Alibaba has announced structural changes that will see an increased focus on its growing C2M (customer to manufacturer) business from 2 December 2019. The restructure has seen Taobao launch a business division focused specifically on the C2M model focused on technology-enabled consumer demand aggregation and product innovation, as it strives to maintain growth for its core ecommerce business, keeping keep up with rivals JD.com and Pinduoduo, who have launched their own C2M lines.
Although the concept of C2M has been around since the 1980s, it is only recently that appropriate platforms and technology have been available to make it scalable, allowing consumer demand to be quickly communicated to factories for cost-efficient small batch production. The recent trend of celebrity e-commerce has been a driving force behind C2M production, with celebrities endorsing sample products which are then produced based on the quantity ordered.
Brands must be aware that with advanced data analytics and the spread of social selling, together with increased consumer demand for niche goods and services, C2M is likely to expand. Brands should invest in infrastructure supporting C2M production to tap into growing consumer demand for innovation, speed and excitement, as well as support sharper retailer positionings based on increasingly unique product curation.
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