Alibaba’s Taobao launches platform to help factories digitalise their operations in China

Alibaba’s Taobao launches platform to help factories digitalise their operations in China

The platform will enable companies to better manage raw materials and product inventories.

Taobao, the e-commerce marketplace owned by Alibaba Group Holding, has launched a new initiative to help drive the digital transformation of traditional factories in China using its consumer-to-manufacturer (C2M) system.

The platform will enable companies to better manage raw materials and product inventories based on precise consumer distribution, preferences and behavioural data, Taobao said in a statement on Thursday.

“Stepping up our made-to-order strategy is an ongoing Taobao initiative to diversify product supplies across the ecosystem to meet demand from our consumers and help manufacturers lagging in the digital race to use technology to transform their processes,” said Hai Wang, general manager of Taobao’s C2M business unit. “Manufacturers will benefit from increased efficiency and reduced costs and will be able to generate higher revenues.”

The Taobao Special Offer Edition, which was officially launched on Thursday, will provide a designated channel to manage the process from manufacturing to sales of products.

Made-to-order has been a growing trend in China, particularly in lower-tier cities. The company revealed that during its midyear promotion campaign in 2019, factory clusters in China received 420 million orders, while during last year’s Singles’ Day shopping spree, consumers placed 170 million C2M orders across Alibaba’s marketplaces.

In an interview with the Post after Alibaba listed on the Hong Kong stock exchange in November, chief executive Daniel Zhang said the company was focused on trying to help its partners transform their entire business – including sales, transactions, product innovation, cloud infrastructure and supply chain management.

“Today, because of digital technology, we can enable people and our merchants to do business in a digital way. We are able to help traditional companies transform themselves into a digital, data-driven company,” Zhang said. “That was our mission from day one. We have a huge digital infrastructure and we want to use this for good, rather than just build scale.”

Taobao expects the C2M initiative will bring 10 billion new orders to factories across the country over the next three years while transforming 1,000 manufacturers into “super factories” with output exceeding 100 million yuan (US$14 million) each and driving productivity at 10 factory clusters in China to 10 billion yuan or more.

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Taobao added that the company will assist these factories with product research and development, as well as in promoting their products. Alibaba’s financial arms will provide capital and liquidity to manufacturers.

Apart from the newly-launched Taobao Special Offer Edition, Taobao also has other channels, including Daily Deals and Juhuasuan, to help with smart manufacturing at factories.

Alibaba is the parent company of the South China Morning Post.

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