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Alibaba unveils vision of futuristic, on-demand manufacturing with secret Hangzhou factory

The factory, which has been under development for three years, is now able to produce small-batch orders at reasonable costs and with shorter delivery times for apparel makers.

Alibaba 2 Alibaba's Xunxi factory. Photo provided by Alibaba

Alibaba (NYSE: BABA) officially unveiled its Xunxi Digital Factory on Wednesday, a showroom for a suite of factory hardware and software targeted at clothing manufacturers. The tools and technologies in the new facility fall under what the internet giant’s founder Jack Ma called “new manufacturing”, a model he hopes will help make traditional factories more efficient and consumer demand-driven.

Unlike traditional factories that rely on producing a large surplus of stock, which they put up for sale, new manufacturing aims to reduce reliance on inventory and instead manufacture goods on-demand, as people order them.

China digest

“New manufacturing is a cloud-based demand-driven manufacturing model that aims to empower small-and-medium-sized companies to respond quickly to shifting trends and fulfill consumers’ growing demands for personalized goods in this digital era”, said Alibaba in a press release, adding that “new manufacturing links up manufacturing-related data and consumer insights with factory production and management systems to enhance efficiency and productivity.”

Based in Hangzhou, the factory, which has been under development for three years, is now able to produce small quantities of various clothes at reasonable cost and with shorter delivery times for apparel makers.

Since its inception, the plant has collaborated (in secrecy, prior to this week’s public unveiling) with Taobao and Tmall merchants, livestreaming broadcasters, and streetwear designers, to explore and experiment with new possibilities of apparel manufacturing. For example, Xunxi teamed up with Viva, one of China’s most influential livestreamers, to sell over 100,000 pairs of heat-generating jeans on-demand.

The new digital factory marks a milestone in the implementation of Alibaba’s “Five New” strategy which was first introduced by Jack Ma in 2016, which comprises new retail, new manufacturing, new finance, new technology, and new energy, according to Alibaba.