Alibaba adapts for mass customisation shift

Businesses must adapt to survive, says Ma

Jack Ma greets audience at the Women Conference, part of the Alibaba Global Netrepreneur Conference 2017 held in Hangzhou, China.

The internet will have a big impact on manufacturing and supply chains, changing mass production to mass customisation over the next 10 years, says Jack Ma, executive chairman of Alibaba Group.

Mass customisation may be expensive now, but unless businesses turn to it to serve every customer, they will not survive in the next decade, Mr Ma said at the Alibaba Global Netrepreneur Conference 2017.

The current business to consumer model will be supplanted by Consumer to Business, as consumer power, facilitated by the internet, will drive demand for customisation on the manufacturer's end, he said.

"We live in a mobile internet era whereby the internet affects everyone, so businesses should rethink their business models, redefining customers, suppliers and logistics in the supply chain," said Mr Ma.

He said Alibaba would like to facilitate this new ecosystem through cloud computing and data analytics as well as empowering new financial access for sellers and buyers.

"We aren't just helping the Chinese ecosystem, as we aim to mobilise the world by building global financial and logistics infrastructure," said Mr Ma.

Over the next seven years, the company will revamp its logistics system to provide 24-hour delivery in China and 72-hour delivery globally.

By 2036, Alibaba aims to blend offline retail with the internet economy, bringing 10 million companies to its platform, creating 100 million jobs and reaching 2 billion consumers globally. By that time, Alibaba aims for its gross merchandise value to be equivalent to the world's fifth largest economy.

Meanwhile, Chinese technology firms have outlined a vision for a new retail world whereby physical shops and online shopping are blurred.

"The new retail business environment is blurring the offline and online worlds to create more value for customers and greater opportunities for upselling," said Daniel Zhang, chief executive of Alibaba. In order to achieve this new retail environment, business owners need to integrate customer data to gain better consumer insights, he said.

"We will see online players synthesise their abilities to offer products in physical stores, while physical retail outlets will use their brick and mortar shops as an asset to build better customer experiences through their online channels," said Mr Zhang. Currently, online retail accounts for 15% of total retail in China, leaving plenty of room for expansion.

Jun Lei, founder, chief executive and chairman of Xiaomi Inc, the world's third largest smartphone maker, said the company is exploring the possibility of bringing its e-business experience to the new retail business environment by selling products in its own physical retail stores.

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