Food-service giant McDonald’s is leveraging the Alibaba Business Operating System – the e-commerce titan’s one-stop answer to brands’ digitization needs – to beef up its omnichannel presence ahead of the 11.11 Global Shopping Festival.
McDonald’s, already an iconic global brand, and one that has had strong success in China since launching in 1990, said tapping the ABOS solution means more seamless online-to-offline experiences across Alibaba’s universe of apps, offering the brand new touchpoints with its hungry fans wherever they are.
Starting October, more than a billion Alipay users will be able to join the McDonald’s China loyalty program through the app. With a simple login and a few taps on their phones, Alipay users can, for example, preorder a Big Mac to pick up at a nearby store or have it delivered home. A new Alipay feature also allows them to get e-vouchers and special deals from the McDonald’s flagship store on Tmall, Alibaba’s B2C e-commerce site, which the chain also uses to launch engaging branded content, including short videos, livestreaming programs and interative pop-ups.
“Deepening the integration of analytics across channels can help us bring customers a more-seamless experience, whether they’re online or offline, when at our restuarants or at home,” said Christine Xu, vice president and CMO of McDonald’s China. “We look forward to continue working with Alibaba to uncover new demands and elevate the customer experience in even more innovative ways.”
As part of the collaboration, Alibaba will also create a dedicated platform for McDonald’s to access all the analytics generated in its ecosystem to help it better spot emerging trends, improve experiences and strengthen customer loyalty.
Marking 30 years since McDonald’s first entered the mainland Chinese market in 1990, the chain now oversees more than 3,600 brick-and-mortar stores in the country, with plans to open 430 more by year-end. Last year, it served more than 1 billion customers in the country.
Rocket Fuel for Business Growth
Alibaba Group launched ABOS last Janurary to empower traditional retailers to accelerate their digital transformations and sharpen their competitive edge in the world’s second-largest economy. A cross-functional team at Alibaba streamlines internal workflows for partners, helping them harness all the services available in the company’s ecosystem, whether it’s retail, payment, digital marketing, logistics, cloud computing or on-demand local services.
McDonald’s is not the only food-and-beverage brand that has opted into ABOS to expedite its digital transformation and growth. Among the first brands to pilot the ABOS solution was Starbucks in 2018, when the Seattle-based coffee company announced a new virtual store that could be accessed across Alibaba’s apps, and that Ele.me, China’s leading on-demand delivery service owned by Alibaba, would be its exclusive delivery partner for the market.
Starbucks has become one of the biggest success stories of an American brand in China, and its quickness in adapting to the changing consumption pattern and lifestyle of Chinese consumers has played a role. Since opening its first China store in 1999, it has enticed the nation of committed tea-drinkers to embrace coffee. Now, Starbucks is the country’s largest coffee chain. It aims to operate 6,000 stores in 230 cities by 2022, up from about 4,400 stores today.
But the coffee chain isn’t stopping there. It wants to take its consumer reach to the next level in China, so the Starbucks experience doesn’t end when consumers walk out of its brick-and-mortar stores. That’s where its collaboration with Alibaba comes in: Ele.me’s fleet of riders now supports Starbucks deliveries countrywide, while also helping ensure food quality for the brand by using special temperature-controlled containers and spill-proof packaging. Starbucks is also working with Alibaba’s New Retail-powered Freshippo supermarkets to pilot self-serve coffee kiosks and further expand the reach and speed of its delivery service. Other recent collaborations include Alibaba A.I. Labs’ voice-ordering technology – which allows people to order drinks through the Tmall Genie smart speaker – and an in-store pick-up feature that supports preordering across Alibaba’s various mobile apps.
Exceeding Expectations in the Digital Era
ABOS is all about helping brands strengthen their digital capabilities – whether they’re big and established companies, or small and medium-sized enterprises. Digitization for brands means being able to unlock new forms of demand and new levels of engagement. For some companies and brands, it means a complete retooling of their operations and digital presence. For others, a simple tweak to the way consumers engage with their apps could mean an extra daily cup of coffee or a few more products in the basket at checkout.
“The consumption we see today is just the tip of the iceberg. We’re only scratching the surface of what’s possible when it comes to turning untapped demand into consumption,” said Alibaba Group Vice President Jet Jing, who heads the Alibaba Business Operating System program.
Beyond food and beverage brands, companies from multiple other sectors recognize the value of going even more digital than they were before. Today, a growing number of enterprises have their own customized suite of integrated solutions with Alibaba – or their own “ABOS” – including BMW, Bosch, Total, L’Oréal, Nestlé and Proctor & Gamble.
And none of these brands tap Alibaba’s ecosystem exactly the same way, said Jing. They each have different, specific needs. ABOS is about identifying brands’ pain points and spotting untapped opportunities and coming up with a tailored solution to help meet their needs, fulfill new ones and grow their reputations, customer base and business in China.
For example, multinational consumer-goods company Unilever taps virtually all the features of ABOS. The model allows the fast-moving consumer goods giant to mobilize Alibaba’s resources as end-to-end integrated solutions. Last week, the company piloted a new artificial-intelligence-powered recycling device with Alibaba that could scan garbage to determine whether it’s plastic. It then collects recyclables to process and reuse, including repurposing them into new product packaging. The first batch of devices has been rolled out in Shanghai and Hangzhou, at select communities, university campuses and Lingshoutong mom-and-pop shops.
Through ABOS, Unilever will also be able to interact with consumers across platforms, including when they buy and use the product up to when they recycle it, and are rewarded with Alipay Ant Forest‘s green energy points or e-vouchers to redeem for another Unilever product on Alibaba’s platforms.
L‘Oréal, the world’s biggest cosmetics company, which owns labels such as L’Oréal Paris, Lancôme and YSL Beauté, makes use of ABOS to deepen its engagement with and better meet the demands of China’s young beauty mavens. Alibaba’s digital infrastructure supports L’Oréal’s marketing and product innovation: The brand teamed up with Alibaba’s product-incubation unit Tmall Innovation Center to build a “knowledge library” of industry insights and trends, spanning skincare, men’s and women’s cosmetics, hair care and fragrances.
Based on TMIC’s insights on lipstick-color trends, Maybelline is developing a new lip product slated to launch early next year. As it doubles down on beauty tech innovations, L’Oréal has also deeply integrated its augmented-reality technology, ModiFace, with the Tmall app to improve the shopping experience. Consumers can access the AR-powered feature while watching livestreams from YSL Beauté, for example. ModiFace now supports more than half of all of the beauty giant’s makeup offerings on Tmall.
Last month, BMW announced it’s leveraging Alibaba’s ecosystem to make it possible for Chinese consumers to view, buy and maintain cars across apps, such as Tmall, Taobao, Alipay and Amap. In August, French energy giant Total also began partnering with ABOS, which would provide the digital infrastructure for its China service stations, car care and lubricants businesses, helping accelerate the company’s retail footprint and reach more customers in China.
“Ours is a radically consumer-centric concept,” said Jing. “At its core, ABOS is about offering companies an actionable approach to truly turn their consumer-first ethos into a reality.”
He added that Covid-19 highlighted the need to radically digitize at every level. It accelerated the determination of companies everywhere to focus on innovation. Digital tools were no longer just “nice to have,” but have proved imperative to survival and winning future consumers. Alibaba’s now expects its digital infrastructure to evolve as more brands co-innovate with ABOS, giving rise to even more end-to-end solutions tailored to the needs of each industry.
“We’ve seen how the power of innovation can unlock hidden demands and deliver value to consumers in new ways. The goal is to work with companies, big and small, to take innovation to the next level, and the possibilities are endless,” Jing said.
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