Location-tracking technology can now monitor people so precisely that retailers know, for instance, which customers visited a fitting room but never made it to the cash register.
From there, retailers can serve custom ads on platforms like WeChat, Facebook and Google.
Cosmose is one start-up using location-based tracking to help retail firms do just that.
Tracking takes place through apps for which users have enabled location services (think weather, mapping, or ride-sharing apps). Seven apps have location tracking enabled on an average smartphone in China, according to Cosmose.
The company said it's tracked more than 1 billion smartphones, primarily in China, across 100,000 stores it works with. Its clients include Burberry, L'Oreal, Subway and Budweiser.
Cosmose said it plans to expand its reach into the United States.
In a U.S.-focused report, The New York Times recently found that more than 75 companies are receiving anonymous location data, and some claim to track up to 200 million devices in the U.S.
Cosmose said its technology is so precise that it can track a customer within a six-foot radius.
"We can tell that someone was trying the makeup, someone was trying fragrance," Miron Mironiuk, Cosmose's founder and CEO, told CNBC inside an Armani store in Hong Kong.
L'Oreal, a client of Cosmose, told CNBC that the technology has enabled it to convert offline casual shoppers into actual buyers.
'Privacy Fatigue'
Sales of location-targeted advertising could reach $21 billion this year, but some say it raises new questions about privacy.
Customers, however, are increasingly trading privacy in favor of convenience, in what Mark Lunt, group managing director of technology solutions firm JOS, called "privacy fatigue."
"You just think, well, 'they probably know it all already' — so off we go," he said.
Mironiuk, meanwhile, emphasized that Cosmose doesn't collect any personal data in the process.
"For sure, this new technology will create new questions, but I can assure you that we respect privacy," he said.
