Alibaba's Tmall Innovation Center uses data to help sellers develop products

In 2009, Alibaba founder Jack Ma launched Taobao Mall, an online platform for local businesses to sell in mainland China, Hong Kong, Macau, and Taiwan.

It was then rebranded as Tmall.com, and in 2014, Tmall Global was introduced to encourage foreign brands to enter the Chinese ecommerce market.

With more than 600 million users on its platform, Tmall has an abundance of data on consumer buying habits and sellers' marketing strategies, and decided to put this data to use in 2017.

The Tmall Innovation Center (TMIC) was stood up in April last year to be Tmall's dedicated research and development (R&D) arm as a result.

Speaking with media ahead of Alibaba's 11.11 Global Shopping Festival in Shanghai on Saturday, head of TMIC Duain Ling explained that the premise of TMIC is to use the different data resources it holds on more than half a million buyers, and develop new products in partnership with sellers to curate offerings that customers actually want.

In addition to having more than 600 million users shopping on its sites, Tmall also boasts a pool of geographical, on-demand delivery, and logistics analytics. Combined with data that sellers have on products purchased, the age of the customer, and information on the likes of cart abandonment, Ling explained that the information at the TMIC's disposal is enormous.

Procter & Gamble, Unilever, Estee Lauder, Shiseido, Mars, Mattel, Johnson & Johnson, L'Oreal, and Samsung are among the 80-plus companies to partner with TMIC on new product innovations so far.

TMIC has also formed an alliance with 10 market research firms, including Nielsen, Ipsos, Kantar TNS, GFK, Euromonitor International, and AdMaster. Under the alliance, the companies have opened up analytics and research methodologies to one another, with Ling explaining that this allows for richer and more precise consumer insights, shortening the time and costs required for brands to incubate new products.

Focused initially on cosmetics and fashion, TMIC has worked with Tmall sellers to create new products that were on Sunday made available to consumers as part of Alibaba's 11.11 Global Shopping Festival.

In September, TMIC and Tmall's watch division developed a report on China's wristwatch market, and, based on the report's findings, invited 50 young designers within Alibaba's ecosystem to create 600 designs. Of these, 50 were selected for concept testing with a small group of shoppers, and the 17 designs selected having been produced by 10 Chinese watch brands -- including Wussa, Geya, and Jonas & Verus -- and were launched on Sunday during the 11.11 event.

Must read: Alibaba generates 149 billion yuan in sales in first 12 hours of 11.11

Another innovation example was a collaboration between TMIC and Mars that saw the confectionery brand use Alibaba's customer and market insights to design a spicy Snickers bar to cater to Chinese consumer tastes.

During the year-long "idea-to-shelf" process, TMIC researched customer preferences, sent out surveys, and used marketing tools to determine pricing, merchandising, and package design for the new product.

TMIC now incorporates 15 industries, and using Alibaba technologies such as artificial intelligence (AI), machine learning, and cloud, TMIC has helped the incubation of more than 300 new products, Ling explained.

According to Ling, TMIC has helped sellers speed up product incubation, slashing lead time by more than half -- down to six months for new offerings. She said TMIC has helped its brand partners to generate targeted market awareness, as well as to meet expectations for future product launches.

"Efficiency is faster and more accurate," an English translation of Ling's presentation claimed. "The data shows that 7 percent of the products available during 11.11 will be thanks to TMIC partnerships."

Ling said it is TMIC's vision to expand the partnerships with more local sellers to increase the efficiency of new product development, as well as to expand the opportunity to global sellers.

Disclosure: Asha Barbaschow travelled to 11.11 in Shanghai as a guest of Alibaba

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