Three Key Ways That Alibaba Enables Brands’ Business Growth
My colleagues Danny Mu, Guannan Lu, and I attended Alibaba ONE Business Conference on December 18 in Hangzhou. The conference attracted 2,000 business leaders from brands across industries and focused on how Alibaba enables brands’ business growth with its digital ecosystem, data and technology capabilities, and business methodologies.
Alibaba wrapped these tools, methods, and capabilities under the name of ABOS (Alibaba Business Operating System). ABOS enables brands to serve both online and offline consumers: the ONE business world. It powers brands in three key areas to drive growth: customer acquisition, product innovation, and organization digitalization. Brands and companies across industries like fashion and apparel, FMCG (fast-moving consumer goods), consumer electronics, and home decoration have adopted ABOS and achieved successful cases.
Digital Transformation Leaders’ Fast Growth Lies In Customer Acquisition, Product Innovation, And Organization Digitalization
The Alibaba ONE Business Conference highlighted the three key drivers that Alibaba uses to power brands’ business growth — customer acquisition, product innovation, and organization digitalization — and shared success stories of how brands leveraged Alibaba’s ecosystem to acquire new customers, launch new products, and digitalize organizations. From January to November 2019, retail sales growth rates of digital transformation leaders on Alibaba platforms are more than tenfold of the national averages across four key industries: FMCG, consumer electronics, apparel, and furniture. Customer acquisition and product innovation are the top growth drivers of these leaders: The average growth rate of new customers for leaders are 5 to 17 times the industry average. On average, new products contributed 30% to 80% of leaders’ sales growth.
The Alibaba Ecosystem Enables Brands To Acquire New Customers
Customer acquisition is the first key driver that Alibaba enables brands to grow. For example, 50% of Starbucks’ new acquired members are via the Alibaba ecosystem, including Tmall, Alipay, and new retail solutions. Brands leverage omnichannel consumer insights generated in the Alibaba ecosystem to identify prospects, convert them to customers, and continue to engage with them to maintain loyalty. By leveraging the Alibaba ecosystem, local snack brand Bestore (Liangpinpuzi) created a connected view of the brand’s online and offline customers and reached and engaged with a much broader base of consumers online and offline. Unilever integrated online and offline marketing by leveraging Alibaba’s digital store intelligent systems and achieved in-store conversion.
Alibaba Empowers Brands With Insights-Driven Product Innovation
Alibaba has created a new business model to turn data insights generated in its ecosystems across online and offline (including eCommerce, local services, Alipay, and more) into product innovation capabilities, from concept initiation to prototype creation, from demand forecasting to product launch promotion. Alibaba integrated these capabilities into TMIC (Tmall Innovation Center) and plans to empower over 100 million new product launches on Tmall in the next three years. Local coffee brand Saturnbird (Sandunban) successfully leveraged TMIC insights and launched multiple new products, including the most popular one that makes up 80% of its sales growth. Joyang collaborated with TMIC to streamline product design according to market trends and achieved 70% precision in demand forecasting — two times better than manual work. Alibaba plans to launch a TMIC basic version that brands and merchants can use for free.
Alibaba Facilitates Companies’ Organization Digitalization
In this session, Chinese FMCG company Liby and eyewear company NovaVision shared their successful stories of using Alibaba’s DingTalk, an enterprise communication and collaboration platform, to digitalize operations and improve work efficiency. With Liby Dudu, the customized DingTalk version specifically for Liby, Liby established a digital-intelligent communication and collaboration system across organizations, as well as with subsidies and suppliers, and largely increased work efficiency. NovaVision endorsed DingTalk because it’s effective in motivating store associates and solves channel conflicts. Store associates in the past were not motivated to serve customers who only want to try on in-store but buy online because they didn’t get any sales credit — now they can get credit with a specialized QR code on DingTalk.