Alibaba Group to establish a new manufacturing digital factory in China

On Wednesday, Alibaba Group Holding Ltd. (BABA.N) announced its plan to establish a pilot factory in the eastern Chinese city of Hangzhou.

The e-commerce company said that the move was a part of its “smart manufacturing” business initiative.

Alibaba said in a statement that the factory would primarily work with apparel companies. Its internal division was called Xunxi Digital Technology Company.

According to the company, the new manufacturing model would offer a digitalized end-to-end manufacturing supply chain that allows fully-customized and demand-driven production.

“Data is the core of New Manufacturing and harnessing data insights is key to capturing new opportunities in the shift in consumer preference for personalized rather than mass-produced goods. New Manufacturing transforms traditional manufacturers with data-driven intelligence and technology to move towards a more agile model of production based on real-time demand,” Alibaba Group’s Xunxi Digital Technology Company CEO Alain Wu said in an interview.

“This allows traditional manufacturers to improve profitability and reduce inventory levels while still being able to meet these personalization needs,” he added.