Alibaba's Daniel Zhang talks emerging DTC brands and omnichannel challenges

Alibaba Group Chairman and CEO Daniel Zhang has predicted the rise of a new generation of digitally native consumer brands, where designers tap data analytics to meet changing consumer trends.

Speaking at the virtual Global Summit, hosted by The Consumer Goods Forum, Zhang noted that the coronavirus pandemic has transformed how people build businesses.

He sees D2C models coming to the fore. “I strongly believe this is going to happen elsewhere in the world, but China is obviously taking the leading position and moving very quickly, especially for new brands’ development and the D2C model,” he commented.

Alibaba Group Chairman and CEO Daniel Zhang predicts the rise of a new generation of digitally native consumer brands, where designers use data analytics to meet changing consumer trends. https://t.co/qVa1FtQqEM
— Alibaba Group (@AlibabaGroup) June 25, 2021

Retailers are also ramping up their integration of digital sales channels with bricks and mortar stores. Alibaba plans to develop new retail formats in a range of categories, including furniture and fast fashion.

“Today in China, there are many, many emerging brands,” said Zhang. “They quickly react to people’s demand and create new products and develop new categories.”

He added: “China is actually moving very quickly [in this regard]. In the rest of the world, I think young brand incubation actually still takes some time because penetration still needs to be improved on the consumer side.”

Omnichannel challenges

As coronavirus restrictions are eased ad economies open up around the world, many traditional retailers are still figuring out how to best leverage their physical stores now that consumers’ shopping habits have changed.

“It’s a common challenge for many, many, retailers,” said Zhang.

He stated that Alibaba has been helping traditional retailers with digital capabilities to help them create incremental sales opportunities away from stores and migrate to the cloud.

It has also worked with clients to integrate offline and online models. At Tmall, 20% to 30% of online orders are fulfilled by physical stores, either by consumers picking up their purchases at the stores or the stores shipping them to consumers’ homes.

“We need to give people a real reason to go back to stores, in terms of experience, in terms of service,” Zhang observed.

“This integrated model could be the future of retail. It’s not only about a standalone sales opportunity; it’s all about redefining the customer experience that goes beyond their expectations.”

6.18 shopping event

Alibaba Group’s 6.18 mid-year shopping festival officially came to a close this week.

The event, which stretched from 24th May to 20th June, is pitched as an important bellwether for Alibaba’s 11.11 festival as brands pilot and fine tune their strategies ahead of November.

2021 highlights included a record 250,000 merchants and brands participating, bringing more than 13 million products in front of Chinese consumers.

Further details here.