What can Australia learn from e-commerce giant Alibaba?
Ahead of the MEGATRANS2020 conference, Maggie Zhou, Managing Director Alibaba Group for Australia and New Zealand reveals how Australian organisations can improve their e-commerce offering at home and overseas.
What advice would you give to organisations who are looking to improve their e-commerce offering?
Maggie: One of the most effective ways of improving an organisations e-commerce product offering is to ensure the brand is continuously keeping up with market trends and consumer demands.
In China, consumers are constantly wanting to discover the latest and greatest product developments and e-commerce can provide deep consumer insights to aid the development of new products.
The Tmall Innovation Centre helps international brands compete in the Chinese marketplace by leveraging Alibaba’s deep cultural understanding and vast consumer insights which in turn helps brands design products suited to local tastes.
A great example is chocolate bar company Mars who have been in the Chinese marketplace for years, however with the help of Alibaba’s product development service, they co-designed the new Mala (spicy Sichuan pepper) flavour which proved to be popular with Chinese consumers.
What can we learn in Australia from the Chinese approach to e-commerce?
Maggie: Alibaba was founded in 1999 with the simple mission ‘to make it easy to do business anywhere’. Since then, millions of small and medium businesses have traded via our various e-commerce marketplaces creating over 40 million direct and indirect job opportunities in China.
In China, perhaps in contrast to Australia, e-commerce is a far more social experience for the consumer. Our marketplace Taobao, for example, has a range of social features from livestreamed user generated content, broadcasted content, online discussion forums, reviews and groups for specific types of consumers such as nursing mothers. I think there are a few takeaways for Australia here on how e-commerce can become more engaging for the consumer.
Are there similarities with the Chinese market?
Maggie: Between Australia and China there are probably more differences in e-commerce than there are similarities. China is a country with a large, dense population which means features like 30 minute delivery are far more feasible than in a large, more sparsely populated country like Australia.
As a whole, e-commerce in China is a very social, dynamic and ever-changing experience. Merchants and brands deploy a whole range of features, promotions and marketing activities seldom seen in the Australian market to engage and motivate consumers.
However, one similarity we see is the desire for retailers in both Australia and China to reinvent themselves in the digital era. Although the approach and progress may not be the same, retailers in both countries are seeking ways to revolutionise the customer experience and merge the online and offline environments to create what Alibaba calls ‘New Retail’.
If an Australian organisation is looking to start selling to consumers in China – what’s the best way for them to go about it?
Maggie: One of the most important considerations for global expansion is for brands and retailers to fully understand their target audience. Each market has different wants and needs so simply taking your product or offering into the China market in the same format as it is being offered in Australia will often not suffice.
In addition, Australian companies seeking to enter into the China market need to spend time to find the right partner. Alibaba’s flagship event, the Alibaba Ecosystem Expo, has proven to be a great success in terms of allowing Australian companies to network and loop into Alibaba’s wider ecosystem. Over the course of two-days at the 2019 Expo in Sydney, Alibaba Group saw close to 150 exhibitors and over 13,000 buyers and visitors, industry professionals, and businesses attend to explore the trends and opportunities that the Alibaba ecosystem brings to the Australian market.
What are some of the biggest challenges Alibaba is currently facing with regards to e-commerce?
Maggie: Demand for quality Australian products in China is at an all-time high and continues to grow. However, e-commerce in China is a dynamic and exciting space and brands need to be prepared for changes.
One of Alibaba’s values is ‘change is the only constant’. We are constantly adapting our offering and how we best engage both merchants and consumers to stay relevant and compete in this ever-changing digital world.
Which products tend to do well in China and which don’t?
Maggie: Australian products are thriving on Alibaba Group’s platforms. In fact, during the Double 11 Global Shopping Festival in 2018, Australia was the third most purchased from country with Australia’s Swisse and BioIsland brands ranking in the top five most popular cross-border brands by GMV.
This demonstrates the tremendous opportunity for businesses here to access China’s expanding e-commerce market. Due to Australia’s ‘clean and green’ image, products categories like healthcare products, mother and baby, wine, and snack and packaged foods continue to perform exceptionally well in China.
How can Australian organisations ensure they have low risk when it comes to trying to launch in China? What’s the best approach?
Maggie: Expanding to any new market will always carry some risk regardless of the approach. However, the emergence of e-commerce provides channels to market that are far lower in terms of both risk and investment than, say, opening your own offline store.
We encourage new brands to take time in identifying the right partners and truly understanding the intricacies of their target consumer. We also support brands to understand the full suite of Alibaba’s product offering to enable them to choose a path to market that suits both their capability, brand awareness and appetite for risk.
Is Alibaba still a good platform for organisations as they grow their reach in China or is it recommended they eventually launch their own facilities in China?
Maggie: Alibaba provides the fundamental technology infrastructure and marketing reach to help businesses leverage the power of the internet to engage with their customers. We support businesses and sellers across a range of marketplaces including Tmall, Tmall Global and their own dedicated stores powered by Alibaba Cloud.
The internet has made trade easier than ever before and many brands we work with rely on digital systems to connect with consumers to sell products without having a physical presence in China. Alibaba also has a number of ‘new retail’ channels, such as Freshippo and RTMart, to also make it easier for brands and merchants to access ‘offline’ channels.
How do you see the future of retail shaping logistics?
Maggie: Retail is shaping logistics in a number of ways such as using consumer insights to solve the problem of low transport efficiency and high logistics costs.
Cainiao Network, Alibaba’s logistics arm, is aiming towards better time efficiency of package deliveries. At present, Cainiao has reduced cross-border shipping times from an average of 70 days to less than 10 days for some countries. In the future, Cainiao is moving towards a single-day delivery system across China and a 72-hour delivery to the rest of the world.
We are also looking towards a greener future with more comprehensive green campaigns, such as Alibaba Green Logistics 2020. Enabled through world-class technologies, the campaign represents joint efforts across the Alibaba Group to improve material recycling, packaging, route planning and delivery methods to work towards a greener future.
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