Made in China or made in internet? Alibaba reveals new manufacturing model

Chinese tech and retail giant Alibaba has launched a first of its kind manufacturing platform: the Xunxi Digital Factory ("迅犀数字工厂").

It helps SMEs  and especially garment companies to solve supply chain issues by combining multiple technologies such as cloud computing and artificial intelligence.

The Xunxi Digital Factory has been secretly developed for the past three years and perfectly illustrates the "new manufacturing strategy" in the "Five New Strategies" proposed by Alibaba founder, Jack Ma.




What is this new manufacturing strategy?

In October 2016, Jack Ma introduced the "Five New Strategies" at the Yunqi Conference for the first time: “the new Retail, new Finance, new Energy, new Technology, and new Manufacturing”. These five new strategies were to become the pillars of his next projects. 

As of today, Alibaba has roughly completed its five strategies. The new Retail strategy was concretized with Hema, the new Finance strategy moved the Chinese finance system through the Ant Group, the new Technology strategy was brought to life with the Dharma Academy, the new Energy is the Alibaba iSolarCloud and finally, Xunxi Digital Factory presents the new manufacturing strategy. 

 "In the next thirty years, manufacturing will focus on intelligence, personalization, and customization”, said Jack. But what does the new manufacturing strategy actually mean concretely? It is the deep re-thinking, re-designing and transformation of the traditional manufacturing process through digital technology and the realization of intelligent, personalized, and tailored manufacturing.

A fun marketing detail is that Alibaba named several of its products with Chinese characters that translate into animal names. The online commerce platform Tmall has the cat (猫); the logistics network, called Cainiao has the BIRD(鸟); the financial service company Ant Financial has the ANT(蚁); and so on. Therefore, the industry refers to Alibaba's products collectively as the Ali Zoo. The Xunxi Digital Factory presenting "rhino (犀牛)" has recently entered the arena. 



2Source: Alibaba website


Read the relevant article about Ant Group


Made in China? Or made in Internet? 

Xunxi Digital Factory focuses on helping SMEs in Taobao Marketplace and the Tmall platforms to solve the multiple pains arising in the supply chain, such as the mismatch between supply and demand, the difficult pre-sale forecasting, and communications issues with merchants.

Compared with the traditional manufacturing sector, the Xunxi Digital Factory relies on heavy tech support to leverage cloud computing, the Internet of Things, artificial intelligence, and other technologies to connect consumer trend insights, sales forecasts, and flexible production based on customer needs.  This factory improves efficiency and makes the production more flexible and adapted to market demand through the use of digital technology.

"New manufacturing makes 'Made in Internet' a reality." The head Xunxi Digital Factory, Wu Xuegang, mentioned that no less than 80% of the employees in Alibaba's new manufacturing team are engineers. They are changing the traditional manufacturing model by using internet technologies.



Source: Reuters


How is the current market? 

Xunxi Digital Factory’s goal is to serve 100,000 fashion brands and 100,000 designers in the future.

In the past three years, Xunxi Digital Factory has conducted pilot cooperation with more than 200 small and medium-sized businesses on Taobao with a minimum order of 100 pieces and a delivery within 7 days. 

At the beginning of 2020, when the Cov-19 swept the world’s economy, the Xunxi Digital Factory helped merchants to quickly adjust production and minimize hardships in an uncertain environment.

In the future, Xunxi Digital Factory will help apparel customers reduce inventory levels and continue to improve efficiency and personalization capabilities. They hope this new manufacturing model will be adopted by other industries except the fashion and apparel industries. Wu said: “We look forward to learning from and partnering with industry peers to build the ecosystem of New Manufacturing together.”




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