After generating a nearly $15 billion gross merchandise value on its Singles Day (November 11th) promotion last year, Alibaba‘s is all set to pilot its virtual reality shopping experience Buy+ on Single’s Day this year. Buy+, which debuted in the Taobao Maker festival (an offline shopping event targeting millennials) in August this year, allows users to wear a virtual reality headset to view products in a 360 degree view. This provides a closer and “real” look of the products compared to a regular PC.
With Single’s Day generating huge volumes for the company, Alibaba is looking to promote this event more aggressively this year. While the innovative concept of virtual reality should attract users, the company is also looking at live streaming and extending the event to Hong Kong and Taiwan to attract more shoppers. It is estimated that this year Singles Day can generate a $20 billion GMV for the company, which is nearly 5% of its total GMV of around $ 500 billion, making this the biggest promotional day for the company.
As Chinese consumers look to embrace new technologies, a virtual reality experience can attract more users to Alibaba’s platform on Single’s Day, users eager to try out the new immersive experience. The virtual reality market in China is growing at a fast pace and is expected to grow by 36 times to reach $ 8.5 billion by 2020. This strategy should drive future revenues for Alibaba.
New Immersive Shopping Experience Can Attract Consumers
Alibaba’s launch of Buy+ comes after eBay launched the first ever virtual reality department store in partnership with Australian retailer Myer. Given Alibaba’s dominance in China, the pilot of Buy+ will be the largest virtual reality shopping launch and should attract more shoppers to the Single’s Day promotion. To use Buy+, consumers can purchase a cardboard VR headset which can be used with their smartphones to experience the virtual shopping experience. Buy+ is integrated with Alibaba’s payment tool Alipay and users can pay with a nod without removing the headset.
While Alibaba is promoting this shopping experience more for foreign stores such as Macy’s which do not have a physical presence in China, it can help other retailers as well. Virtual reality provides retailers with more avenues to convince buyers about their products and a near real shopping experience for buyers. Consumers can view 3D images of products in almost a physical store-like experience, enhancing the online shopping experience significantly. Virtual reality is already popular in China, especially among the younger generation. It is likely to be an intrinsic part of the next generation’s movie experiences.
By introducing a virtual reality shopping experience, Alibaba can attract these young shoppers to its platform. It is still unclear when this experience will be rolled out on its platform on a permanent basis after the pilot. However, the pilot on Single’s Day can attract curious users and young shoppers interested in trying out this innovative shopping experience. This will work well to promote the much hyped Single’s Day, drawing traffic and volumes for the company.
Alibaba is working on initiatives to stay ahead of competition and provide new shopping experiences to users. An immersive shopping experience for technology-crazed Chinese consumers should work well in its favour. This strategy should keep the buzz alive for Alibaba and work well for its long term growth strategy.