clock menu more-arrow no yes mobile

Filed under:

A Brief Journey to the Future of Retail via Alibaba’s CES Booth

The Chinese commerce giant is laying a road map that Silicon Valley will try to follow

(Ringer illustration)
(Ringer illustration)

The CES booth for e-commerce giant Alibaba is shockingly small. The exhibition space for Victrola record players (yes, Victrolas are back) one booth over is nearly as big, and virtually everything in this vicinity of the Las Vegas Convention Center is being drowned out by a gargantuan, overcrowded LG exhibit that uses laser lights and blaring techno to basically plea, Please keep buying TVs.

But don’t let size fool you — Alibaba is one of the most important companies at CES. The Chinese firm began its life in the Hangzhou apartment of founder Jack Ma in 1999. Today, after staging the largest global IPO of all time, it’s the 14th-biggest company trading on Wall Street by market cap. Alibaba’s bread-and-butter business is a series of commerce sites where merchants sell goods to Chinese consumers — unlike Amazon, Alibaba doesn’t fulfill these orders itself, so the company pulls in huge profits off search ads and commissions. It has used its massive earnings to enter a range of far-afield businesses that are all still ultimately geared toward convincing upwardly mobile Chinese consumers to buy more stuff. It’s like Amazon if Amazon knew how to consistently make money.

None of this is apparent the moment you step into the booth, but it becomes obvious by degrees. A massive screen that curves around one wall of the exhibit space features a map of China with orders on Alibaba’s e-commerce websites lighting up in real time (“# of Delivery Orders Since Midnight: 23,749,796”). A dozen chairs sit around the screen for expo attendees who may have never heard of Alibaba to get a brief primer on the company’s businesses. “We have over 400 million annual buyers,” Cooper Williams, an executive for the Alibaba retail site Tmall says during this primer. “As a point of reference, the population of the U.S. is 318 million. Our annual buyers are actually larger than the population of the country we’re in right now.”

Point being, Alibaba has the money and clout to compete with the giants of Silicon Valley, and they’re increasingly flexing that muscle. The rest of the booth laid out various services that depicted a future where many aspects of real-world commerce are mediated via Alibaba. I saw a smart refrigerator with a massive touch screen running YunOS, Alibaba’s Internet of Things operating system. Now a staple of gadget-centric companies like Samsung and LG, the smart fridge has been derided by critics (scan items inside the fridge! Automatically compile a grocery list! Order eggs with the press of a button!) as a solution to a problem that doesn’t exist. But Tom Ho, Alibaba’s global head of planning and strategic communications, claims their fridge is a hit in China. “It’s a very popular brand,” she says. “Some of the younger Chinese families, they really want to embrace the technological life.”

There are many other methods Alibaba has thought up to help you buy things. At a store checkout demo called “Smile to Pay,” a customer scans a purchased item at a kiosk, then a camera recognizes their face and automatically debits their account (no, you don’t actually have to smile). Another demo called “VR Pay” places the customer in a virtual storefront where they can browse wares. Macy’s let Alibaba customers shop its flagship New York store using virtual reality on Singles Day, the Chinese version of Cyber Monday. And there was a demo of Alibaba’s “Internet Car,” a connected car system (much like Android Auto or Apple’s CarPlay) that is laying the groundwork for future driverless vehicles from the company.

(I also have to mention a second facial recognition demo called “Meet Yourself in a Famous Painting.” The program matched CES attendees’ visages with classic European portraits from artists like Leonardo da Vinci, Jacques-Louis David, and Rembrandt. The white players tended to score a higher “Similarity Rating” than the Asian ones.)

In the United States, these kinds of commerce-tech innovations tend to languish due to a disinterested public. But they’re often wildly successful in China. The reason Facebook and others tried to bludgeon our messaging apps with chatbots last year is because Chinese apps like WeChat have become popular methods of social-driven commerce. All the Apple Pay hype in 2015 was really about Apple, credit card companies, and retailers trying to convince Americans to shop the way the Chinese do. Now Alibaba claims that 8 million shoppers used VR Pay on Singles Day and that 100,000 people have ordered its Internet Car in two months, so it’s possible these new developments will also see eager adoption in the United States.

If you’re residing stateside, these innovations will continue to affect you as tech giants look to China as a road map to digitizing our commerce and getting consumers to go along with the plan. And even if you roll your eyes at the idea of strapping on a headset to shop at Macy’s, the influence of Alibaba is still headed your way. The company also has a movie studio that has invested in Hollywood fare like Star Trek Beyond, and a recent tie-up with the Steven Spielberg–backed Amblin Partners will give it a more direct role in blockbuster production.

Sure, its CES booth might be small … but no one should underestimate Alibaba’s reach.