Keynote Session: The Rise of Alibaba: How to Expand Your Business Through

Keynote Session:
The Rise of Alibaba: How to
Expand Your Business Through
the Global Marketplace
PRESENTED BY:
James Hardy
EMEA Director
Alibaba.com
How to Expand Your
Business Through
the Global
Marketplace
Today’s presentation
• The Alibaba Group.
• The China opportunity: size of market.
• Different potential "big picture" strategies for entering Chinese
market. An overall philosophy.
• Tmall.com: How to get onto it, cost of getting on, benefits of
being on it.
• What Chinese consumers like to buy from European
manufacturers - top categories.
Alibaba Group’s Mission is…
To Make It Easy To Do Business Anywhere
Alibaba: The Beginning
1999
Hangzhou, China
The Alibaba Eco-System
Financing
Customer services
agents
Online retail
software designers
Taobao
Models
Software & app
developers
Online
marketing
Orange-collar
workers
Logistics
infrastructure
Consumer
protection
program
Logistics
Partners
Buyers
Sellers
Transaction safety program
Feedback & rating system
Rules of marketplace
TECHNOLOGY
DATA
Alibaba e-commerce infrastructure
TEAM
Social
network
O2O
The Alibaba Group
China E-Commerce
Online retail marketplace
Online shopping mall
Flash Sale
Shopping Search Engine
Wholesale
Cross-Border E-Commerce
Online retail marketplace
Online shopping mall
Online wholesale marketplace
Cloud Computing
Mobile Apps
Operating System for Mobile & Smart TV
Logistics
Online Marketing Service Platform
China vs The West: The Path to E-Commerce
China: The Opportunity
• Population: Over four times the US (1.35bn vs 320m)
• Explosive growth in China’s upper middle class
“By 2020, we project that Chinese e-tailing will match the
combined size of today’s US, Japanese, UK, German and
French markets reaching $420bn – $650bn in sales.”
McKinsey Global Institute, March 2013
Chinese Internet Users & Penetration
As a % of Total Population
No. of Internet Users (million)
1200
900
34.3%
28.9%
600
384
457
38.3%
513
42.1%
564
49.5% 51.2%
47.5%
45.8%
618
645
675
700
60.0%
50.0%
40.0%
30.0%
20.0%
300
10.0%
0
0.0%
2009 2010 2011 2012 2013 2014E 2015E 2016E
Source: CNNIC, January 2014, for actual numbers; Euromonitor, August 2013 for estimated
numbers.
E-Commerce potential in China
China Online Retail GMV & Penetration
Online Retail GMV (US$ billion)
% of Total Retail Trade
800
10.0%
9.0%
600
7.7%
6.2%
400
200
4.3%
2.1%
42
2.9%
74
10.8%
581
487
395
298
12.0%
10.0%
8.0%
6.0%
4.0%
210
127
2.0%
0
0.0%
2009
2010
2011
Source: iResearch, January 2013
2012
2013
2014E 2015E 2016E
China E-Commerce in context
November 11 “Double 11”
Annual Signature Promotional Shopping Event
Every year, history is made on Taobao Marketplace and Tmall…
2013
11.11. 2013: RMB 36.2 billion
More than 2x 2013 Cyber Monday (US$2.29 billion)
154 million Packages Generated
China: Overview of E-Commerce Strategy
THE FUNNEL
SEARCH, SOCIAL MEDIA, INFLUENCERS, DISPLAY
BRAND SITE OR MICROSITE OR WEIBO
BRAND WEBSITE AND/OR TMALL.COM
China: Online Strategies for Market Entry (1)
Large Brands
• Already have brand awareness, so it’s all about traffic and
conversion
• Focus on conversion channels such as search (Baidu/360 paid
search, Baidu/360 organic search)
• Brandzone:
China: Online Strategies for Market Entry (1)
Large Brands (cont)
• Leverage organic traction: Baidu Q&A, Baidu answers, Baidu
wiki, mentions on social channels, blogs, forums
• Use influencers: Peer-to-peer is huge in China. Influencers more
important than push advertising in China
• Mobile strategy: Responsive site, engagement with existing
followers on social platforms, Weibo
• Own site hosted inside China and/or Tmall
China: Online Strategies for Market Entry (2)
Smaller Brands
• It’s all about building brand awareness
• Weibo: develop a content strategy, hire an intern
• Key influencers: majority of smaller brand budget goes here
• Drive traffic to Weibo then Tmall.com, OR microsite then
Tmall.com
China: Online Strategies for Market Entry (3)
Tier 2 and 3 city market strategy
• About 200 Tier 3 cities
• Biddable media can target by province or by city (eg. Baidu
PPC, Weibo ads)
• Mobile is critical due to poor infrastructure in Tier 2/3. Use
liquid/responsive website
• Tmall.com aligns well with this strategy at the point of
conversion
Online Accesses ALL of China’s Cities
Source: McKinsey Insights China Database; McKinsey Global Institute Analysis. 2012-13.
China: Offline Strategies for Market Entry
• Offline: Estate
Tmall.com can be used in conjunction with offline
Selling on Tmall.com – two entry methods
Tmall.com: Summary
Chinese Consumer Preferences
Chinese Consumer Preferences
• Heritage products:
 Uggs from Australia;
 Shoes from the UK;
 Honey from New Zealand;
 Cherries from the US
• Tell a story……
Which China Strategy is Right for You?
• No-one knows an exact strategy for China – no big market has
gone almost direct from agrarian to ecommerce
• No “one size fits all” solution
• You’ve got to be IN the market
• Focus on a philosophy which mimics Alibaba’s
• Be Fast! (“Embrace Change”)
• Little Bets. Test and iterate.
THANK YOU !