Tmall, Alibaba’s premier B2C e-commerce platform, has kicked off its 6.18 Mid-Year Shopping Festival to stimulate China’s consumption engine and help global brands capture new post-covid consumer behaviors and trends.
Retail in Asia had the pleasure to interview Liu Bo, Alibaba Group Vice President and General Manager of Tmall and Taobao Marketing and Operations.
More commonly known by Alibaba colleagues as “Jialuo,” Liu Bo graduated with an EMBA degree from Hong Kong University.
Recently, we managed to ask him a few questions regarding latest shopping festival 6.18.
According to Kantar research, Tmall is the number-one shopping destination for the 6.18 shopping festival. This year, merchants participating in this annual campaign have doubled from last year.
Of course, we also took the chance to ask him about the evolution of the Group and his views on the current situation.
RiA: The recent 6.18 shopping festival is just one recent addition to the many festivals you run throughout the year, but Alibaba is taking a specific approach to remain close to its brands. Can you tell us more?
Liu Bo: The pandemic is accelerating digitization, and we are working solutions to empower our partners. If you look at the 6.18 shopping festival, over the years, including this year, Tmall has become the go-to platform in terms of scale, participating brands and consumer mindshare. That is because we are not simply focused on just short-term gross merchandise volume. Our goal is to create value for customers by boosting engagement, enhancing brands’ operations, accelerating brands’ digital transformations and supporting them so they can capture opportunities that emerge from the changes of behavior brought on by the pandemic. We are always looking to employ our technology and know-how to help our brand partners succeed and grow long-term.
Following kickoff, GMV in the first 10 hours was 50% higher than the same period last year. We have highly visible brands actively participating. Apple is offering special promotions on a range of products, including the new iPhone 11, exclusively through its flagship store on Tmall. GMV of all models of iPhones sold on the platform surpassed RMB500 million within the first five hours of the event.
Tmall is also the main engine to drive the digital transformation of brands and fulfill new consumption needs post-COVID.
SEE ALSO : Tmall gets ready for 6.18 Shopping Festival
For example, during this Tmall 6.18 shopping festival, merchants are using Tmall Flagship Store 2.0 to engage consumers in new ways, either through livestreaming, gamification or offering 3D virtual shopping. Consumers are able to try on shoes and makeup via augmented reality. We are seeing a promising performance so far. On the first day of 6.18, the GMV generated through livestreaming hit RMB 5.1 billion. The popularity of Tmall Flagship Store 2.0 is shown by recent data that merchants with the latest upgrade achieved GMV three times more than others on the platform in March.
RiA: Alibaba Group is a key player in the retail industry and over the years has been building an entire ecosystem, from logistics to media, from cloud services to mobile payment, from pure marketplaces to social commerce platforms. How would you define this approach and how does it fit into the retail sector?
Liu Bo: The Alibaba Business Operating System gathers Alibaba’s unrivaled capabilities in supply-chain management, cloud computing, logistics, marketing, retail and mobile payment to provide consumer insights, allowing businesses to more precisely forecast and target consumer preferences.
For brands and merchants, we have linked up our business units in a smooth way through back-end systems and front-end stores to address and eliminate their pain points with consumers, making it easy for them to do business anywhere and increase touch points with consumers. And for consumers, it no longer matters which of our apps you are using, each gives you an onramp to access the whole of our digital economy. Consumers can easily browse and shop products they liked, enjoy the rich content and share, get deliveries on items they have purchased online and complete payment – all on the same ecosystem. Some might call this the future of retail, but inside the Alibaba ecosystem, it is retail’s present. It is just a better, more-pleasant experience to be able to live the lifestyle you choose in a digital environment that is frictionless and meets nearly all your needs.
We see that shopping in China is a highly social activity and an element of the new lifestyle emerged. Shoppers want to be engaged, educated and entertained. Through livestreaming, games, coupons and other technologies and options, we provide them with all of that. But let’s also not forget that offering the best array of goods and services and great deals bring consumers, merchants and brands together. That is what we strive to do on all our platforms.
RiA: New retail was considered a revolutionary vision when Jack Ma first coined the term. Today, it is a given. Do you agree?
Liu Bo: Yes. That is very true. What once was revolutionary is now becoming the norm, largely because of Alibaba. But it is easier said than done, and it is still very early days for this, at least in China. Remember that online retail penetration is still only around 25% or so nationwide, so there is still great potential for companies to bring their businesses online.
And for those brands which already have online presence, Tmall offers an array of digital tools, such as livestreaming and VR shopping, to further their appeal to broader audiences and demographics. For us, that is an imperative to continue driving the digitization of business. It’s not just good for a company, because it makes operations more efficient and enables them to reach a much-broader, far-reaching customer base and expand their market reach. It’s also good for the consumer, offering more choices, and can help the growth of the entire retail sector and expand the broader economy.
In the recent lockdown, we had seen more and more consumers getting comfortable with taking care of their daily living needs and work requirements through digital means during the pandemic. Shopping online has become a habit for more people and in more product categories. We believe this is the new normal that will stay even after the pandemic is over.
Tmall 6.18 presents a path for brands to reconnect with customers, regain growth and capture opportunities emerged from the pandemic. We have worked with a lot of merchants to sell and promote not just products of the current season, but also items from previous spring and winter seasons. For smaller factories, we leverage our C2M platform, Taobao Deals, to meet their manufacturing capabilities with market demands and keep their businesses floated.
RiA: Over the years, eCommerce has moved from being the place where to find discounted products to a venue for brands across categories. What does Tmall stand for today?
Liu Bo: Today, if you are a Chinese or international brand, Tmall is the online platform on which to sell, and consumers shop there because they can trust they are seeing the best, the latest and widest selection of name-brand products, new product launches, special or limited editions and other deals you would not find anywhere else.
On Tmall Luxury Pavilion, we work extremely well with brands, including some of the world’s top names in fashion. Close to 180 luxury brands with flagship stores on the platform are participating this year’s 6.18 campaign, nearly double the amount from 2019 11.11 Global Shopping Festival. Burberry, Montblanc, Cartier and Michael Kors are offering customized special edition items co-created with Tmall just for 6.18. Coach, MCM and Theory are participating in the campaign for the first time, and all recently launched outlets on Tmall Luxury Soho, a newly launched service targeting young Chinese luxury shoppers.
There is a real caché for these brands on Tmall, and it gets more and more attractive. We launched Tmall Flagship Store 2.0 last year, allowing brands to be innovative and express themselves and engage with their loyal customers the way they want in a virtual world. We bring them strong customization options, the newest technologies and unparalleled analytics to help them better understand Chinese consumers, what they like and their desire to discover the newest and coolest brands and upgrade their lifestyles.
With vast market knowledge Tmall has, Alibaba has rolled out the Tmall Innovation Center (TMIC). Alibaba Group’s product-development unit, Tmall Innovation Center allows brands to tailor its products and marketing strategies specifically for Chinese consumers. TMIC has worked with brands such as Sony, Hasbro, Unilever, Mars, Mattel, Nestle, Mondelez L’Oreal, Maserati, Amorepacific Group and Shiseido.
RiA: The latest partnership launched between Luxury Pavilion and Richemont, how is it going?
Liu Bo: The announcement in 2019 unveiled the partnership between Richemont and Tmall. Richemont maisons, including Cartier, Piaget, Montblanc, launched flagship stores on Tmall Luxury this year.
We have seen a record level of activity from luxury brands, including those time-honored names from Richemont; there are close to 180 participating labels, including Cartier and Montblanc, Chanel, Burberry, and Balenciaga, and 37 brands are participating in 6.18 for the first time. Online consumption has seen a post-pandemic revival since March, and the sales rebound that we have observed on Taobao and Tmall has been very encouraging.
RiA: All eyes are on China as it is the first country recovering from the COVID-19 crisis. Is so-called revenge spending here to stay, or is it just a short-term phenomenon? What patterns have you seen forming in recent months? And while China was on lockdown, what patterns did you see from Chinese shoppers?
Liu Bo: What we have observed over the past months is that the pandemic has changed the e-commerce landscape in China on two fronts: firstly, the increasing e-commerce penetration into new categories, from apparel to the grocery sectors. Merchants participating in this annual campaign doubled from last year. And on the other hand, we are seeing older people, less-experienced internet users and consumers from rural regions starting to shop online, so user penetration of e-commerce is growing. We believe these structural changes are here to stay. Buying daily necessities online has become a habit for many.
The kickoff of 6.18 is showing positive signs. Its GMV in the first 10 hours was 50% higher over the same period last year. It has become the engine for brands and merchants to accelerate their growth in the post Covid-19 era. It is not a short-term phenomenon. Consumption has just started getting to back to normal, and the overall consumption upgrade of Chinese consumers is an irreversible trend.
The lockdown also accelerated the digitization of enterprises’ operations. Livestreaming became a lifeline for traditional retailers and even spread very widely into the world of offline, brick-and-mortar business. Daily active merchants using Taobao Live grew 88% year-over-year for the three months ended March 31, 2020. During this 6.18, over 10,000 offline stores are hosting livestreaming sessions, with over 50,000 offline salesperson becoming livestreamers.
RiA: Post COVID-19, how does retail look to you?
Liu Bo: For overall retail in China, the experts are already seeing a bounceback from the COVID-19 lockdown period and are forecasting a return to more-normal levels later this year. Tmall online physical goods GMV saw a strong recovery in April and continue to further improve in May. Similarly, Ele.me food delivery GMV growth turned positive in April as lockdown measures eased, restaurants began reopening and people began returning to work in China.
This year’s Tmall 6.18 Shopping Festival is the biggest shopping campaign Alibaba has held since the outbreak in China and I can tell you that both the overall trend line – and the initial presales of this campaign, with the records that have already been broken – are pointing upward. That’s how retail is doing. On what it looks like post-pandemic , we need to look at the revolutionary changes that began during the pandemic. Foot traffic into stores almost halted, but merchants needed to find a new way to reach customers and generate sales. That’s where the Alibaba Digital Economy, backed by very strong and innovative technology, was able to offer quick and pragmatic solutions. To help merchants on our platforms stay in business, stay liquid, we rolled out a series of relief measures to mitigate the effects of the pandemic on their business.
We saw a surge in livestreamed broadcasts by brands looking to stay in touch with their customers, keeping the engine of commerce going, even in the darkest days of quarantine and lockdown. Post-pandemic, what we are seeing is a fundamental long-term change in consumer behavior, largely as an outgrowth of the virus situation. Older people, for example, who used to spend their mornings at wet markets, switched to online ordering of fresh fruits and vegetables online while under quarantine.
SEE ALSO : Alibaba to launch Luxury Soho
We believe the fundamentally change will stay on, which makes brand’s digital adoption and transformation a necessity. We are prepared to help large and small businesses across a wide spectrum of industries achieve the digital transformation they need to survive this difficult period and eventually prevail in the new normal.