Alibaba’s Plan to Go Global and Reinvent Retail With 11-11 Shopping Festival

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Published November 9, 2016

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What used to be known as “Singles Day” in China has been redefined and rebranded as “The 11/11 Global Shopping Festival” by the holiday’s eCommerce patron saint, Alibaba, and with good reason. This year’s 11/11 is going glam, global, and digital.

Nine years ago, Alibaba used Singles Day to offer massive discounts to draw consumers to their platforms Tao Bao and Tmall. Last year, it became the largest single-day retail event in history, producing $14.3 billion in sales for Alibaba. This year, the eCommerce giant will likely sell between $17 and $20 billion worth of goods in 24 hours. There will also be a celebrity-filled gala in Shenzhen, China counting down the hours to 11/11, the culmination of a three-week lead up full of new technology roll-outs, special events, and new market openings.

The real purpose of this year’s 11/11 event is for it to be a launching pad for chairman Jack Ma’s dream of reinventing and digitizing retail-first in China, and then around the world, and to take the first step in “serving two billion global customers.”

Some of the best known brands and retailers from around the world, including Nike, Macy’s, Costco, and Burberry, will be active participants this year and those who aren’t, need to pay close attention and start making plans to take part next year, because their future could be at stake. This 11/11 has the potential to alter the future of eCommerce, bricks and mortar retailing, and global brand engagement forevermore.

The Short-Term Prize: 600 Million Chinese Consumers

The initial draw of Singles Day was the massive discounts, but it takes much more for brands to be successful today.

Brands have to plan their product mix well, used analytics to forecast demand, have the right marketing and social media, build the right supply chain structures and perhaps most importantly of all, spend the time and resources to understand the Chinese consumer and what factors determine purchases motivators including: product quality, brand perception, brand name and awareness, cultural relevancy and demographics.

The Long Game: A New Retail Model 

The Global Shopping Festival will draw plenty of attention with its expected record sales, the number and quality of foreign and domestic brands taking part, and the sheer scale in numbers of consumers taking part. The real story this year is how Alibaba is using the day to launch its initiative to remake global retailing and become the first truly global eCommerce platform. Here’s how they will do it.

Step One: Going Glam

Building on the success of last year’s gala, Alibaba has hired Hollywood producer David Hill, known for his work on the Oscars, Super Bowl, and American Idol, to direct and produce this year’s four-hour live entertainment spectacular. The New Year’s Eve-style countdown show will feature headliner and global ambassador Katy Perry, along with other big names such as Kobe Bryantand One Republic with others to be announced, and end with the unveiling of the order ticker that will tally the sales over the following 24 hours. The event will be live streamed in China and other parts of the world but not in the U.S. To cover that gap I will be live-blogging from the event on Forbes so you can follow along on November 10.

The slickly-produced show and celebrities will ensure global coverage. This is important because in the U.S. and Europe Alibaba is still virtually unknown to consumers and awareness is still very low among brands and retailers. Much like the 2014 IPO, the gala will raise Alibaba’s and 11/11s brand awareness.

Step Two: Going Global

For the first time Alibaba will open 11/11 shopping to consumers in Taiwan and Hong Kong, in addition to its 600 million customers on the Chinese mainland. This is a planned first step in turning 11/11 into a truly global shopping event. Plans call for Southeast Asia to be included in 2017 and other developing and Western markets to follow. This is a key development as cross-border e-commerce continues to develop into the biggest game-changer in branding, retail, and consumer engagement.

You cannot get to two billion customers without new markets. Hong Kong and Taiwan will provide Alibaba and its merchants with the data, the feedback, and the blueprint for engaging 1.5 billion new customers in the coming years to join Alibaba’s platforms. It is expected that Southeast Asia will be added next year and many more markets in the following years.

Step Three: Going Digital

Brands and retailers are desperate to find growth and new customers. Currently, the process of putting band aids on an industry that needs a heart transplant is not working. A new retail model is needed.

There are a number of global platforms and tech companies, like Amazon, China’s JD.com, and Tencent, that are working on solutions. Alibaba’s introduction of a number of innovative digital and O2O (online to offline) elements to this year’s extended event could be the jolt and blue print the industry needs.

The new tech driven additions started with an eight-hour fashion show streamed online on October 23. Viewers instantly placed orders for what they were seeing on the catwalks. Top brands from Burberry to Trussardi, Paul Smith to La Perla showed their latest offerings for the season while Maserati, Guerlain, Rimowa, Vidal Sassoon and New Balance introduced their new creations. Also, Burberry released a mist of its Mr. Burberry cologne to promote the scent’s debut on Tmall.

Other digital additions include: an augmented reality game, where shoppers can follow the Alibaba ‘black cat’ in online and offline environments to win prizes and discounts and a virtual reality shopping set-up that takes customers through the entire shopping experience, from browsing, to nodding at the item you want to buy, through payment.

By connecting online and offline retail channels with a wide array of digital tools and a digitization of the shopping experience, it should make buying in stores and online equally attractive and convenient for consumers. The goal is to provide customers with a frictionless, multi-channel experience. Also, helping to ensure that bricks and mortar retail remains viable and grows in China. There has been some backlash in China with retailers complaining that eCommerce is ruining their business. The same complaints have been echoed in the U.S.

What Alibaba is doing better than almost anyone in the world right now is, re-imagining what retail can be. The eCommerce giant is willing to experiment in pursuit of a new retail model that benefits brands and retailers first and itself second.

It is important to note that unlike Amazon, Alibaba’s Tmall is only a platform where brands own their customer data and Alibaba does not compete with its merchant’s through private label brands or other means, making it an ideal platform to “go global” with.

For brands and retailers looking to find new global customers, to engage in cross border commerce and find the model for making all of their sales channels seamless and digitized, this year’s 11/11 will provide many of the answers. Working with Tmall in China today means that you can be tied in to their global expansion and re-invention of retail tomorrow.

Jim Tompkins, CEO, Tompkins International

In a discussion with Jim Tompkins, CEO, Tompkins International he had a very interesting view of where Alibaba is today. Dr. Tompkins view is very important as he introduced Alibaba to the U.S. three months before the IPO in June of 2014, with his thought leadership video The Alibaba Effect. The video has been a key tool in spreading the word in the U.S. on the significance of Alibaba. Dr. Tompkins view is that although Alibaba is a big deal and a very big deal in China, the most important reality is that Alibaba is the first truly global company. Alibaba is the world leader in global trade and this component of the 11/11 Global Shopping Festival is the one that is most unique and most exciting.

In Tompkins newest video, Supply Chain Revolutions: Responding To Digital Disruptions, he addresses the three capabilities organizations need to maintain pace with the level of today’s digital disruptions. These three capabilities are:

  1. Continuous Improvement
  2. Transformation
  3. Reinvention

Tompkins emphasizes that one of the keys to the success of Alibaba and to the 11/11 Global Shopping Festival is Alibaba’s strength in all three of these capabilities. Alibaba’s culture and Jack Ma’s drive for excellence, results in Alibaba simultaneous pursuit of continuous improvement, transformation, and reinvention. This bold, agile, innovative and forward-looking evolution of the Alibaba business is one of the most exciting aspects of the tremendous success of Alibaba.

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