In the run-up for China’s biggest online shopping day of the year,the 11.11 Shopping Festival, Tmall.com is banking on careful analysis of big data to helpvendors better read consumer demand andlogistics partners avoidparcel-delivery bottlenecks.
Oh, and freebies for consumers are also expected to take the 24-hour sale – held Nov. 11on Alibaba Group’s Taobao Marketplaceand Tmall shopping platforms – to new heights. Last year, the 11.11promotion, which is marked by deep discounts on popular consumer goods,became the largest online shopping event in the world when more than RMB 19.1 billion ($3.1 billion) worth of goods were transacted on the day. That beatthe previous 24-houronline sales record of $1.25 billion on Cyber Monday in 2011.
From a modest start five years ago, the 11.11 event has ballooned into a frenzied shopping extravaganza for millions of Chinese online bargain hunters. The event has grown so fast that vendors have been caught off guard, selling out sought-after items early to the chagrin of shoppers, while the sheer volume of orders have at times overwhelmed parcel-shipping services, delayingdeliveries.
This year, Alibaba is hoping to employ “big data” analysis to help its logistics partners ship goods more efficiently. The impetus for a better logistics system guided by data is more important this year as the number of Tmall.com brands participating has doubled compared to last year to more than 20,000, said Alibaba executives at a press conference today in Hangzhou.
“Just increasing the delivery speed by a few hours, and we are not even talking about half a day, will have a big impact on the logistics flow,” said Tan Biao, director ofAlibaba Group’s logistics business unit.
Tmall.com will share data with its logistics partners through an online “dashboard” that will allow them to identify potential choke pointsin their supply chain and plan deliveries accordingly. The company is also working with the China Metrological Administration to provide up-to-date weather information to shippers.
“The big changes in the logistics industry are already starting to happen this year, in the future this will have an even greater lasting impact on the industry,” Biao said of big data applications.
To prepare for the event, Alibaba’s logistics partners will build or renovate more than 150 distribution centers, increase storage and warehouse space to more than 2 million square meters, and increase hiring of logistics service personnel by 60 percent compared with 11.11 last year. Alibaba will also increase the capacity of its Taobao sites, Tmall and Taobao Marketplace,to handle international traffic, especially traffic from Hong Kong, Macao, Taiwan and Southeast Asia, to make it smoother for those shoppers to participate in the shopping festival.
Big data will also be used to analyze customer shopping preferences during the sale in order to display toshoppers brands or products that they may like based on their browsing history and what is in their shopping cart. In an effort to entice shoppers even more, Tmall.com will dole out RMB 300 million worth of digital “red packets” (rebates)to shoppers for the event.
Users will be able to downloaddiscount coupons wirelessly and encourage friends to download them using Sina Corp’s popular microblogging platform, Weibo. April this year, Alibaba Group brought an 18 percent stake in Weibo and subsequently integrated Taobao with the platform to make it easier for Weibo users to buy from Taobao sellers.
“Increasing sales turnover is not our sole purpose,” said Alibaba Group Vice President Steve Wang. “We hope that the 11.11 activity can ultimately help our users and the industry to expand. It will also help brands attract more fans and get to know their target customers more intimately.”
Alibaba Group will also increase its network bandwidth to 5 terabtyes, up from 2.1 terabtyes last year, to handle the expected increase in traffic on Nov. 11.