For Brands, Alibaba Ecosystem Is Gateway to Digital Future

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For Brands, Alibaba Ecosystem Is Gateway to Digital Future

One of the most important challenges facing the next generation of business leaders will be the need to revamp their operations to meet the rapidly evolving digital economy, said Alibaba Group Chairman and CEO Daniel Zhang.

Speaking at the Alibaba ONE Business Conference in Hangzhou last Wednesday, he said that enabling companies to rethink operations for the digital era and to embrace the concept of “new organization” has been a core focus for Alibaba as it helps brands accelerate their digital transformation and drive growth.

“Leaders will not only drive product innovation but, more importantly, will play a key role in embedding innovation within company operations,” Zhang said. “In other words, they would help build innovative organizations.”

The Alibaba Business Operating System, which gives brand partners all the tools available in Alibaba’s ecosystem, was created to help businesses get to such a point. ABOS also underpins the A100 program, which helps key brands accelerate their digital transformation through a customized, wide-ranging service package. Since the e-commerce giant unveiled the A100 initiative in January, partnering brands such as Starbucks and Nestl√© have signed on to deepen their collaboration with the e-commerce giant. A cross-functional team at Alibaba helps to streamline their operations in China and makes it easier for them to utilize services that best fit their needs, whether they’re in the realms of retail, digital marketing, work-flow management, financial technology, logistics, cloud computing or on-demand local services, among others, the company said.

Chinese laundry-detergent Liby, one of the first brands to join A100, partnered with Alibaba’s enterprise chat and collaboration app, DingTalk, to give its internal communications an upgrade, said Kunn Ruan, chief information officer at Liby. The company rolled out a customized version of DingTalk, instantly connecting its tens of thousands of store attendants, salespeople, distributors and drivers. Previously, it would take months for sales directors at Liby’s Guangzhou headquarters to effectively communicate their messages across the wide network of regional staff, distributors and clients, the company said. Some managers now use DingTalk’s livestreaming feature to share important messages, and some even broadcast up to six sessions a day.

“We don’t see DingTalk as just a tool but a means to truly improve our collaboration with upstream and downstream partners,” said Ruan.

Ruan also pointed to a smart logistics feature that has helped Liby’s operations. This feature automatically generates an online chat group when the company receives an order and pulls in all parties involved in the shipment process – such as the distributor, carrier, driver and warehouse provider – so they can quickly respond to any issues that may arise. Drivers can also use their phones to submit delivery confirmations, replacing the traditional paper-based proof-of-payment receipts that can take the company months to process.

The A100 program is part of a new effort made by Alibaba to bring all operating-system solutions into one holistic package, but all of its brand partners can make use of those tools. Eyewear chain Baodao Optical, for example, tapped ABOS to push its digitization efforts forward by integrating its brick-and-mortar branches with Formosa’s online flagship store. Now, the brand’s 1,200 optical shops in China support online purchases. Aside from being able to order frames on Tmall that can be picked up and fitted in stores, customers can also use online vouchers for offline purchases. Baodao was also among the first brands to pilot Tmall’s upgraded online stores, Tmall Flagship 2.0, to give its physical stores an online presence on Mobile Taobao and e-wallet Alipay.

ABOS has also helped Baodao incentivize its staff to provide better service. The brand’s 5,000-plus physical-store staff and close to 2,000 distributors’ employees have all activated DingTalk’s smart shop attendant feature, which allows staff to earn a 3%-10% commission for each online sale. In addition, consumers can use Mobile Taobao to scan a QR code to add a staff member as their private shopping assistant. With this function, shop attendants can continue to engage with customers online and share recommended product links, as well as new perks and deals, even after the customers have left the store.

The brand also leveraged trend insights from Tmall search analytics to determine which product line might soon become a hit so that it could adjust its supply chain and also develop new products to meet consumer demand. While it used to take Baodao anywhere from six months to a year to design and launch a new eyewear product, with ABOS, it can now launch items in just two months, the company said.

Today’s consumers are digitized and always online, said Zhang. And when operational models put them – instead of brands or products – at the center, it gives rise to many new possibilities.

For Zhang, checking out doesn’t signal the end of the consumer experience but rather marks the start of future digital interactions and operations with that customer, he added. “When a digital payment is made today, it’s not checking out but a digital consumer checking in.”

“We are no longer discussing the boundary between online and offline or what is traditional or not. The only difference is whether the business operations are digitized,” said Zhang.

A100ABOSAlibaba Business Operating SystemDigital EconomyDigitization
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