Dismantling the Space: Alibaba’s New Territory in VR Shopping.

This April, the luxury designer brand Valentino has teamed up with Alibaba to create a 3D virtual store on Alibaba’s platform Tmall. Simultaneously, Valentino has opened its physical pop-up store in Beijing. This was an exemplary new retail strategy of a luxury brand: well integrate online and offline campaigns and increase the customer engagement.

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Virtual Reality is a cutting-edge technology embraced by the digital world for the past few years. By creating a virtual 3D environment, users can interact with the products and the shopping places with similar feelings as they do in the real malls.

Alibaba is one of the most engaged companies in China when it comes to VR. In 2016, it established its own VR Lab called GnomeMagic Lab and accounted its VR strategy in the future.

The advantage of VR is, obviously, to break through the limitations of space. When used in the retail areas, customers can shop whenever and wherever (ideally). For example, in Alibabab’s VR shop Buy+ , users can choose if they want to go shopping in the US or in Australia. They could even experience the same streets where Macy’s or Target is located.

Another highlight from Alibaba is VR payment. In VR shops, users can pay the bill simply by nodding.

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In fact, not Alibaba is taking actions in this battlefield.

Baidu has also announced their steps in VR market this May: to invest on Aiqiyi into the world’s biggest Chinese VR service platform of movies and games. It is expected that immersed online streaming, videos and games would become the first mature VR market, earlier than any other areas. Remember this fact: there are about 50 million users who frequents media websites and apps.

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Tencent is investing in VR videos and games as well, in order to keep 1.3 billion users’ loyalty by creating more attractive contents. Besides, Tencent invested in Original Force, a company that creates VR contents. These investments are important for Tencent as a long-term strategy.

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Unlike Google, Sony and HTC that focus on inventing wearable VR devices, Chinese BAT put more efforts on the entertainment experience itself. To put VR market in the business context of China, there are advantages to push this technology forward:

  • The fierce competition among Baidu, Alibaba and Tencent has pushed the market into one that get increasing recognition by the public.
  • Compared to customers in other countries, Chinese customers have much higher motivation and greater enthusiasm when it comes to a new digital technology. Research shows 30% of the Chinese customers would be willing to buy wearable devices if the price is under 200 US dollars.
  • Chinese customer have a strong interest in shopping overseas. VR shopping overseas satisfy this shopping demand, and that is also why Alibaba launched Buy+ firstly on online overseas shops.

Of course, as a relatively new technology, it faces a lot of challenges:

  • Cost: VR shopping requires a competent mobile device, a pair of VR glasses, high internet speed and high battery supply etc.
  • Tangibility: the feel of the products are missing.
  • Database: 3D product data pool needs to be created and maintained.
  • UX: the userflow needs to be smooth without waiting time; users should be able to rotate 360° instead of 180°.

All in all, VR shopping is a new area to be further explored and will definitely overturns the conventional concept of shopping and entertainment.

Let’s wait for the transformation!

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