Jack Ma promotes “new retail” as Alibaba's e-commerce platforms snatch new victory in 11.11
Alibaba set a new sales record on its Single’s Day shopping bonanza on November 11, known as Double 11 or 11.11. It is reported by local Chinese media that just a few minutes after 1 pm that day, the sales volume on Tmall and Taobao, Alibaba's two major e-commerce platforms, had surpassed last year’s total sum of 120.7 billion yuan.

Jack Ma, the founder of the Internet-tech giant that has transformed the country's retail industry, however, did not crow about his success this time. In an interview with CCTV, China's national broadcaster, he warned that the booming industry may begin to tread on a downward track in five years' time. “Till then, what should we do?” In Ma's belief, through “technology, data and innovation, a 'new retail' mode that engages both online and rejuvenated offline retail would lure consumers.

By the midnight of November 11, Alibaba’s tally indicates the amount of sales on all its e-commerce platforms shot to 168.2 billion yuan, recording a 39 percent annual growth. 90 percent of transactions were made through mobile terminals and 812 million logistics orders from merchants spanning 220 countries and regions had been made.

The Double 11 shopping spree has set a string of records for Alibaba and its e-commerce rival JD.com, which kicked off a similar event Joy Buy on November 1 to mount a competition during the same period. Just an hour and a half after the midnight when the consumers commenced on the online shopping spree during midnight, a deposit was put on an Aston Martin limited-edition yacht for 17 million yuan, recording the highest unit price in the history of cross-border imports. In the morning of November 11, both Alibaba and JD.com topped sales of 100 billion yuan.

Previously, it was widely reported that Alibaba had taken initiatives to engage overseas brands and consumers by promising free delivery to those in the Hong Kong, Macao and Taiwan regions. At the end of the day, it is calculated that global online buyers made 1.48 billion of payments, increasing 41 percent year-on-year. It means that on average, every Chinese has settled at least one payment during the day on Ali Pay.

Meanwhile, JD.com announced that transactions worth 127.1 billion yuan had been made between November 1 and 11, the Joy Buy festival period. It is notable that 85 percent of the orders placed on the day of November 11 had been delivered from warehouses.

Although JD.com has long boasted its shipment to be more efficient than its rival, Alibaba is reported to have resorted to robots to speed up its delivery. According to South China Morning Post which is owned by Alibaba Group, “12 minutes and 18 seconds was all it took for the first delivery from Singles' Day to arrive at the doorstep of a resident surnamed Liu in Shanghai..” Liu is known to have bought biscuits and snacks from the Tmall Supermarket, and then, his order was sent to the nearest warehouse, where automated robots used less than four minutes to find the purchased items and finished packaging, well beyond the efficiency of humans.

Zhang Yong, the CEO of Alibaba Group, told the media they've made significant progress in logistics in the past five years. According to him, 3 million warehouse staff and delivery men were employed, and by 4 pm of November 11, buyers from 340 Chinese cities including those in Taiwan, Hong Kong and Macao received their packages ordered the same day, among them, Shanghai, Chengdu and Guangzhou taking the top three places.

Although the volume of transactions is getting bigger and bigger, the growth rate of transactions made has actually moderated. Compared with the sales of 120.7 billion yuan in 2016, the 2017 shopping spree registered an annual growth of 39 percent, while in 2016, 2015 and 2014, the year-on-year increases respectively stood at 32, 59 and 63 percent.

The Paper surveyed some consumers in the afternoon of Singles' Day, and most of them said they're now getting more sensible when it comes to the 11.11 shopping spree. A lady surnamed Tang told the Paper the main reason for her increased consumption amount compared with last year is that she is getting a higher pay.

In the interview with CCTV, Jack Ma said that online shopping could maintain rapid growth in the next three to five years, while he's not quite sure about the situation after that. Because of that, Alibaba has already embarked on a series of projects to “remake” traditional offline stores, in a bid to enrich the real-world shopping experience with technology and convenience.

Projects hinting at Alibaba's reform efforts includes its offline Hema grocery store featuring quick and free delivery service, its first physical mall - More Mall - and unmanned convenience stores that have attracted widespread attention from common consumers.

“The 'new retail' is a combination of online and offline, a match of human, goods, warehouse and delivery. Over the past 10 years, online shops have gained rapid growth. But like air force, they're required to work with those on the ground,” said Jack Ma, noting it is not beneficial for online retailers if offline shops fail to succeed.

It was earlier reported by the Caixin Magazine that the year 2017 marked the start of Alibaba Group's “new retail” era — a phrase the firm has coined to refer to its strategy to blend online, offline, logistics and data units across a single value chain.

On the track, Alibaba is moving fast into offline scenarios to help “remake” traditional retailing. It is reported that More Mall, Alibaba's first offline mall, is now exhibiting a number of brands that are on sale on Alibaba’s e-commerce platform Taobao.

Alibaba has also brought its “new retail technologies” to More Mall, including high-tech makeup-testing mirrors and virtual fitting rooms, said Caixin, citing unnamed sources with knowledge of the matter. Alibaba unveiled these technologies in June in what it called a “New Retail Interactive Store,” in a shopping mall in Hangzhou.

“We're now working with Su Ning, Intime Department Store and Bailian Group (all top retailers in China), in bid to use our technology, data and innovation to rejuvenate the offline retailers and use their advantages,” said Jack Ma.

“60, 70, 80 percent of retailing should be new retail. Without technology, data and innovation in place, and the supply-side reform to draw consumers, there is no future for the traditional offline shops and also for online retailers,” the reformer which has transformed the country's retailing industry said.

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