Alibaba Group is helping merchants across its e-commerce platform shake off the cobwebs after lockdowns saw supply chains and consumer demand grind to a standstill.
A measure of normalcy has returned to China’s biggest cities. Still, retailers preparing for this year’s 6.18 Mid-Year Shopping Festival are encountering a host of challenges.
“Ensuring stability of supply chain and logistics amid the uncertainties is the best way to improve consumption sentiment and foster a more positive environment for business operations,” said Alibaba Group Chairman and CEO Daniel Zhang during a quarterly earnings call in May.
Leveraging its entire ecosystem, Alibaba is lending a hand to ensure parcels arrive on time for customers and merchants can pay their suppliers earlier.
The group also rolled out courses and tools to help retailers resolve consumers’ Covid-related complaints as shopping gets underway.
Presales for 6.18 launched in late May: B2C online marketplace Tmall announced a price freeze on 19 million products until July 5, while bargain shopping platform Taobao Deals has one million 10-yuan ($1.5) items on offer.
Offline, Alibaba-owned department store Intime cut clothing prices by 32% and dine-in restaurant orders by half at brick-and-mortar stores in more than 60 Chinese cities.
Retailers bogged down by months of shipping freezes are turning to Alibaba’s logistics arm Cainiao Network for a solution as the main shopping event of the summer kicks off.
Dutch baby formula brand Nutricia Global saw logistics costs more than doubled when Hong Kong was hit by a fifth wave of the virus in early 2022.
Goods worth millions were stuck in the international hub, forcing the brand to place extra production orders to meet deadlines and cap individual orders.
These emergency measures are being rolled out ahead of the 6.18 thanks to Cainiao’s multiple warehouse tool, which has enabled Nutricia Global to decentralize its inventory storage.
The brand transferred its inventory to two warehouses in different provinces on the mainland to ensure reliable order fulfillment and prompt delivery.
“We are expecting 20% sales growth compared to last year’s 6.18,” said James Liu, Nutricia’s Tmall partner.
To help merchants move quickly, the group has foregone its standard two-week escrow period and allowed merchants who participated in the presale period to receive their payments soon after.
“As a start-up, the cash initiative benefits us most,” said Yongpu Hou, founder of domestic coffee brand Yongpu Coffee, in an interview with Alizila.
The coffee brand received presale payments immediately this month compared with a standard 15-day wait. Hou will be able to pay his suppliers earlier as a result and pass the value along the supply chain.
Yongpu Coffee has more than 1.5 million customers on Alibaba’s B2C e-commerce platform Tmall, and the brand expects to see at least 80% sales growth during this year’s mid-year festival.
Meanwhile, international B2C marketplace Tmall Global will deposit payments worth RMB4 billion in the accounts of cross-border merchants as soon as their parcels leave warehouses.
Alibaba rolled out tools ahead of the 6.18 shopping period to make it easier for merchants to address consumer problems and resolve unexpected delays in order fulfillment.
Complaints about shipping problems from shoppers will be automatically rerouted to a dedicated customer service channel on Taobao, Tmall and Tmall Global.
Platform specialists will probe the merchant’s logistics situation. Consumers may take their complaints further if they are not satisfied, but the brand will not receive a negative review.
This will come as a relief to Chinese clothing brand Zhanfang, which prided itself on 100% customer satisfaction on Taobao before the pandemic.
The brand received three customer complaints in April and May – the most they have fielded in the last year – on the back of office closures and a lack of inventory related to the Shanghai lockdowns.
“We felt supported as Taobao is considerate to our real difficulties, and it reduced our loss,” Ruo Du, Zhanfang’s brand manager, told Alizila.