This year’s 11.11 Shopping Festival, China’s 24-hour online-shopping blowout sale, is different this year. Previously an almost exclusively Chinese event, in 2014 Alibaba Group, the host of the festival, is making it a cross-border affair covering more than 200 countries by enabling China’s consumers to buy direct from overseas merchants and brands, and encouraging more shoppers in other countries to buy online from China.
The vehicles for this expanded trade: AliExpress, Alibaba’s global shopping website, and Tmall Global, which helps Western merchants without an established China presence reach mainland consumers through the Web. At an Oct. 30 press briefing in Hangzhou, China, Maggie Wu, general manager of Alibaba’s global business-to-consumer division, talked to reporters about Alibaba’s global strategy. Here are the highlights of Wu’s remarks, translated from Chinese and abridged for clarity:
The AliExpress mission
Four years ago, we launched AliExpress with the simple vision to export affordable and good-quality Chinese products to consumers around the world. Since then, we have noticed that our business boomed in Brazil and Russia, countries where light industry is underdeveloped and supply of some products is generally short. AliExpress is able to help Chinese exports to reach these consumers.
So far, our focus has been on language, logistics, and making payment easy. Our “glocal” strategy is to reach a global audience but remain local in our service and product offerings. We have established individual websites for each market to better serve overseas shoppers. These websites have localized languages, currencies, sizing, and logistics services to better serve the local customer. Currently, one fifth of our AliExpress and Tmall Global employees are foreigners. Without foreigners in our workforce we cannot understand local perceptions and customer needs.
Where the opportunities are
This year we launched Spanish and Indonesian AliExpress websites. We hope that Spain will become an important country for us and a focus region for European sales. Spain is a very interesting country. It has a strong geographical position, conveniently connecting several continents and is able to utilize Europe’s advanced logistics systems. Spanish products are also rich in variety and so are the products of its neighboring countries. But Spain lacks the diversity of products found in China, so there is a huge demand for Chinese-made goods. This is a market where Spanish imports into China and Chinese exports to Spain are equally important and its market we will pay special attention to.
Indonesia is another interesting market. Its merchandise is varied and price points are affordable. We hope that by launching an Indonesian AliExpress website, we can provide items not commonly found in Indonesia, like pet costumes, to the Indonesian consumer.
With no major e-commerce player in Indonesia, e-commerce is currently driven by online forums and social networks. So in the context of this market, we think AliExpress is capable of connecting buyers and sellers and will help local Muslim products be sold to the world’s large Muslim population.
Cross-border competition
Today’s cross-border e-commerce market is not very mature. There are many methods of buying from overseas other than Tmall Global. I hope that more platforms will join us in providing this service in order to better serve the average Chinese consumer. You would like to hear that Alibaba Group has a magic weapon that will help us beat our competitors. But my view is that Alibaba Group is very open to competition and we are not afraid of competitive forces because we believe that it will benefit the consumer ultimately and attract more players to join this trade.
Obstacles of international e-commerce
Thereis a lot of uncertainty in our business – from logistics, to currency controls and government policies. These are not problems that one person can just overcome. But there is also the issue of globalizing and remaining local at the same time. As we expand to new markets, users in those markets want to see languages they are familiar with, for example Russian consumers want to read web pages in Russian, not English.We also have to bear in mind that local consumers want to see the evaluation of purchases done by people from their own countries.
And in our business there are local preferences and superstitions to be mindful of. For example in Brazil, you can’t use the color purple and in Russia you can’t use the image of a black cat because it’s considered unlucky. Each country has its customs, its language, its preferences and even numbers that are auspicious. After four years of blood and sweat, we can share our past experiences with our merchants, advising our merchants which areas to focus on. This is the benefit of being a platform.
Future expansion plans
We hope that with the support of more professional partners, China Smart Logistics (an Alibaba-led consortium of Chinese shipping and logistics companies) will be able to build wider coverage for their cross-border e-commerce logistics network. This will allow China-made goods to reach global customers in a timely fashion. In the next two to three years we hope to increase our experience in this field and to re-imagine AliExpress into a platform where if you log onto with it with a Chinese IP address, you won’t be able to buy from the platform because AliExpress has become a platform that purely sells to the global customer. Everything from languages, to pricing and sizing and even the logistics methods will all cater to the overseas user.
