July 11, 2017

Alibaba formulate new retail strategy using cloud computing as catalyst

Cloud and big data computing play critical roles in the shaping of Alibaba’s new retail industry approach.

Chinese e-commerce and data technology firm Alibaba has announced the formation of a new executive committee, led by CEO Daniel Zhang Yong, which will oversee the transition and enforcement of the company’s new retail market strategy. The ‘new strategy’, which Alibaba claim will significantly evolve worldwide retail methods, will be based on the concept of integrating online, offline, logistics and data across a single value chain.

Alibaba’s new retail concept will see big data technology being used to optimize offline retailers and online stores. The first example of this will be introduced through Alibaba’s experimental cashier-less store Tao Cafe at the 2017 Taobao Maker Festival in Hangzhou, China. At Tao Cafe, customers only need to scan a QR code on the Taobao app at the store entrance, through which they select items to purchase. To complete the transaction, shoppers have to go through the checkout doors and automatically make purchases using their smartphones, without going through a checkout lane.

In an internal memo issued to Alibaba employees detailing the need for the committee’s formation, Founder and Chairman of Alibaba, Jack Ma explained:

The internet has entered the most critical 30 years in terms of application… Many industries will be redefined in the new era powered by cloud computing, big data and the internet of things. Only those who embrace the trend can turn challenges into opportunities.

CMO Chris Tung also seems to have adopted a long term mentality when facing retail industry related challenges:

We have been promoting our idea of new retail, where Alibaba as a super-data company will leverage its data to support offline retail brands to run their operation with the data capability they have. We want to enable brick-and-mortar businesses with Alibaba’s data assets.

With approximately 500 million people shopping on Alibaba’s online platforms, the company has begun using its large pool of data to better match products with potential buyers. However, no further details were disclosed regarding the company’s plan for a consumer-driven production model.

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