Alibaba, which operates China’s biggest e-commerce platform, is trying to revolutionize China’s factories through “new manufacturing” introducing the concept of the “digital factory”. The new type of factory is specifically meant to help small- and medium-sized enterprises (SMEs) by improving efficiency and making production more flexible based on consumer demand.

The Hangzhou-based plant, named Xunxi Digital Factory, is powered by state-of-the-art technology including cloud computing, data analytics and the internet of things (IoT), and aims to provide SMEs with a production supply chain that can enable them to respond quickly to fast-changing trends and fulfill customers’ growing demand for personalized products, Alibaba said in a statement on Wednesday.

The digital factory has initially worked with apparel companies doing business on Alibaba’s Taobao and Tmall marketplaces, using big data to help brand owners design products catering to consumer preference and helping them keep production costs down.

“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,” said Alain Wu, CEO of Alibaba-affiliated Xunxi Digital Technology Company, which runs the digital factory, in a statement.

In 2016, Alibaba founder Jack Ma put forward the concept of “new manufacturing”, which is part of the “five new” trends he bet on as key drivers of Alibaba’s future business growth. The others are “new retail”, “new technology”, “new finance” and “new energy”.

Contact reporter Ding Yi (yiding@caixin.com)

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