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Alibaba, Suning plan major O20 drive

News, 06 June 2016

BEIJING: Internet giant Alibaba and electronics retailer Suning hope to quadruple sales of leading electronics brands through an O2O tie up that leverages the former's data and the latter's distribution network.

The expectation is that home appliance brands – including domestic names Midea, Haier, Hisense, Huawei and Xiaomi as well as international ones like Canon, Samsung, Siemens and Sony – will increase their annual sales revenue to 50bn yuan over three years from the current 10bn yuan, China Daily reported.

"This can be achieved by integrating the online and offline sales channels under a digitalisation process," said Alibaba Group CEO Daniel Zhang.

The merging of bricks and clicks was highlighted last year when Alibaba recruited thousands of retail stores to take part in its annual Singles Day sale.

And it was also in 2015 that Alibaba took a near 20% stake in Suning, which operates some 1,600 stores and 5,500 after-sales service centers across the country which are linked with Alibaba's online platforms. Suning's distribution network is used to deliver products purchased online by consumers via Alibaba's Taobao Marketplace and Tmall.com shopping sites.

Alibaba and Suning will also allow participating electronics brands to leverage consumer data on Alibaba's 423m annual active buyers and Suning's 250m members. "We build a bridge between brands and consumers by leveraging data," Zhang said.

Several brands have already designed products, ranging from rice cookers to refrigerators, based on Tmall data.

The potential to increase online buying is significant, according to Yin Jing, president of the home appliances and consumer electronics business unit at Alibaba, since many consumer in lower tier cities continue to shop at physical stores.

"We hope to link up with more traditional home appliance and consumer electronics shops with our e-commerce platform," he said. "This will help further expand our sales channels."

Data sourced from China Daily, Alizila, South China Morning Post; additional content by Warc staff