Alibaba Group and Suning, one of China’s largest electronics retailers, plan to spur the growth of Chinese and international consumer electronics brands over the next three years by investing in online-to-offline (O2O) retailing.
Alibaba and Suning will work together to build out an O2O, or “omni-channel,” network combining the former’s online retailing assets with the latter’s physical stores and distribution facilities to make purchasing of consumer electronics and home appliances easier for consumers, officials for the companies said at a June 1 press conference in Beijing.
The goal is to help brands including Haier, Samsung, Xiaomi and Lenovo—all of which sell products through Alibaba’s online shopping websites and Suning outlets—more than quadruple their sales on Alibaba platforms over the next three years, said Alibaba Group CEO Daniel Zhang. “This can be achieved by integrating the online and offline sales channels under a digitalization process,” Zhang said.
Alibaba and Suning began working together on omni-channel retailing last year after Alibaba agreed to invest RMB 28.3 billion($4.63 billion) for a near 20 percent stake in the bricks-and-mortar retailer. Suning’s network of 1,600 stores and 5,500 after-sales service centers are linked with Alibaba’s online platforms, and Suning’s distribution network, which includes 4.55 million square meters of warehouse space, is used to deliver products purchased online by consumers via Alibaba’s Taobao Marketplace and Tmall.com shopping sites.
Working with Alibaba’s logistics affiliate Cainiao, Suning and Alibaba currently offer 12-hour delivery of appliances and consumer electronics in Beijing, Shanghai, Guangzhou, Hangzhou, Shenzhen and Nanjing.
Alibaba and Suning said they will also support electronics brands by allowing them to leverage consumer data on Alibaba’s 423 million annual active buyers and Suning’s 250 million members. Big data technology can enable more targeted sales and marketing campaigns and even provide insights that allow electronics manufacturers to make products that better meet consumer needs, the companies said. Using consumer data, German electronics company Siemens launched a refrigerator customized for Tmall users in March and Chinese appliance maker Midea in May began selling a rice cooker that was designed partly based on Tmall data.
“We build a bridge between brands and consumers by leveraging data,” Zhang said.
International and domestic brands joining the Alibaba-Suning support program, called the Super Brand Alliance, include Midea, Haier, Samsung, Hisense, Huawei, Xiaomi, Lenovo, Siemens, Sony, Skyworth and Canon.