Alibaba to ramp up digital transformation in China’s US$4 trillion manufacturing sector

The e-commerce giant’s New Manufacturing pilot, Xunxi Digital Factory, is powered by technologies such as process and cost planning, automated in-house logistics and its own manufacturing operating system

Xunxi, which means fast rhino, has initially offered its cloud-based manufacturing supply chain to small firms in China’s apparel industry

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Alibaba Group Holding’s Xunxi Digital Factory, which started operations in Hangzhou in August 2018, has already collaborated with merchants, live-streaming broadcasters and street wear designers on Taobao Marketplace and Tmall. Photo: Handout

Published: 6:30pm, 16 Sep 2020Updated: 2:14pm, 20 Oct 2020

Alibaba Group Holding, which runs the world’s biggest e-commerce platform, aims to provide small companies with an advanced digital manufacturing infrastructure that could help transform how China produces and brings goods to market.

Hangzhou-based Alibaba unveiled its New Manufacturing pilot on Wednesday with the introduction of Xunxi Digital Factory, which has initially offered small and medium-sized enterprises (SMEs) in the apparel industry a cloud-based production supply chain that can respond quickly to shifting consumer trends.

“Data is the core of New Manufacturing, and harnessing data insights is key to capturing new

opportunities in the shift in consumer preference for personalised, rather than mass-produced,

goods,” said Alain Wu, chief executive of Alibaba’s Xunxi, in a statement on Wednesday.

New Manufacturing – part of the “Five New” strategy introduced by Alibaba founder Jack Ma in 2016 – connects manufacturing-related data and consumer insights with factory production and management systems to enhance efficiency. As the world’s production hub, China accounted for 28 per cent of global manufacturing output in 2018, according to data from the United Nations.

“This allows traditional manufacturers to improve profitability and reduce inventory levels, while still being able to meet these personalisation needs,” said Wu, referring to how SMEs would benefit from the digital transformation of China’s more than 30 trillion yuan (US$4.4 trillion) manufacturing sector.