Alibaba Group Holding Ltd. sees a future in retail that is both digital and in real life.
“We’re very good online, but we think commerce should be one thing,” said Alibaba vice president and general manager of North America Lee McCabe during a presentation at the Etail West conference in Palm Desert Thursday. “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.”
Alibaba took a large ownership stake in electronics and appliances retailer Suning Commerce Group Co., where it thinks it can make the link between online and brick-and-mortar shopping by making actions such as product pick-ups or in-store returns easier “with all the goodness that online has to offer with data [and] breadth of product,” McCabe said.
There’s a similar opportunity with mall operator Intime, which Alibaba bought in January for $2.6 billion.
“We’re looking to do the same there, merge online and offline and improve the experience completely and make it fun again,” McCabe said.
One example of “fun” would be the company’s well-known Singles’ Day annual sale, which is aimed at being the equivalent of Black Friday in the U.S.
The sale, which happens every Nov. 11, involved 98,000 merchants last year, up from 40,000 in 2015. The bulk of those sales, 82 percent, came from mobile with some 657 million orders generated during the 24-hour period.
The first Singles’ Day in 2009 yielded about $8 million, while last year’s Singles’ Day gross merchandise volume totaled $17.8 billion. That’s up from $14.4 billion in 2015.
“This will get bigger next year,” McCabe said.
The company’s also playing with virtual reality. One example was the Macy’s store it developed via virtual reality, where a shopper could pick product up, find item information and transact. Augmented reality is another space the company is working in having created an AR game akin to Pokemon Go in the Tmall app where customers could chase around the Tmall cat and win discounts.
Part of Alibaba’s leg up in the marketplace is the ecosystem of companies baked into the overall group that allows it to shore up efficiencies. So not only is there commerce happening on sites such as Tmall, but there’s also the payment platform Alipay, logistics arm Cainiao and Alibaba Cloud.
“We’re building scale fast and they all compliment each other, and it helps,” McCabe said.