3-year experiment helps Alibaba reinvent factories

After helping more than a million brick-and-mortar Chinese retailers modernise their operations, Alibaba Group Holding has now set its sights on a new target: the country’s outdated factories. China’s largest corporation unveiled in September its first smart factory, a secret experiment that Alibaba’s been conducting for three years on the outskirts of its hometown of Hangzhou. The three-story facility known as Xunxi – translated literally as “fast rhino” – is the company’s attempt at leveraging its consumer data and technologies to help the multitrillion-dollar manufacturing arena improving efficiency and meet rising consumer expectations.

Alibaba’s path to smart manufacturing starts with garments, a market worth 2.2 trillion yuan ($328 billion) in China last year based on Euromonitor International’s estimates. Alibaba has said that one in four clothes purchases in the country was shipped via its ecommerce platforms, granting it access to an ocean of data that it’s now deploying to assist domestic garment makers in design and production planning. It’s also centralizing the material procurement process to help reduce costs. Artificial intelligence, robotic arms as well as many other in-house technologies have also been put into use at the Xunxi factory prototype.
It usually takes months for apparel companies to bring a new design from the runway to stores, but Alibaba claims it is able to cut order lead times by 75% with its solutions. This would address the growing demand for instant gratification among China’s Gen-Z consumers. For instance, with the help of AI, designers can review simulated rendering effects on so-called digital fabrics on their computer screens, rather than going through a time-consuming process to dye the fabric.