Test Kitchen

IMAGE COURTESY OF SNICKERS

Tmall Innovation Center has helped develop new products like the chili-infused Snickers bar.

Chinese e-commerce giant Alibaba has access to vast amounts of consumer data: what people are watching and buying, what they're searching for—and what they can't find. Until last year, that void included a chili-infused Snickers bar. No longer.

Alibaba's digital retail site Tmall is partnering with consumer brands such as Mars, Sony, Mattel and Anheuser-Busch InBev through its market-research arm, Tmall Innovation Center (TMIC), to pursue data-driven product development projects. The effort is part of Alibaba founder Jack Ma's grander strategy to upend the conventional new-product pipeline: Instead of brands dictating to consumers, consumer behavior is guiding what brands do.

Using its access to consumer data, Tmall has helped companies get new products to market quicker—and with a higher probability that they'll be met with enthusiasm. The spicy Snickers bar, for instance, hit its year-one sales target in the first six months. In November, Johnson & Johnson launched a fruity mouthwash on Tmall under its Listerine brand. Development took just five months instead of the typical two years, says Eileen Zhang, general manager, baby and personal care division, Johnson & Johnson Consumer China, Shanghai, China.

TMIC's big data insights and focus groups accelerated early-stage product development, allowing the team to narrow a short list of 20 flavors down to two that launched: rosemary blossom and vanilla breeze. The flavors were targeted to women, with TMIC's data showing women were more likely to buy mouthwash if it had a milder taste.

“Speed is especially important in China, where customer preferences are constantly changing and evolving,” Ms. Zhang says. “TMIC is able to provide the data and distill insights from the data in a short amount of time. This essentially gives us a quicker response time.”

The data also gives companies a greater likelihood of profitability. Over 10,000 bottles of the mouthwash sold in the first five minutes of its release, and over 100,000 sold within the first three months—far exceeding expectations, Ms. Zhang says.

Tmall's digital tools are also helping teams test products. Mondelēz International worked with TMIC last year to create new Oreo flavors for the Chinese market. The six-month project delivered an Oreo variety pack containing eight new flavors, including hot chicken wing and wasabi.

Mondelēz trialed the flavors with target consumers through TMIC's online testing tool. The tool simulates the consumer shopping journey: Users browse items on what appears to be the normal site. When they go to check out, a message tells them that the product does not exist yet, and they are instead given a voucher. User activity, in addition to customized surveys, helps assess the popularity of different flavors. In three weeks in November, more than 34,000 boxes of the variety pack sold, making it the second-most-popular Oreo item on Tmall, according to Alibaba.

“The cooperation makes us more agile, faster and open to data-driven innovation,” says Maggie Wang, vice president, biscuits for Asia, Middle East and Africa, and global research, development, quality and innovation, Mondelēz International, Singapore. —Ambreen Ali

—Maggie Wang, Mondelēz International, Singapore

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