Alibaba has appointed its first UK managing director former Tesco executive Amee Chande, signalling the Chinese giant’s intent to work more closely with British retailers.
Alibaba dominates the Chinese market and while the opportunities it offers on the radar for most Western brands, there is still a gap in understanding between accessing the region by traditional means, like offline distribution agreements, compared to Alibaba’s more comprehensive online offering.
However, the e-commerce behemoth has been quietly working to close this gap and the appointment of Chande is the most tangible sign to date that global domination is in its sights.
Despite making some in-roads – Unilever and Sainsbury’s are just some of the brands to have partnered with Alibaba in recent months – driving awareness and understanding of its service remains a key priority in the short term.
Speaking to The Drum, Chande explained: “We want to be the gateway into China. We’re the experts in understanding Chinese consumer’s needs and want to strengthen the relationship with British retailers to enable businesses to access that market.”
Chande said the needs of the Chinese Middle Class – its dominant user group – are no different to those of Westerners as they align to retailers that promise safety or provenance from their goods. But this dynamic is shifting as consumers in the East hunt for brands that can offer them international experiences, like afternoon tea. Alibaba wants to help them navigate this evolving trend.
It will also help its retailers source suitable local products for the Chinese market, assist merchants selling on Alibaba’s platforms, aid with outbound and inbound logistics, and facilitate online payments for Chinese consumers as well as offline payments for Chinese tourists.
Meanwhile, advising on local marketing could also prove essential as driving visibility of a store’s presence on its international marketplace Tmall remains a challenge. According to a review commissioned by the Wall Street Journal last year, 70 per cent of the stores are currently selling “almost no volume”.
There is no advertising inventory on the platform and so brands are generally required to invest in other marketing activity, namely social media, in the region to drive visitors to a storefront.
This will mean Alibaba's fledgling UK operation will have to scale up considerably from the handful of employees at present. Chande said it is taking the next few months to understand the key areas it will need to recruit into but technical expertise will be sought to fuel its Alipay and Tmall properties.
“We’ll bring in some people from China who are close to the business and pair them with local hires,” she revealed.
Since arriving in the UK, analysts have suggested that acquisitions in the region will play a fundamental role in Alibaba’s expansion plans. When fellow e-commerce giant Rakuten made its play for British pounds it was quick to piggyback on the success of Play.com, which it bought in 2011 for £25m.
While a $21.8bn IPO last year has given Alibaba plenty of cash reserves to play with, Chande declined to go into detail about its plans to acquire other businesses. While she didn’t rule it out altogether, she explained that “it’s simply too soon” to know if it’s necessary.
Beyond local brands and retailers, Alibaba is also looking to serve government partners who seek to access the Chinese consumer. The company’s enigmatic boss Jack Ma has been hired by British prime minister David Cameron to be part of his Business Advisory Group, with No.10 saying it wanted “someone who has real business experience and understanding of the Chinese market."
In tandem to its UK expansion, Alibaba has opened country offices in Italy and is planning to launch in France and Germany to help it move further into Europe.