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Room to manoeuvre: Analytics help online retailers offer customers seamless experience

Ability to manage big data, a powerful cloud platform and a large dose of artificial intelligence are needed for e-commerce websites to thrive

PUBLISHED : Monday, 20 March, 2017, 11:54am
UPDATED : Monday, 20 March, 2017, 11:54am

The difference between online and in-store shopping experiences is that only one of them has “virtual” room to improve. 

With the advent of cloud computing and artificial intelligence (AI), e-commerce revenues are projected to grow to US$3.4 trillion in 2019, according to Statista.

Behind the most successful e-commerce platforms lie coordinated plans that link big data, cloud computing and AI, to ensure a seamless buying experience for customers.

 “E-commerce benefits from these [big data, cloud computing, AI] as they can put the right product in front of the right user at the right time,” says Mart van de Ven, a director of Droste, a Hong Kong-based Data Science Consultancy.

One of the most successful examples is T-mall, Alibaba’s online retail platform, which smashed sales records during its annual Singles Day on November 11. Sales last year jumped 32 per cent from 2015 to a gross merchandise value (GMV) of US$17.8 billion.

 “Back in 2013, $5.14 billion was our one-day GMV. Now we can achieve it in one hour," Alibaba Group CEO Daniel Zhang said in the company’s live blog during the day, adding that during the peak hour of Singles' Day, 175,000 orders were handled  per second.

None of this would have been possible without the ability to manage big data, a powerful cloud platform and a large dose of AI.

Keeping shoppers engaged requires a careful strategy and this can be difficult as customers drop off at every click.  The rate of attrition in e-commerce is enormous. Van de Ven says that with every additional page click, businesses lose approximately 20 percent of their online users. 

“That’s why you need to get the analytics right. Every click that’s reduced increases the revenue by 25 percent,” said van de Ven. “If you can figure out what to put on there, the user comes to your site. If it’s what they want, you get paid. If it’s not what they want, attrition starts.”

Although it isn’t perfect, compared to years ago, it is ‘smarter’ now because a behemoth amount of big data has been accumulated and available for analysis.

Companies such as Alibaba use big data relentlessly, prompting chief technology officer Zhang Jianfeng to say Alibaba defines itself as a big data company.

Behind AI and the visible platforms, cloud computing allows our online wishes to come true.

“That’s where cloud computing comes in,” Van de Ven says. “You want to have the resources available to process this big data. AI is the interpretive layer which makes sense of big data. It’s the software which takes big data input and runs it on the cloud hardware so they can fit together.”

Simply put, the cloud is an inventory space for e-commerce businesses where space is rented out at a low cost. Cloud service, in terms of e-commerce businesses, is where virtual shopping carts, payment processing and accounting is provided for e-commerce businesses. Take Alibaba’s cloud service, which emerged from the need to handle enormous computational power for online shopping transactions, all in real time.

Finally, “cloud computing” suffers from a bit of a misnomer. It is cloud computing that is hidden beneath the business or consumer service. It enables real-time delivery of products, services and the solutions over the internet which were done through cloud services.

It isn’t “computing” as much as it is shopping, banking, selling, collaborating, communicating and being entertained.