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Community Blog How Can Your E-Commerce Business Rise to the Challenge of Exploding Growth?

How Can Your E-Commerce Business Rise to the Challenge of Exploding Growth?

This article showcases the successes of e-commerce businesses using Alibaba Cloud to grow and expand into new markets.

The e-commerce market worldwide continues to explode as consumers embrace online sales and incumbent retailers and new entrants seek a slice of the increasingly lucrative market.

Multinational e-commerce provider Shopify cites estimates the worldwide e-commerce market will reach $5.55 trillion this year and grow to $6.17 trillion in 2023, while McKinsey notes online sales are forecast to account for nearly half of all retail revenues by 2024. The pandemic accelerated an existing shift to online and forced many e-commerce providers to quickly upgrade infrastructure running websites and applications to support increasing demand.

In this environment of intensifying competition, demand for innovation and differentiation, elevated customer expectations around service stability, availability and security, and rising costs, e-commerce providers remain under pressure to deliver a high-quality experience. Working with cloud providers with a track record of delivering e-commerce at scale can minimize risk and create opportunities for e-commerce businesses at any stage of development.

In 2021, Alibaba Cloud migrated all of Alibaba Group’s systems and operations onto the cloud ahead of the world’s largest online shopping event, the 11.11 Global Shopping Festival, successfully supporting an event that brought together 900 million Chinese consumers and 290,000 brands – and recorded $84.54 billion in gross merchandise volume.

Over recent years, several e-commerce customers – including globally-renowned brand names – have taken advantage of Alibaba Cloud’s proven technologies, services and products to successfully deliver high quality e-commerce services.

A Scalable, Reliable Infrastructure

Alibaba Cloud provides a range of e-commerce infrastructure solutions to businesses in the Asia-Pacific region and beyond, meeting these needs for a scalable infrastructure. For example, HungryPanda Ltd – a London-headquartered specialist food delivery platform that connects consumers with businesses selling authentic Chinese food and groceries – experienced a growth spike during the coronavirus pandemic. Running its platform on Alibaba Cloud’s Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) solutions ensured HungryPanda could meet the challenge.

“There was a surge in demand for app-based delivery services,” Jon Hsu, General Manager, HungryPanda, says. “In some cities, we experienced a 600% increase in volume. That required allocating resources to manage delivery times, communication, quality control and more, all while ensuring that our app ran smoothly. Our partnership with Alibaba Cloud made that possible.”

Meanwhile, Lazada – a business acquired by Alibaba Group through investments in 2016, 2017 and 2018, which provides online shopping and selling to consumers in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam – uses Alibaba Cloud for its e-commerce platform. After the completion of programs called 'Voyager' to upgrade the platform, the organization had the bandwidth and elasticity to support both the 11.11 Shopping Festival and 12.12 shopping festivals. In just two days the Lazada application received over 1.3 billion visits and supported customers buying and shipping throughout South East Asia.

Peanut Diary, a business known for its intelligent shopping guide application, also experienced a surge in demand during a Double 11 event - but during the traffic peaks, its system experienced multiple failures. The business opted to use Alibaba Cloud Application High Availability Service, which collected peak queries per second in excess of 40,000 during Double 11, while gross merchandise value exceeded $4.2 billion and daily active users reached tens of millions. The traffic had tripled compared to the previous year.

During the Double 11 peaks, AHAS provided traffic control features such as circuit breaking, throttling, and downgrading. Facing the traffic surge from 8,000 QPS to more than 40,000 QPS, business operations remained stable. The revenues in the first one hour, 27 minutes, and 35 seconds exceeded the total daily revenues of November 11 the previous year.

Alibaba Cloud helped the business rapidly evolve to a cloud-native microservice system architecture based on ECS Bare Metal Instance and Container Service for Kubernetes (ACK). Backed by Aliware and Alibaba Cloud application services such as ARMS, AHAS, and Log Service, the system has greatly improved overall reliability, stability, elasticity, and fault tolerance, while IT resource utilization has also increased. The transformed system helped Peanut Diary cope with the business peaks six times the normal traffic volume.

Meanwhile, Singapore online supermarket RedMart needed a strong IT backbone to support its digitization efforts. Business scenarios associated with RedMart's technology adoption include an official website, its official mobile app, a product stock and inventory management system, and a logistics system. Helped by Alibaba Cloud technology innovations and cloud reliability, availability and extensibility, RedMart successfully maintained one of the industry’s best delivery records and customer satisfaction scores, despite spiking demand for grocery deliveries.

Elastic Compute Service (ECS) and ApsaraDB RDS databases help RedMart scale quickly based on business demands and keep TCO at a minimum. RedMart also uses more advanced services from Alibaba Cloud, such as Container Service for Kubernetes, to build a cloud-native architecture. This service simplifies the deployment and scale-out operations of Kubernetes clusters, and integrates Alibaba Cloud capabilities of virtualization, storage, networking, and security, providing an ideal environment to deploy containerized applications.

"Alibaba Cloud has helped RedMart manage our software applications in a flexible, reliable, and cost effective manner. Alibaba Cloud has played a pivotal role in helping us convince customers about our customer focus and commitment to be more reliable and responsive," says Ashish Awasthi, EVP of RedMart.

Keeping Sensitive Information Secure

E-commerce businesses face extensive threats from cyber-criminals and sophisticated malware designed to capture sensitive corporate information and the personal and financial details of customers, disrupt operations to extract ransoms or compromise service delivery.

Tokopedia – an Indonesian technology company with a mission to democratize commerce through technology – was looking to enhance the protection of its web applications in the most effective and manageable way. With a multi-cloud strategy in place, having one unified portal for all security solutions became a natural need.

Tokopedia was aiming for a centralized web application protection solution that provided world class security to protect applications deployed across various cloud or on-premises platforms. This would enable its security team to easily manage its web apps from a centralized portal and deploy changes in security rules across platforms in one go.

Tokopedia deployed Alibaba Cloud WAF for applications deployed in Alibaba Cloud. When the business experienced the effectiveness of the solution, it began looking at similar protection for workloads deployed on other cloud platforms and Alibaba Cloud Hybrid WAF (HWAF) was a great fit for this requirement. Deployable on other cloud platforms, HWAF synchronizes with Alibaba Cloud WAF for security rules and gives Tokopedia a centralized portal to manage its application security across various platforms. Through this capability, HWAF provides the same strong security for web applications as Alibaba Cloud WAF.

Having one central console to manage all security needs helped Tokopedia provide increased coordination and flexibility to continue using different platforms to host its applications while receiving optimum security coverage through Alibaba Cloud WAF solutions.

For its part, Lazada turned to Alibaba Cloud Anti-DDoS to detect and scrub malicious traffic and combat DDoS attacks. This made for better business continuity as non-malicious traffic was able to access and use the platform without any problems.

Creating New Features at Scale

E-commerce businesses need to provide an elevated customer experience to compete with new and existing market entrants – and this means meeting customer expectations that a service will allow them to immediately access the products they want or need, even from within a vast selection. Fishpond, an e-commerce company headquartered in New Zealand and with offices in the United Kingdom and the United States, provides tens of millions of unique products and global shipping. During one 12-month period, Fishpond sold a product every 1.2 seconds and gained a new customer every 5.9 seconds.

After reviewing a number of technologies and providers, Fishpond decided to engage Alibaba Cloud to work on developing a feature to enable them to gain better engagement with customers and allow for enhanced search functions within their websites. As Ben Powles, CEO of Fishpond explains “Modern e-commerce is about delivering the right price, on the right product, at the right time, completely seamlessly. By utilizing an image recognition solution from Alibaba Cloud, our customers can now search our diverse and large-scale product catalogue with the snap of a photo.”

This solution enables customers to instantly find products similar to those they have in front of them or find online via social media feeds. Leveraging technology Alibaba had used for its own marketplaces, Fishpond worked with the local Alibaba Cloud teams to develop a custom solution for Fishpond websites in Australia and New Zealand. The image search functionality and massive scalability is perfect for Fishpond’s huge range of products, as Powles highlights: “With over 2 million toys, 1.8 million Homeware products, 1.6 million beauty products, just to name a few, we needed an innovative solution that could scale to match our customers’ needs but remain lightweight and, above all, simple to use. The technology required to visually search through literally millions of products, in seconds, was unprecedented - the fact that the user experience is so simple and seamless is a hallmark of what cutting-edge CX and UX design should be.”

Expanding Into China

Entering new markets is a key growth strategy for e-commerce companies with global ambitions – but the regulatory requirements of some markets can frustrate these plans. Munchkin, based in Van Nuys, California, was on a mission to be the most loved baby lifestyle brand in the world, with products ranging from sippy cups to diaper pails, and consumables with Milkmakers lactation cookies and teas.

As an established U.S. company, Munchkin traditionally hosted its website in Dallas and relied on a content delivery network to deliver static web content to international regions. With an office in Shanghai and expanding operations in Mainland China, Munchkin also hosted an earlier version of its website in Singapore to serve users in China. However, according to Munchkin’s Senior Director of Digital Technology, Balazs Franciszti, “The company was seeing mixed results with this solution and experiencing low visibility in Mainland China.”

To provide a better experience for customers and to support new product releases, Munchkin wanted to deploy a local online presence in Mainland China. As with many foreign companies operating in China, Munchkin decided to take the path of applying for an ICP Filing and deploying on a local hosting server.

Following extensive online research and review of various bulletin boards that repeatedly pointed to Alibaba Cloud’s reputation and strength in the China market, Munchkin decided to contact Alibaba Cloud. Munchkin was impressed by initial contact with the Alibaba Cloud team in the U.S., and according to Franciszti, “Reputation and responsiveness were huge in helping us to make the initial decision to work with Alibaba Cloud, in combination with the help Alibaba Cloud provides around ICP registration.”

Since deploying on Alibaba Cloud, Munchkin has seen major improvements in performance and website availability. “Users can now find Munchkin online in China via our website and that has effectively improved all metrics from zero to one hundred. Before we launched on Alibaba Cloud, our availability in China was only 5% according to our internal tests and much of the map was red,” says Franciszti, adding, “since moving to Alibaba Cloud, the map has changed to green or yellow and the red has completely disappeared.”

Managing and Aligning Costs with Growth

During startup and periods of high growth in particular, cost management is critical to e-commerce businesses. For example, eBest – an organization that aims to bring the world’s best goods to Australia and provide customers with a next day home delivery online shopping experience across thousands of products – worked with Alibaba Cloud to develop and run its application. Cash flow was a consideration and a large challenge for eBest was working with a flexible payment plan in order to manage the business well and become profitable as early as possible. Alibaba Cloud offered eBest a flexible charging model for the products and solutions it was consuming on the cloud platform, which enabled the business to have a fast start and drive towards a successful outcome.

With Alibaba Cloud, e-commerce businesses can exploit surging demand and realize growth ambitions while successfully meeting the escalating expectations of customers, partners and other stakeholders.

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Iain Ferguson

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