How Alibaba uses Data Analytics and Insights to improve every Customer’s Shopping Experience

Imagine if you could harness the predictive analytical power of a company like Amazon to determine what products and services your customers were likely to buy, based solely on data collected from the previous behaviour.

In today’s digital age where customer data underpins commerce and insights can predict decision-making, having the right information collection and analysis systems can lead to significant business success. Through the power of data, businesses can now gain incredible foresight into challenges and then determine the best strategies to solve them, especially when it comes to customer choice.

Nothing proves this more than the eCommerce industry and large organisations within it, like Amazon and Alibaba.

But to take full advantage of this approach, it’s important to optimise data analytics and insights systems so you can identify opportunities and develop smarter strategies.

Let’s have a look into data analytics and discuss how Alibaba applies it successfully to gain an incredible competitive advantage in the largest marketplace in the world.

What is data analytics?

Data analytics refers to the process of analysing raw data to draw valuable conclusions. Today, this involves examining large amounts of data (referred to as ‘big data’) to uncover hidden patterns, correlations and other insights. For many large commercial operators like Alibaba, the application of data analytics incorporates AI, machine learning and an evolving algorithm.

It’s predicted that the digital world of data will grow by 61% to 175 zettabytes in 2025, and that eCommerce will be a major contributor to this.

As such, big data analytics in eCommerce will play a key role in not only helping companies better understand their customers, but also forecasting consumer behaviour patterns, improving the online shopping experience and increasing sales revenue.

Data analytics can help identify your customers’ buying habits in relation to market trends, preferences and the present business landscape. Through this, you can effectively adapt suitable marketing strategies that will suit customer needs, develop relevant product mixes, assign the perfect price points and provide excellent service.

The importance of data analytics for eCommerce

The number of digital buyers worldwide has significantly increased from 1.66 billion in 2016 to 2.14 billion people in October 2021. With online shopping becoming the new normal for people today, it is expected that this number will consistently grow, along with the ever-evolving digital marketplace.

As big data in eCommerce includes countless categories of customer information including names, addresses, contact details, past purchases, shopping cart contents and much more, data analytics allows merchants to track users’ buying patterns and behaviours over time. Through deep data analytics, they can connect the dots to determine the most effective ways to convert general browsers into repeat buyers.

As online and digital transformations shift the business landscape, retailers are now becoming more aware of the crucial role of collecting, analysing, and translating customer data into competitive advantages.

Alibaba is a shining example of a multinational retail company that has successfully utilised the power of data analytics and insights to make them one of the world’s largest online commerce businesses.

How Alibaba revolutionised the retail space with data analytics

Since its inception in 1999 in China, the Alibaba Group has become a household name globally, establishing its reputation alongside significant success and growth.

Alibaba is not a traditional retailer, as it doesn’t source or hold stock, and its logistics services are performed by third-party providers. Instead, Alibaba is an amalgamation of retail functions in an online, data-driven network of sellers, marketers, service providers, logistics companies and manufacturers. Alibaba does this successfully by leveraging new technologies such as data intelligence and network coordination to bring together thousands of businesses into an ecosystem that is faster, smarter and more efficient than traditional business infrastructures.

Underpinning this entire framework is their Brand Databank, which turns live consumer data into actionable insights by aggregating all the information, analysing it and making it accessible to brands on the platform.

Alibaba’s smart utilisation of data analytics and Artificial Intelligence (AI) is, without a doubt, one of the most significant factors in their success. With data analytics and AI, Alibaba has redefined the overall online shopping experience for not only the Chinese community, but also for millions of online consumers and merchants around the world. They were able to transform the retail space by implementing a range of platform and algorithm improvements that consistently boosts each individual customers’ shopping experience – and the resulting revenue that goes along with this.

While these enhancements may seem subtle, their automatically curated search results and personalised product suggestions, as well as virtual storefronts that display information tailored to individual shoppers based on their unique characteristics and preferences have all become incredibly accurate.

Through the growing use of deep analytics and data insights to predict buying trends and behaviours, Alibaba’s algorithms consistently ensure that people are presented with products and services that they want and need – maximising the sales potential of every user on the platform.

The significant opportunity for Alibaba

According to the company’s recent report, the annual active consumers of the Alibaba Ecosystem across the world has already reached approximately 1.24 billion in September 2021. This includes 953 million consumers in China and 285 million consumers overseas.

The world’s largest consumer group is the Chinese consumer market. From 2000 to 2020, disposable income per capita in China increased by around 700%, with the rapid income increase attributed to their fast-growing economy.

Through Alibaba’s system, live data from Chinese consumers can now be analysed in detail. This information can be used to not only learn about customers, but segment them, enabling more relevant and continuous consumer connection and engagement. With millions of annual active buyers in their China retail marketplaces alone, Alibaba’s real-time data has transformed the way brands do marketing.

Data analytics and smart intelligence is the future of e-commerce

In today’s fast-evolving retail landscape, it’s clear that merchants and retailers will follow Alibaba’s example and shift to online platforms which take full advantage of data analytics and algorithms to gain valuable insights which can help them outperform their competitors.

We also experience the power of data analytics in our everyday lives. Streaming platforms like Spotify suggests songs or playlists based on the recent songs you’ve played, while social media platforms such as Instagram and Facebook present you with suggested accounts and posts all based on your behaviour across their platforms.

Just like what we’ve seen with Alibaba, the power of analytics and AI allows businesses to reach broader audiences and understand them better. This supports you in providing customers with an easier, more personalised, more seamless and more convenient shopping journey than ever before.

But it's not just global giants

Local businesses are also discovering the benefits of predictive analytics.

At White Box, we help businesses gain exceptional insights using the data they already own. Our team of data experts ensure your data is always working to your advantage – improving your business performance.

Make well-informed, data-driven decisions

White Box is highly experienced in providing data strategy, data science and data visualisation solutions.

As your Data Scientists and Strategists, you can rely on us to realise the full potential of your data and help you maximise your business success through advanced and innovative dashboards that can make all the difference.

Get in touch today for your free data strategy consultation. 

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