Chinese internet conglomerate Alibaba singlehandedly created the world’s biggest online shopping event known as Singles Day. Now it’s looking to change how people shop, but this is not without its challenges, reports the BBC’s Tessa Wong.
Every year on 11 November, millions in China and across Asia engage in a massive shopping spree online. Many visit Tmall and Taobao – Alibaba’s answers to Amazon.
Traditionally customers do their shopping on their websites and mobile apps. But this year Alibaba appears to be piloting several new concepts aimed at changing the way people shop.
One highlight is the Buy+ virtual reality (VR) experience.
Customers either use a VR headset or buy a 1-yuan (12p, $0.15) cardboard frame – similar to Google Cardboard – to slot in their smartphones and explore virtual replicas of stores such as Macy’s and Costco.
Those with headsets can “walk” around the shop, “pick up” items to examine them virtually, and make instant purchases by staring at floating buttons.
Observers say VR shopping could take off as it gives online shoppers a more immersive experience – and Alibaba is the first to do it in a big way.
“If brands could do it themselves, it would encroach on Alibaba’s eco-system. So this way the company is pre-empting that and building their own VR mall to keep these brands in their eco-system,” says Jack Chuang of OCC Strategy Consultants.
But there is one big problem – the lack of affordable hardware. Not everyone can afford expensive headsets, and smartphones, while widely used, offer a limited and sub-par VR experience.
Augmented reality and gamification
Like in previous years, Alibaba has been holding online contests and giveaways of vouchers known as “red packets” in the lead-up to 11 November.
This year it’s also using augmented reality – the same technology behind the hugely popular game Pokemon Go.
Using a game within the Tmall app, shoppers “capture” Tmall’s cat mascot at participating shops and restaurants to unlock and win “red packets”.
Gamifying shopping, where customers have to make repeat visits to win rewards, helps to “lock” customers into particular retailers, says Andrew Milroy of Frost and Sullivan.
“Pokemon Go has done a lot to accelerate the acceptance of augmented reality and gamification. Both will do well and can be expected to be widely used by online retailers over the next few years.”
But shoppers may soon grow tired of the novelty factor. Mr Chuang points to the steep drop-off of players of Pokemon Go several months after its launch, and says businesses will have to figure out how to use augmented reality in more complex ways.
First mover advantage
Alibaba has also made livestreaming introductions to foreign retailers for Chinese consumers, and held an “interactive television” event with its lavish countdown show on Thursday night featuring celebrities like Kobe Bryant and OneRepublic.
Observers say such attempts to innovate show Alibaba is intent on getting first mover advantage, and these new ways of shopping are likely to take off in Asia first, where the company is aggressively expanding.
“Asian countries like China, Japan, South Korea have more experience leapfrogging technology and their consumers are more willing to adopt these new technologies. But there’s nothing to stop them from spreading to other countries as well,” says Mr Chuang.