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How Alibaba Is Using Data to Drive Merchant Loyalty

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Jun. 27 2019, Published 11:23 a.m. ET

Alibaba is helping brands understand consumer shopping habits

In January, Alibaba (BABA) launched a strategic partnership program dubbed A100. The company said that A100 would be a one-stop shop for brands to obtain comprehensive solutions to accelerate their digital transformations. Little has been heard about the A100 program since its launch—until recently, when details emerged about how Alibaba was using the program to drive seller loyalty to its marketplace and other services.

According to a report from Reuters, members of Alibaba’s A100 program are able to access vital data, such as consumer shopping history, which they can, in turn, use to refine their marketing strategies and allocate their resources better.

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Alibaba helps Nestlé reduce its warehousing needs

Major corporations that have joined Alibaba’s A100 program include consumer goods companies Nestlé (NSRGY) and Procter & Gamble (PG), which recorded a 1.1% YoY (year-over-year) rise in revenue to $16.5 billion in the first quarter. According to the report, working with Alibaba has helped Nestlé reduce its warehousing requirements in China such that it now operates only one warehouse in the country, down from four previously. Nestlé is now using data to better plan its product distribution.

The A100 program could help Alibaba draw more brands and merchants to its digital marketplaces, expand product selection for its shoppers, and hopefully generate more revenue. Alibaba’s revenue rose 51% YoY to $13.9 billion in the March quarter. Amazon (AMZN), JD.com (JD), and eBay (EBAY) reported first-quarter revenues of $59.7 billion, $18 billion, and $2.6 billion, respectively.

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