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Tag: Taobao

  • Online retailer Taobao endorses physical store in Malaysia

    Online retailer Taobao endorses physical store in Malaysia

    Chinese online retailer Taobao is endorsing a spin-off physical store in Malaysia. The 5000sqft Taobao Selection store in Kuala Lumpur’s Viva Home Shopping Mall is the first in Southeast Asia, opening in collaboration between local operator Lumahgo, Taobao spinoff Tmall World, and lifestyle furniture retailer Lorenzo. It retails curated products from Tmall.com selected for the Malaysian market alongside furniture offerings.

    Lumahgo CEO Fabian Kong said: “We are developing a new retail system that caters to Malaysians, which will bring a new retail technology experience to local retailers … We are helping Tmall World to sell the selected products in Malaysia for customers who do not know how to shop online”.

    A reported 98 per cent of furniture purchases are made offline in Malaysia.

    Taobao’s owner Alibaba Group is contributing to the project by providing big-data tools and a technology platform. The collaborating partners will open a second Taobao Selection store will open in Sabah early next year.

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  • Alibaba powers Starbucks virtual store launch in China

    Alibaba powers Starbucks virtual store launch in China

    Starbucks launched its first virtual store in China powered by technology from Alibaba Group, providing a unified, one-stop digital experience across the Starbucks app and mobile apps within the Alibaba ecosystem, including Taobao, Tmall, and Alipay.

    The first-of-its-kind virtual store leverages an online management hub developed specifically for Starbucks by Alibaba. It provides consumers integrated access to Starbucks’ digital offerings, including “Starbucks Delivers,” “Say it with Starbucks” social gifting and merchandise available from Starbucks’ Tmall flagship store.

    Alibaba’s technology streamlines the shopping process, pulling offers that were available in multiple digital apps into a single access point. Adopting a centralized approach to its mobile presence enabled by the Alibaba ecosystem, Starbucks now has a complete overview of its consumers’ actions online. Moreover, the integration of membership between Starbucks and the range of Alibaba apps is expected to fuel strong growth in Starbucks Rewards membership in China.

    The new virtual store steps up the collaboration announced by Alibaba and Starbucks in August 2018, when the companies agreed a deep, strategic “New Retail” partnership. Ele.me, China’s leading on-demand food delivery platform, owned by Alibaba, provides Starbucks delivery service for 2,000 stores across 30 Chinese cities.

    In October 2018, Starbucks also piloted its first “Star Kitchens” within two FRESHIPPO (previously known as Hema) supermarkets in Shanghai and Hangzhou. As the first retail brand to establish a dedicated back-of-house presence in FRESHIPPO locations, each Star Kitchen utilizes the distinct fulfilment and delivery capabilities on-site to complement the handcrafted beverages offered through existing Starbucks stores.

    The launch of Starbucks’ virtual store is also the latest example of how the so-called “Alibaba Operating System” empowering traditional retailers. After years of development in this digital age, Alibaba has created a unique system to support enterprises in the process of digital transformation that covers critical areas such as retail, marketing, finance and logistics.

  • Le Eco Auctioning Beijing Mall on Taobao for RMB2.3B

    Le Eco Auctioning Beijing Mall on Taobao for RMB2.3B

    Chinese tech firm LeEco has put a Beijing shopping centre up for auction on Chinese e-commerce platform Taobao. Experiencing financial difficulties, yet determined to uphold its online trading practices, the firm has listed the 50,000sqm Beijing Shimao Gongsan Plaza at a reserve of RMB2.3 billion (US$334 million). The move follows legal action by mortgagor China Citic Bank against LeEco for failing to meet repayment obligations.

    The auction opens on Taobao’s distressed asset channel, which saw an 88 per cent rise in listings in October against the backdrop of China’s enormous bad debt market. Under supervision of the courts, the auction will start on January 7 at 10 am and run for 24 hours.

    The property was expected to sell last year to leading Chinese developer China Vanke, but was not traded due to unmatched expectations in price.

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  • South Koreans spending more on Chinese online stores

    South Koreans spending more on Chinese online stores

    South Koreans are spending more at Chinese online stores, according to credit-card spending data. Purchase records from November 1-26, compiled by the big data centre at Shinhan Card, showed a 9.8 per cent increase from last year in the value of goods bought from overseas internet sites. The number of transactions was up 16.6 per cent year on year.

    Chinese online stores outperformed rivals from other countries. AliExpress took 9.5 per cent of the purchases, up from 6 per cent in 2016 and 6.1 per cent last year. It ranked second after Amazon’s 16.3 per cent.

    Taobao, another Chinese Internet shopping site, grew from 2.3 per cent in 2016 to 3.3 per cent last year and to 4.4 per cent this year, raising it to the third most-used overseas online marketplace. Alibaba made it to the top 10 for the first time this year with 1 per cent.

    The shift is stark when comparing the purchases during Black Friday in the US and Singles Day in China. This year, overseas shopping during Singles Day rose 35 per cent. Black Friday purchases stopped at a 9 per cent gain.

    Data showed 70.8 per cent of purchases during Singles’ Day were for goods priced up to 50,000 won (US$44.32). Shoppers in their 30s and 40s remained the biggest clients, but the number of those in their 20s increased 1.9 percentage points from last year.

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  • Korean brands stars on China’s Singles’ Day

    Korean brands stars on China’s Singles’ Day

    South Korean retailers benefited from another record-setting Nov. 11 Singles Day shopping extravaganza led by Alibaba Group of China. Since 2009, Chinese retail giant Alibaba Group has transformed Singles’ Day, which falls on Nov. 11, into an online shopping festival with large discounts offered for 24 hours.

    Over 40 percent of shoppers made purchases from international brands, said Alibaba.

    Among the countries that sold products to Chinese customers on Sunday, Korea ranked third after Japan and the United States.

    Korea placed at No. 3 on the list in 2016, but fell two ranks last year after the deployment of the U.S.-led terminal high altitude area defense (Thaad) antimissile system.

    The incident soured relations between the two countries and provoked a boycott movement against domestic brands in China.

    The exact volume of Korean goods purchased on Sunday was not disclosed, but it was evident that the shopping spree had an impact on local companies, as some of them reported record-breaking figures on Monday.

    Korea’s top beauty and personal care brand LG Household & Health Care Ltd. said on Monday that overall cosmetics sales during this year’s around-the-clock shopping gala rose 50 percent from a year ago at Tmall Global, a major e-commerce platform managed by China’s Alibaba Group.

    Sales of household items also jumped 73 percent during the same period.

    LG Household & Health Care raised 23 billion won (US$20.3 million) in sales of its flagship cosmetics label the History of Whoo during this year’s Singles Day event, up 72 percent from last year.

    Sales of luxury cosmetics brand su:m37 also jumped 82 percent during the same period mainly driven by increased demand for its Water-Full skin-care product line.

    The brand sold 26,500 sets of Water-Full line on November 11, up 208 percent from a year ago. It sold 24,400 sets of its Time Energy skin moisturizing solution, up 48 percent during the same period.

    Korea’s largest cosmetics company AmorePacific Corp. also scooped up sales on Sunday event.

    Sales of Yoonjo Essence, an activating serum of its premium cosmetics brand Sulwhasoo, hit 10,000 in just 60 seconds after launching sales at Tmall.

    Pre-order sales of Hera’s Rouge Holic lipstick also quintupled this year from last year.

    Korea’s fashion and retail conglomerate E-Land Group that manages 19 brands on Tmall raised 72.3 billion won in revenue on November 11 alone.

    Korea’s largest manufacturer of instant noodles Nongshim Co. also raked in record sales of 800 million won at Alibaba’s online shopping mall Taobao on the event day, more than tenfold from its daily average sales and up 25 percent from last year.

    The company attributed record sales to its top-sellers Shin Ramyun and Kimchi Ramyun.

    Alibaba clocked in sales of US$30.8 billion in the 24-hour shopping gala that began at 12 a.m. Sunday, beating last year’s US$25.3 billion.

  • Alibaba invests in clothes sharing platform Ycloset

    Alibaba invests in clothes sharing platform Ycloset

    Alibaba has invested an undisclosed figure in Chinese garment-sharing platform YCloset.

    The site’s strategic fundraising round that secured the Alibaba funding will be used to expand its data analysis functions and physical operations centres.

    The Beijing-based service allows users to rent clothes and accessories for a monthly subscription fee. It has more than 15 million registered users and provides a range of subscription plans and options to purchase garments.

    YCloset CEO Liu Mengyuan said wearing fashionable clothes will “always top the agenda of almost every woman”.

    “Compared with buying items in a store, clothes rental services will allow women to update their looks more frequently and wear more dresses that they could not afford to buy.”

    He added that the company will cooperate with a number of e-commerce platforms including Xianyu, Taobao, Tmall and Alipay.

    Alibaba Innovation Ventures was among the investors who raised $50 million for YCloset last year in a series C fundraising round.

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  • Starbucks and Alibaba form New Retail Partnership in China

    Starbucks and Alibaba form New Retail Partnership in China

    Starbucks China and Alibaba have announced an alliance that stretches way beyond the latter’s online delivery platform Ele.me.

    The two companies describe their pact as “a deep, strategic New Retail partnership” that will enable a seamless Starbucks experience and transform the coffee industry in China.

    The partnership spans Ele.me, the food delivery platform acquired by Alibaba last month, Hema supermarkets, Tmall, Alipay and Taobao. Pilot delivery services by Starbucks China will start next month with the coffee company opening delivery kitchens to fulfil orders and “co-create an unprecedented virtual Starbucks store”.

    Starbucks China CEO Belinda Wong says the partnership with Alibaba breaks the physical and virtual barriers between the home, office, in-store and digital space.

    “It will make China the first Starbucks market to deliver a seamless Starbucks experience across all facets of our customers’ lives.”

    Alibaba CEO Daniel Zhang said Starbucks is more than a destination for premium coffee “and we share the same vision to pioneer a new coffee culture and lifestyle through innovation and technology”.

    It starts with Ele.me

    Ele.me, China’s largest on-demand food delivery platform with 3 million registered delivery riders, will start delivering Starbucks orders from 150 stores in key trading zones in Beijing and Shanghai next month. By the end of the year, that service is expected to expand to more than 2000 Starbucks stores across 30 Chinese cities.

    The two companies have worked together to develop what they describe as “a unique, customised delivery infrastructure” including dedicated delivery riders, precise delivery times, and custom carriers. They believe they will be able to offer “a best-in-class coffee delivery service standard for Chinese customers” which could well be interpreted as a challenge to local startup Luckin Coffee which has grown into a US$1 billion company in less than a year, based on a mixed delivery and in-store model.

    Starbucks will partner with Hema supermarkets to open dedicated “Starbucks Delivery Kitchens” within stores. The kitchens will use Hema’s fulfillment and delivery capabilities to complement the delivery of Starbucks beverages offered through existing Starbucks stores. Starbucks will also use Hema’s consumer insights and fulfillment expertise to reach more communities across China.

    Data from Hema stores will be used to help plan the location of future Starbucks cafes, combined with delivery kitchens. The first delivery kitchens will open in selected Hema supermarkets in Shanghai and Hangzhou next month.

    Digital transformation

    Starbucks China and Alibaba say the creation of a ‘virtual Starbucks store’ in China is a key strategic initiative under the partnership.

    Alibaba will develop a centralised online management hub, with the capability to integrate and deliver a consistent Starbucks experience across multiple digital platforms. “This innovation will transcend the traditional limitations of a single-app visit by providing the consumer an elevated, and even more personalised Starbucks digital experience across the Starbucks app and Alibaba’s customer-facing mobile apps, including Taobao, Alipay, Tmall and Koubei,” the companies said in a statement.

    “This latest innovation will revolutionise the traditional offline-to-online model by effectively extending the reach of the Starbucks experience into the everyday lifestyle ritual of the Chinese consumer, regardless of time or place. Whether it is at home or in the office, within a Starbucks store or online, Starbucks customers will be able to access and enjoy a one-stop Starbucks experience when purchasing merchandise online, buying a Starbucks handcrafted beverage to be delivered to a friend or sending a Starbucks gift of love on the “Say it with Starbucks” social gifting platform.”

    Starbucks will progressively integrate its Starbucks Rewards membership platform onto the centralised system to use its consumer insights to deliver a personalised experience to customers.

    “Starbucks China and Alibaba are trusted business partners who share common values in the spirit of innovation and the unrelenting pursuit of product and service excellence,” the statement said.

    “Thanks to the elevated customer experience delivered by our more than 45,000 partners, Starbucks is growing and innovating faster in China than anywhere else in the world,” said Kevin Johnson, president and CEO at Starbucks Coffee Company. “Our transformational partnership with Alibaba will reshape modern retail, and represents a significant milestone in our efforts to exceed the expectations of Chinese consumers. Starbucks China is one to watch, and I have full confidence in the team that will bring the new innovation behind the Starbucks Experience to life.”

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  • Ele.me big ambition ready to dominate China’s food-delivery market

    Ele.me big ambition ready to dominate China’s food-delivery market

    Ele.me aims to grab a majority share of China’s food-delivery market in the near future, CEO Wang Lai, (pictured), said this week.

    Moving into Alibaba’s ecosystem has already created new and immediate opportunities for Ele.me and the 3 million-strong delivery force registered through its platform, Wang said. While core food delivery is likely to provide strong growth longer-term, insights offered by various Alibaba apps and platforms, coupled with a growing need for last-mile delivery in Alibaba’s overall New Retail strategy, offer hints of what’s to come.

    Alibaba took control of Ele.me in May. In June, after plugging the delivery company into its ecosystem, Ele.me delivery orders for categories including supermarkets, convenience stores under Alibaba’s Ling Shou Tong program, fresh fruits and flowers climbed 110 per cent from a year earlier. In the future, Wang said there’s the chance for tie-ups with other Alibaba business units and collaboration with nationwide food chains as a delivery partner.

    Ele.me has already begun benefiting from consumer insights derived from Taobao, Tmall, Alipay, Youku and other platforms and apps in the Alibaba ecosystem, which drives traffic to Ele.me and helps it understand the needs of Chinese consumers.

    As for Ele.me’s core food-delivery market, the Alibaba unit recently launched a RMB3 billion summer promotion campaign that’s already starting to show results in several Chinese cities. In Hangzhou, Ele.me added 100,000 customers to its membership program early this month. In Changsha, during just the first two weeks of July, gross transaction volume climbed by almost 15 per cent over the same period in the previous month.

    The summer campaign kicked off with discounts and coupons for late-night snacks delivered during the recently ended FIFA World Cup 2018 tournament. The World Cup deals spurred what Ele.me said was a “rapid rise in food delivery” in early July, with momentum sustained since then.

    But it is the sector’s longer-term prospects that excite Ele.me’s CEO. Chinese customers spent around RMB4 trillion on food in 2017, according to China Cuisine Association data. Less than 10 per cent of that went toward food delivery, which has become one of the fastest-growing and most-competitive areas in China.

    “We view the limited penetration of delivery in the food and beverage sector to-date as a tremendous opportunity for growth,” Wang said.

    Ele.me also complements Koubei, Alibaba’s local services platform. By combining Ele.me’s on-demand delivery service with Koubei’s consumer-acquisition and in-store engagement capability for restaurants and service establishments, Alibaba can offer an integrated online/offline experience to consumers, in line with the group’s overall New Retail strategy.

    “The local-services market is a must-win for Alibaba as part of its New Retail strategy, and we look forward to Alibaba’s continued financial and technological support to win this market,” said Wang. “As the spending power of Chinese shoppers continues to grow, the local-services sector becomes critical for Alibaba to build customer and merchant engagement and fulfill its mission of accelerating the digital transformation of traditional retail.”

  • Alibaba Says Its AI Copywriting Tool Passed the Turing Test

    Alibaba Says Its AI Copywriting Tool Passed the Turing Test

    Alibaba’s digital marketing arm Alimama has unveiled an artificial intelligence-powered copywriting tool.

    Tapping the huge pool of content on Alibaba’s e-commerce sites Tmall and Taobao, the AI copywriter uses deep learning and natural language-processing technologies learn from millions of top-quality existing samples to generate copy for products. Brands and advertisers can insert a link to any product page, and click the “Produce Smart Copy” button to see multiple copy ideas.

    Currently, the AI copywriter technology has passed the ‘Turing test’ and is capable of producing 20,000 lines of copy in a second, said Alimama. Brands using the new tool, such as Hong Kong-listed fashion chain Esprit and Texas-born clothing brand Dickies, can adjust the length and tone of their copy, such as dictating whether they want the tone to be “promotional, functional, fun, poetic or heartwarming.”

    The tool is used on average nearly a million times per day, by merchants and marketers on Alibaba-owned sites such as Taobao, Tmall, Mei.com (a fashion flash sale website) and 1688.com (Alibaba’s Chinese-language wholesale buying site).

    “For merchants, from today onwards, AI can take care of a portion of their copywriting needs. And it significantly changes the way [copywriters] work: They will shift from thinking up copy – one line at a time – to choosing the best out of many machine-generated options, largely improving efficiency,” Alimama said in a statement.

    As with design, copywriting involves a certain degree of repetitive, low-value work that can be made made more efficient, Alimama added. A single product might require up to 10 versions of copy for different ad formats, like posters, web banners, product pages and other special event pages.

    “All the content produced by the AI Copywriter is the result of applying deep learning models, trained with large volumes of quality content created by humans. Human creativity is the cornerstone for the machine, which isn’t able to replace the creativity of people,” said Christina Lu, GM of Alimama marketing. “AI for marketing… allows people to devote more energy to richly creative work.”

    “The AI copywriter is a really amazing tool,” said Shaozhang Ding, head of e-commerce for the Asia Pacific market at Esprit. “Based on a massive database of existing copy and advanced AI technologies, the tool can reduce the repetitive and tedious copywriting workload for our teams.

    The AI Copywriter is the latest in a suite of technologies Alimama has developed to assist small to mid-sized businesses on Alibaba’s e-commerce platforms, including a “smart banner designer” released in April that can resize and reformat promotional website banners with the slide of a mouse (drag a corner of the banner to change the shape of the box, and the system automatically reproportions the images and copy to fit the new format). In the same vein, Alibaba released an AI-powered video-editing tool for brands to generate – in less than a minute – 20-second videos to use for promotion on Taobao.

  • Alibaba plans massive 3-year expansion of Rural Taobao network

    Alibaba plans massive 3-year expansion of Rural Taobao network

    Alibaba Group’s rural initiative – Rural Taobao – plans to expand its coverage to 1000 counties and 150,000 villages across China during the next three years.

    Launched in October 2014, Rural Taobao is one of Alibaba’s three main strategic projects in addition to globalisation and cloud computing. It aims to buttress trade between China’s remote regions and urban areas. Presently, around half of China’s 1.3 billion population reside in rural areas.

    “Our mission is clear: We want to improve the living conditions of China’s rural regions. To do so, we need to provide high-quality goods, personalised services, smart logistic solutions and prices comparable to that of the cities,” said Bill Wang, VP of Alibaba Group and GM of Rural Taobao.

    As part of the project, a network of e-commerce service centres has been created at the county and town level to provide services that enable villagers to purchase products online, as well as sell their goods via Rural Taobao’s dedicated online marketplace and other Alibaba e-commerce platforms. This way, villagers can enjoy a wider range of products and promote their own products beyond the village borders.

    Currently, the initiative covers 700 counties with over 30,000  service centres.

    Speaking at 2018 Rural Taobao Merchant Summit at Alibaba’s Hangzhou headquarters, Alibaba executives emphasised the consumption power of China’s rural population, though weaker than in urban centres, is gradually becoming a force to be reckoned with.

    According to the latest report from National Bureau of Statistics, in 2017, the average disposable income per capita in China’s rural region increased by 8.6 per cent year-on-year to RMB 13,432 (US$2066). Consumption per capita also climbed 8.1 per cent year-on-year to RMB 10,955.

    The amount of online retail shopping in rural areas is also booming. In 2017, sales reached RMB 1.24 trillion ($194 billion), representing an on-year surge of 39 per cent, said the Ministry of Commerce.

    One of the short-term goals is to offer next-day delivery of any goods and at-home installation of large electronic products, Wang added. Alibaba has also recently opened a number of “Taobao Select Service Stations,” where villagers can purchase an array of products, from food, to clothes and electronic items, at a physical location, without having to place the orders online.

    An integral part of the initiative is empowerment of the merchants, said Wang. By sharing insightful analytics about customer preferences and market trends with the brands, companies can develop products or craft marketing campaigns that are more befitting rural consumers.

    For example, Germany-based skincare and personal hygiene giant Beiersdorf Group recently sent a team of researchers on a three-month fact-finding trip in China’s villages to learn about their hair-washing habits. From the information they’ve gathered, the parent company of iconic brands such as Nivea and Eucerin is able to design a shampoo that best meets the local needs and demands.

    “Even though rural regions constitute a small portion of our total revenue, we treat it as an important market, not merely a sale channel,” said John Zhang, GM of Beiersdorf China, who has personally visited more than 50 villages in the country.

    In cooperation with brands, Rural Taobao also conducts frequent training sessions for service station managers to equip them with the necessary know-how and skill to deliver the best service to their customers, said Wang.

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  • Alibaba Hosts Taobao Maker Festival in September

    Alibaba Hosts Taobao Maker Festival in September

    China’s millennial generation is the driving force behind the shift from “Made in China” to “Created in China.” To celebrate this new generation of makers, and the consumers who are increasingly looking for unique, niche brands and products to express themselves, Alibaba Group (NYSE: BABA) will host its Taobao Maker Festival from September 13-16, 2018 at the iconic West Lake in Hangzhou. Founded in 2016, this year’s event will be the biggest yet, bringing together hundreds of Taobao creators to showcase their innovations.

    The four-day event will draw inspiration from the city’s rich heritage and folklore and transform the picturesque West Lake into an exciting offline bazaar, featuring innovative products, cutting-edge technologies, indie designer fashion shows, live concerts, and more. Centered around the intersection of tradition and innovation, the festival will spotlight unique millennial merchants such as Chinese costume brand Kongxuansi, which sells clothes inspired by the embroidered uniforms of Ming dynasty imperial guards. The venue will also feature a 300-square-meter “futuristic shopping area” powered by AR, where thousands of visitors can discover brands, visualize in-home decor, and enjoy animated virtual companions as they shop using headsets.

    Taobao is the world’s largest mobile shopping destination and more than half of its 610 million mobile active users are in their 20s and 30s. According to KPMG, millennials will become the biggest spenders in China in the next five years. Now in its third year, the Taobao Maker Festival has not only become an annual gathering for entrepreneurs to demonstrate their creativity, but also a window for the world to better understand China’s aspirational young consumers.

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  • Alibaba’s Taobao has launched a special version of its app for elder people

    Alibaba’s Taobao has launched a special version of its app for elder people

    Alibaba’s C2C e-commerce site Taobao aims at seniors and their families on a newly launched shopping channel on its platform.

    Taobao for retirees aims to be easier for seniors to register an account and browse products, delivering an improved user experience that includes personalised recommendations and after-sales service, says Taobao head of development Ding Jian.

    It also includes a peer-to-peer chat service, allowing family members to share products and consult or help one another in one click, as well as a new “pay-for-me” option to pay for another’s purchases.

    It is the first move by Taobao this year to refine services based on a particular consumer group. “We want Taobao to become a bridge that helps them strengthen relationships with the younger generation, brings them closer together,” says Ding.

    The channel also expands Taobao from being “a tool for individuals” to a more-social “shopping destination for our relatives, partners and children…a shared place where we can seamlessly exchange product information and interact with each other as a unit,” says product manager Zhang Xiaoyu.

    “Great to see”

    “For middle-aged to elderly people, the website layout is too loud with too much information. Things we don’t need to see can be removed,” says retired teacher Liu Yanping, quoted on Alibaba Group’s Alizila news service. “And they did it – they simplified the website and made it cleaner. It’s great to see that.”

    Former engineering professor Li Lu says the channel will have a major impact on seniors. “In my social circle, most of us stay home and rely on Taobao. Retirement would be impossible without Taobao. Groceries can be too heavy to carry,” says the 83-year-old.

    Alibaba is recruiting two “senior experience officers”, senior citizens who are influential in their social circles, to provide user feedback and help further improve the channel.

    China’s population of over-60s is expected to exceed 255 million by 2020, up from 230 million in 2016 and equivalent to 16.7 per cent of the nation’s overall population, according to the National Health and Family Planning Commission.

    Alibaba figures show that more than 30 million Taobao users are 50 years or older, with more than 75 per cent falling in the 50-59 range, and nearly 20 per cent 60-69. More than 1000 livestream shows aimed toward this consumer group are broadcast on Taobao daily.

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  • Alibaba to thank New Retail for Its record sales

    Alibaba to thank New Retail for Its record sales

    Continuing momentum in Alibaba Group’s New Retail business helped drive a 56 per cent year-on-year growth in sales for the quarter to December 31.

    The performance of the New Retail category – which combines its online (non-marketplace) and fast-growing offline retail businesses, including investments in Sun Art Retail and other established businesses – was a core highlight of the quarter, according to CEO Daniel Zhang.

    “Alibaba had another great quarter driven by the continued strength of the Chinese consumer and the wide and innovative range of services we provide for merchants and consumers,” he said.

    “We are excited by the continued momentum in New Retail, which came to life during another record-breaking 11.11 Global Shopping Festival. We expanded the scale and footprint of our New Retail initiatives with the vision of delivering true convergence of the online and offline consumer experience through mobile and enterprise technology.”

    Maggie Wu, CFO, said the group’s core business generated significant free cash flow of US$7.1 billion during the quarter, “enabling us to invest in New Retail, cloud computing, digital entertainment and globalisation”.

    Revenue from core online commerce (marketplace) activities rose 57 per cent to US$11.257 billion and from cloud computing by 104 per cent to $553 million. Digital media and entertainment sales rose 33 per cent to $832 million.

    The number of annual active consumers on Alibaba Group’s China retail marketplaces reached 515 million, an increase of 27 million from the year to September 30.

    Net income was $3.586 billion with operating margin was 31 per cent and adjusted EBITA margin for the core e-commerce business 53 per cent.

    Group highlights

    Alibaba summarised group highlights in its earnings statement, including:

    Taobao: Artificial Intelligence (AI) drove user engagement, with the Taobao app’s intelligent personal recommendations and innovative content formats continuing to drive strong growth in user engagement, conversion and annual active consumers. “We continue to invest in machine learning technologies which we apply to use cases that match consumer intent and product selection to deliver the best consumer experience.”

    Tmall: Tmall recorded 43 per cent year-on-year growth in physical goods GMV during the quarter, reflecting robust growth across all major categories including apparel and accessories, consumer electronics (mobile phones) and FMCG. “Tmall continues to be the platform of choice for the world’s top brands, with Givenchy, Giorgio Armani Beauty and Volvo establishing Tmall flagship stores and Longines, Hennessy, Dom Perignon and Baccarat joining our Luxury Pavilion in this quarter.”

    11.11: Last year’s annual November 11 Global Shopping Festival exceeded the previous year’s records, with GMV settled through Alipay on Alibaba’s marketplaces up 39 per cent year-on-year to $25.9 billion. “The continuous success of this record-breaking event is enabled by our resilient and scalable technology, as well as payments and logistics infrastructure that is capable of operating at massive scale.”

    New Retail: Rapid expansion through partnerships and innovative technologies included the opening of five new Hema fresh grocery stores in Shanghai, Beijing, Ningbo and Suzhou, taking the network to 25 at year end. “Hema exemplifies the convergence of online and offline retail by leveraging our in-store proprietary technology, digitised supply chain system, consumer insights and mobile ecosystem to provide a seamless experience for consumers.”

    In November, Alibaba formed a strategic alliance with Sun Art Group, the leading hypermarket and supermarket chain by revenue in China with over 440 stores nationwide. “Through this partnership, we aim to equip traditional retailers with our proprietary technology and know-how in online offline convergence to implement their digital transformation. In addition, the partnership with Sun Art will also enable us to accelerate the expansion of our New Retail offerings with national scale.

    International:  Alibaba’s cross-border and international retail businesses continue to show strong growth. Revenue from international commerce retail business reached $727 million in the, representing 93 per cent year-on-year growth, driven by its Southeast Asian platform Lazada and its global retail marketplace AliExpress. “While the markets for Southeast Asia and cross-border commerce remain very competitive, they are in the early innings of the game. We are optimistic about the long-term secular growth prospects of our international markets and will therefore continue to make significant investments for market share growth and focusing on the best customer experience.”

    Cainiao Network: Alibaba’s logistics division, Cainiao Network, processed 812 million orders during the 11.11 event. Cainiao Network operates an electronic shipping label system that standardises shipping data into structured formats, which enables efficient pick-and-pack operations for merchants and sorting and routing operations for delivery partners. “The advantages of this system have resulted in broad adoption by merchants and logistics service providers, both on and off our platforms, putting us in position to serve the growing consumption economy in China and roll out our New Retail strategy.”

    Cloud Computing:  Cloud computing revenue grew 104 per cent year-over-year to $553 million, driven by both robust growth in paying customers and revenue mix toward higher value-add product.  “In the December quarter, Alibaba Cloud launched 396 new products and features and continued to introduce proprietary AI technologies to tackle real-world challenges, such as traffic planning and optimising efficiency in manufacturing and airport operations. Alibaba Cloud continues to expand its customer base across a variety of industries.”

    Alibaba Cloud customers include Watsons China, carmaker Geely, and Beijing Capital International Airport.

    Digital Media and Entertainment: During the quarter, Youku video’s daily average subscribers more than doubled year-on-year, driven by several original drama series and shows that became popular hits with users.

    AI and innovation: Alibaba says its AI-powered voice assistant, Tmall Genie, surpassed 1 million unit sales since its official launch in July and the end of the year. “Tmall Genie is supported by a growing collection of sales and services and is an effective vehicle for offering a comprehensive set of every-day living applications within the Alibaba ecosystem,” the company said.

    In January, Alibaba’s Institute of Data Science Technologies (iDST), its AI research arm, developed a deep-learning neural network for natural language processing that scored higher than humans on a Stanford reading-comprehension test, the first time a machine has outperformed humans on such a test. “This development underscores Alibaba’s commitment to technology research which we believe builds the foundation for our growth in the long run.”

    Ant Financial: Alibaba Group agreed to take a 33 per cent equity stake in Ant Financial that will strengthen its strategic relationship pursuant to the series of agreements reached with Ant Financial in 2014. “We believe deepening our relationship through an equity stake in Ant Financial will bring key strategic benefits to us, including advancing our New Retail strategy with mobile payments, increasing user acquisition and retention through collaboration with the Alipay digital wallet (Alipay Wallet), and enhancing the execution of our international expansion.”

    The number of Alipay Wallet’s daily active users more than doubled during the quarter on a year-on-year basis.

  • Taobao Again on U.S. Blacklist for Counterfeit Products

    Taobao Again on U.S. Blacklist for Counterfeit Products

    Taobao has been added to the USTR counterfeit blacklist for the second successive year for selling suspected fake items on its shopping platform.

    However, the Chinese e-commerce giant says the listing does not reflect its IP-protection efforts.

    Owned by Alibaba Group, it is one of 25 online markets along with 18 physical markets to make the annual USTR (US Trade Representative) list of “the world’s most notorious markets” for selling pirated and counterfeit goods.

    Taobao managed to stay off the list from 2012 to 2015, but was included in 2016 and now again for last year.

    “A high volume of infringing products reportedly continues to be offered for sale and sold on Taobao.com, and stakeholders continue to report challenges and burdens associated with IP enforcement on the platform,” says the USTR. While the agency acknowledges Alibaba’s efforts to curb the sale of fake products on Taobao, it says the prevalence of infringements is still a challenge.

    Alibaba says it has made its IP protection programs easier to use, leading to an 11 per cent increase in registries plus a 25 per cent drop in takedown requests as infringing listings were removed even before reaching its marketplaces.

    “In light of all this, it is clear that no matter how much action we take and progress we make, the USTR is not actually interested in seeing tangible results,” says Alibaba Group president Michael Evans.

    The USTR says Alibaba’s data does not directly reflect the scope and status of the counterfeiting problem on Taobao, but is “merely suggestive of progress” in its anti-counterfeit efforts. It also says those efforts appear to be more toward addressing the concerns of global brands rather than small and medium businesses.

    “It is incumbent upon Alibaba to develop more effective means to address the concerns of the full range of US businesses that continue to find infringing versions of their products for sale on Taobao.com.”

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  • Macy’s taps VR, live video in China push

    Macy’s taps VR, live video in China push

    Macy’s, the iconic US bricks-and-mortar retailer, has taken a digital-first approach in its effort to crack the complicated China market by using innovative virtual reality and influencer strategies.

    “When we came into China, we started digital first, and we started building big digital homes,” Dustin Jones, Executive Vice-President and Managing Director of Macy’s China, told an audience at the World Retail Congress Asia Pacific event in Hong Kong.

    “We view ourselves as not a player or an instrument in China but an orchestrator of a better, more simple, more entertaining consumer transaction,” he added.

    To make a splash with Chinese millennials, Macy’s turned to virtual reality. In late October, Alibaba sold 150,000 cardboard VR headsets for just 1 yuan (about US$0.15) on Taobao, China’s equivalent to eBay. In the days leading up to Singles Day – 11 November – customers could use the headsets with Taobao’s app to shop a virtual reality version of Macy’s iconic New York flagship store.

    “We created the first virtual reality department store,” said Jones. “We launched that virtual reality department store last year on (Single’s Day) – five million people shopped that virtual reality store with us. We filmed it all in New York in Macy’s Herald Square and made all those products shoppable.”

    Macy’s has also tapped live streaming to bring New York fanfare to Shanghai, with a local twist.

    “We did a fashion show even last year for what we would call ‘grand opening’ on Tmall. That fashion show was live-streamed in New York with an after-party by a Chinese host. And also, then a talk show was created in Shanghai where we did a fashion show down the side of the very tall building and showed the product in a completely different way, and we sold all of the product through live video,” Jones said.

    “On that event, 150m people participated in our live show, and on the two events combined, 300m people participated.”

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