China's Electronics Retailer Suning (Photo : Getty Images)
Merging both online and offline retail, not dividing retail into smaller channels, could be the key to the future growth in retail business, an Alibaba executive said, according to an article by wwd.com.
Alibaba vice president and general manager of North America Lee McCabe made the remarks during a presentation at the Etail West conference in Palm Desert on Thursday, March 2.
"We're very good online, but we think commerce should be one thing," the Alibaba executive said. "Offline [retail] is not having a good time, especially the big box retailers. Pretty much the same is happening in China but we're looking to arrest that."
McCabe said that Alibaba made a large investment with the acquisition of electronics and appliances retailer Suning Commerce Group Co., to enable to make the link between online and brick-and-mortar shopping and make services easier such as product pick-ups or in-store returns.
He added that Intime, a mall operating firm, has similar opportunity. Alibaba bought the company for $2.6 billion in January.
"We're looking to do the same there, merge online and offline and improve the experience completely and make it fun again," McCabe said. He cited Alibaba's popular Singles Day annual sale, which happens every Nov. 11, as an example of "fun". The event came to be known as the equivalent of Black Friday in the U.S.
Last year, about 98,000 merchants participated in the Singles Day event, more than double the 40,000 merchants in 2015. About 82 percent of the bulk of the sales at last year's event, may be attributed to some 657 million orders, which came from mobile users during the 24-hour period, the report said.
Alibaba's first Singles Day, which was held in 2009, earned about $8 million while the gross volume of merchandise in last year's event was worth a total of $17.8 billion, up from $14.4 billion in 2015.
McCabe said, "This will get bigger next year".
Alibaba also experimented on using virtual reality such as in Macy's store, where a shopper can pick an item, find product information and transact.
The company is also working on augmented reality by creating an AR game similar to Pokemon Go, in its TMall app, in which customers can play with the TMall cat and get discount rewards.
To maximize efficiencies, Alibaba has created an ecosystem of companies built into an overall group, which enable it to do business not only on TMall but also in its payment platform Alipay, logistics company Cainiao and Alibaba Cloud.
"We're building scale fast and they all complement each other, and it helps," McCabe added.
