COMMERCE: THEN AND NOW
Remember shopping malls? We call them “brick and mortar” – a physical place where people go to purchase goods and services. But we have come a long way ever since the Covid-19 pandemic. With the implementation of social distancing, the internet (virtual) space blew up – becoming all too important to us. Everything that can be put online became the new wave (digital economy). Technology has brought us this far.
E-COMMERCE
11.11 sale just happened and 12.12 is on the way! One of the largest annual sales events in the world beckons millions of people around the globe to get in on a good deal. A physical store would not be able to support a fraction of the sales made on e-commerce platforms such as Alibaba, Shopee and Lazada on a big sale day. But exactly how big is it?
Alibaba Group Holding Ltd announced that it generated US$38.4 billion in gross merchandise volume (GMV) on Nov 11, 2019 – its ‘11.11 Singles’ Day’ global online shopping extravaganza. It was an increase of 26 per cent compared to 2018. In the year 2020, Lazada recorded a whopping $74.1 billion sales over an 11-day period. In just one day, that value extends above some countries’ GDP, such as that of Iceland’s in 2019.
CLOUD TECHNOLOGY – ENGINE BEHIND THE E-COMMERCE 11.11 SALE
E-commerce platforms such as Alibaba, Shopee and Lazada are accessed by customers on either their websites (Google Chrome/Internet Explorer) or their mobile applications. Then, the customers proceed to select the product they want from the vendor, check out and pay for that item. That is generally how it works for the customers.
Alibaba and Lazada are run mainly on Alibaba Cloud Technology. With cloud technology, they are able to support large amounts of network traffic. This is due to the cloud provider having all the necessary computing power to provide ecommerce platforms with the technical requirements, necessary for the sudden spike in customers. This does not apply only for the 11.11 sale, but any last-minute spontaneous event can also be supported on the technical level with the scalability and readiness of the cloud.
Additionally, cloud security protects users’ data and averts website downtime from any malicious attacks as well. Cloud technology also aids the content delivery process. For example, allowing live streaming to be streamed seamlessly by many different users at once – another key feature during an online sale. Of course, there’s also data analytics, AI and many other features that are all integrated and accessible through cloud technology.
THE HYPE ABOUT CLOUD FOR E-COMMERCE
Imagine you own an e-commerce platform such as Lazada and rely on traditional methods of hosting and managing your website by buying some servers and managing it yourself –
1) Would you have been able to scale up your servers ten times more than usual for the 11.11 sale?
- Not a problem. But that is an upfront purchase with additional ten times the server cost for just a day. You will also have to plan your purchase timeline together with deployment of the new servers to ensure everything runs smoothly before the big day.
- With cloud technology, you pay for what you use. You need more computing power? It is provided almost instantly by the Cloud Provider through the internet.
2) The spikes of customers only happen a few times a year. What is the more economical approach?
- Don’t buy servers for that, cloud technology allows you to tap into additional technical resources and only pay when you use them – and when you are done, you do not have to pay for it anymore.
3) You pray there are no issues on the day itself… such as the server/website being down.
- The greatest fear of e-commerce platform owners and vendors – website overload, slowdowns and inaccessible to users. In 2019, the GMV by Alibaba is $38.4 billion in a day, which is translated to $1.6 billion an hour, $27 million a minute on average. That is how much the e-commerce platforms stand to lose out per minute if there is any downtime or slow access. Especially in today’s competitive world, if Lazada was slower by a few seconds, a customer could just open a new tab and search for the same item in Shopee. Capturing and retaining the attention of customers with fast website responses is essential.
- Cloud providers promise availability of their resources to ensure your e-commerce platform runs smoothly. Downtime is expensive – millions of Ringgit worth of sales lost by the second. Hence, cloud services save you millions and provides the customers with satisfying experience, while ensuring a stellar reputation, increasing your competitive advantage and revenue.
- On another note, do you know how Zoom became one of the most widely used online video conference tool during the pandemic? Being backed by cloud technology from Amazon Web Services (AWS), Zoom was able to handle the surge in users on Zooms’ platform, which increased from 10 million daily meeting participants in December 2019, to more than 300 million a day regularly since April 2020. In a cost effective and resource-ready manner, Zoom captured the attention of millions of new users by the day as their platform outperformed competitors with minimal technical issues, bringing their company to where they are today, all thanks to cloud technology.
HOW DOES CLOUD TECHNOLOGIES APPLY TO YOUR INDUSTRY
In short, this is not only relevant to the e-commerce industry, but it is also the same for every industry. Informational Technology is an important component of businesses today. The benefits of cloud technology mentioned above is relevant to you.
In Cloudify.Asia, we are cloud professionals who assist our clients on their business challenges. By gaining a deep and thorough understanding of your business challenges, we offer solutions that best fit your business needs, to ensure your business generates more revenue and remains strongly competitive in your industry.
So, during your next 11.11 sales shopping spree, evaluate how the e-commerce platforms you are using manage to get ahead of their competitors, and appreciate the technology behind it.
Written by Tytus Tang | Cloud Integration Strategist