British retail guru Mary Portas explains why the west should take note of Alibaba’s success.
In China, Alibaba has many different tentacles within its business offering. Its rich ecosystem of online marketplaces and vast range of B2C, B2B and C2C services aims to make it easy to do business anywhere. The group has been in Europe since 2015 and, from what I gather, focused on helping businesses grow within the Chinese market.
The UK, France, Italy, Germany and Spain have done particularly well moving into China. The reason? These are the markets whose cultural heritage, lifestyle values and ‘nation branding’ are top of mind for consumers in China. Elements that particularly resonate with the new middle class who drive the demand for top-quality goods, are fashion, food, cosmetics and mother and baby.
It is fair to say, however, that it’s a one-way street at the moment and they have yet to rumble the retail sector this side of the world.
In the UK alone, research by Millward Brown showed more than half of us aren’t aware of what Alibaba does. For those that are, many have questioned the credibility and authenticity of a Chinese brand due to a lack of trust – research firm Qualtrics has shown 38% associate the brand with counterfeiting and unethical production.
Alibaba is often referred to as the ‘Amazon of China’, but this ignores some significant differences. Where Amazon has built worldclass logistics operations to optimize delivery, Alibaba has opted for an asset-light approach where customers or brands ship directly to other customers.
I don’t think, at this moment in time, the likes of Asos or eBay are under direct threat – but it’s only a matter of time. What is important for the west, however, is to look at the way Alibaba operates and to learn from it. It is a true pioneer when it comes to developing shopping techniques. It is light years ahead when it comes to mobile shopping. Alibaba has constantly looked to optimize and enhance its digital consumer experience and it is constantly iterating and launching new products aimed at the immediate future.
In our 20-year history as an agency, we’ve never had so many clients ask us for advice on how to navigate the changing ways consumers are buying. Data has meant we’re able to garner deeper understanding than ever before, and tech has meant that we’re having to feed a new breed of retail omnivore. I feel this is what we can learn from – the leading brands and retailers are looking at new ways to engage and interact with customers, trying them out and learning from them.
It’s not always about online either – just look at Singles Day. It’s this kind of highly emotive, entertaining and in-limited-supply event that we can seek to emulate.
The fact that Jack Ma was one of the first businessman to meet with the US President may well be a warning sign. Having said that, he might well be doing great things and he might well have met Trump – but who trusts Trump?
You can read the rest of this article in the May issue of The Drum magazine which, following on from April’s Amazon issue, is devoted entirely to eastern internet giant Alibaba. In it we explore how Alibaba is shaking up retail, spearheading a move away from cash, and its involvement in China’s social credit system.