintenance requirements as its business continues to grow rapidly.

Conventional network site maintenance is not only labor-consuming and prone to delays due to fault detection, and it also struggles to keep pace with business development. Rainbow uses the network digital map developed with Huawei's iMaster NCE-Campus solution to comprehensively visualize the traffic of more than 51 million digital users at 130 sites nationwide. From site traffic and link quality to the traffic quality of key applications, Rainbow's IT personnel can immediately ascertain the overall communication quality across the network, pinpoint network faults, and handle them promptly.

In smart retail, the network is no longer a hidden cost, but the digital lifeline that determines operational efficiency. Through its industry-leading practices, Rainbow has established a solid digital foundation for smart retail with its network layout.

AI-Driven Smart Digitalized Stores

Huawei's SD-WAN functions as the 'capillaries' reshaping the smart retail business of Rainbow, and the Ling Zhi Lark AI model Rainbow developed using Ascend computing power is the smart 'brain' for retail innovation.

Precision marketing and operational efficiency are difficult to achieve in traditional retail. Marketing activities are heavily reliant on expert experience. Product operations lack data support and are often guided by subjective judgments. Likewise, store operations are heavily reliant on the expertise of store staff. This means sales performance is largely dependent on the skills of salespeople instead of data. Decision-making is not based on concrete data, which limits customer conversion and repeat purchases.

In September 2024, Rainbow launched the Ling Zhi Lark AI model (Lark for short) developed using the Ascend computing base. Following the release of DeepSeek-R1 in 2025, the model was connected to DeepSeek for localized deployment. Lark not only reduces costs and increases efficiency, but fosters innovation at Rainbow. So far, it has been applied in areas like marketing planning, customer service, sales guidance, operational decision-making, product analysis, and office assistance.

AI-driven omni-channel customer analysis significantly increases customer conversion and repeat purchases.

At Rainbow's sp@ce supermarkets, the system creates personalized recommendations based on multidimensional member profiles when members select products. This helps shoppers in a hurry find the products they need and tailors discounts to savvy deal-seekers. An initial and repeat purchase prediction model optimizes the shopping experience to increase conversion rates and average order value.

For post-sales services, an AI customer service feature collects and integrates customer feedback data from public and private channels, focusing on negative feedback on key dimensions like food freshness, store management, and product variety. The feature generates improvement recommendations and sends them to relevant personnel within two minutes. Using this AI customer service technology, Rainbow has boosted work order processing speeds by 50% while increasing customer satisfaction to 98%. The company has implemented a seamless process that captures, analyzes, and responds to feedback with precision, ensuring every customer need is heard, understood, and promptly addressed.

AI tailors marketing designs to consumer preferences.

Eye-catching marketing posters are essential for customer engagement. Conventional designs tend to be lackluster, but nonetheless require much time, effort, and resources. The Lark AI model revolutionizes designs through multimodal generation, which offers unparalleled creative potential. The model's AI design platform provides features like smart image cutout, virtual modeling, product beauty enhancement, and mass production of direct mail (DM) marketing assets. The platform comes with an extensive template library that meets the diverse design needs of retailers in online and offline channels.

After implementing the AI design platform, Rainbow has slashed poster creation times from three hours to just 10 minutes. The platform has boosted resource sharing efficiency by 40% and enhanced overall design productivity by 30%. During last year's Double 11 shopping festival in China, Rainbow's design team used AI to create more than 8,000 hyper-targeted marketing assets in mere hours, aligning perfectly with customer needs.

Rainbow transforms decision-making with data-driven precision to formulate strategies based on empirical evidence rather than guesswork. The company has developed a comprehensive management system that merges brand insights with location analytics to optimize management of every facet of company operations, whether its people, stores, and malls. AI is used to place the right brands in the right places, which significantly boosts conversion and mall-wide sales performance.

The Ling Zhi Lark AI model reduces costs, boosts efficiency, and fosters innovation in areas like marketing planning, customer service, sales guidance, and office assistance.

Leading the way in smart retail with a network and an AI model

Since its founding in 1984, Rainbow has grown into one of China's biggest chain retailers. Now, in the innovative city of Shenzhen, Rainbow is leading the way with cutting-edge digital technologies to redefine smart retail and create unprecedented growth.

In 2013, Rainbow embraced the mobile Internet revolution, rapidly going digital and merging its online and offline retail channels. Through continued innovation and iteration, the company has created a distinctive digital transformation framework.

Huawei serves as a trusted partner in Rainbow's digital transformation. It draws on its extensive expertise in cloud-network-security integration to offer retail companies unmatched agility.

Rainbow's digital retail network seamlessly links its stores across China with its headquarters. This ensures an innovative shopping experience for over 51 million digital members. According to the company's 2024 financial reports, this intelligent network's online sales and digital services resulted in an annual gross merchandise volume (GMV) of about CNY5.44 billion. Huawei's advanced SD-WAN solution is the engine powering Rainbow's digital transformation leadership.

The Ascend-powered Lark AI model is the first large language model (LLM) in the retail industry. It has enabled Rainbow's transformation while rapidly scaling across the industry. Retailers are rapidly adopting this intelligent engine and creating a smarter future for the industry.

Xiao Zhanglin, Chairman of Rainbow Digital Commercial Co., Ltd., reiterates that digital technology is a transformative engine reshaping retail. Retail digitalization is enabling dynamic shifts, elevating quality, and boosting efficiency in profound ways.

Over its four decades of operation, Rainbow has seized opportunities and reinvented itself amidst shifting tides, showcasing the boundless energy and adaptability of the retail sector.