The consumer first of all. In the e-commerce era, platforms compete to those who can better respond to consumers’ demands. What does Alibaba do to meet the needs of brands that want to enter the Chinese market indeed? Cifnews spoke with Laura Pho Duc – Head of Marketing & Communication, Alibaba France – during Lengow Day 2018 in Paris
While international brands are struggling to understand how to enter the Chinese digital market, from the top of the nearly 600 million active users of Alibaba, the company confirms its leadership in the marketplace sector.
International countries are experiencing a huge penetration of digital habits within every aspect of the consumer’s everyday life, but for what concerns online purchases no one beats the Chinese customer. In this context, e-commerce platforms take advantage of integration between online and offline market providing all-inclusive services and growing like never before.
With 15% of retail sales in China, Alibaba is the giant that is making this marketplace revolution even more global. “The success of marketplace comes from the chance the consumer has to get access to products in a cross-border market,” says Laura Pho Due, Head of Marketing & Communication, Alibaba France.
Alibaba, founded in 1999 by Jack Ma, is based in Hangzhou. The group includes several companies active in the field of electronic commerce as well as in cloud computing services. With 25,000 employees across three continents and a street value of 231 billion dollars in 2014, this is certainly one of the engines of the Chinese economy. As one of the first partners of Cifnews, Alibaba has been also participating in Cifnews’ CCEE events since the first edition in Shenzhen, in 2017.
Although it has found its success in the Chinese market and after having built its empire in China, it has been a long time since Jack Ma’s company has spread globally. Following this desire of heading west, in 2014 Alibaba made an agreement with Business France – fusion of Ubifrance and AFII – for the promotion of “Made in France” products on the Chinese platform. In the same year, the Chinese company entered the history of the finance with the largest stock exchange ever made and thus opened the door for unprecedented visibility into the Western world.
The Hangzhou-based group opened then its office in Paris, managed by Sebastien Badault, a former employee of Amazon and Google, with the mission to help French and European brands enter the Chinese market.
“In Europe, our top priority is to engage with existing local partners and help European brands, retailers, small businesses, and government partners understand the opportunities China offers and how Alibaba can help them access this market,” said Michael Evans, president of Alibaba Group.
The project is to build a supply chain of European products making them available to the Chinese online market. The Paris office, located in the II arrondissement, in 2017 has reached a turnover of more than 3 million dollars with a budget growing 993.85% between 2016 and 2017.
According to Laura, “Alibaba’s French office will serve as a gateway to China for international brands in order to make business anywhere”. The main intent is to help French companies understand the Chinese market and to facilitate European businesses in this country. At the same time, the Paris office offers help and advice to French companies that want to go through a digital transformation. Thanks to their France-based cloud, Alibaba helps them enter technical and data innovations.
However, Laura also explains that there is a strong presence of Chinese tourists in France and they often have to cope with the digital gap, especially for what concerns payment via smartphone. For this reason, the Paris staff is helping French retailers with Alipay – Alibaba’s payment system – in order to reach more Chinese tourists and consumers in the country.
Recognizing the great “gateway to China” that Alibaba offers, L’Oreal China is one of the last brands that started a partnership with Tmall Innovation Center, a particular branch of Alibaba’s Tmall that is responsible for guiding brands during all the stages of the production using insights to create products that meet consumers’ demands.
Tmall Innovation Center helped L’Oreal to develop new men’s cosmetics products specifically designed and developed for Chinese consumers. And now Chinese consumers could buy champagne just with one click.
Likewise, the well-known French brand Moët Hennessy has started a partnership with the Chinese group for the development of both online and offline initiatives that could reach a younger consumer audience in China, which is its second largest market after the US.
Thanks to this partnership, at the end of August, Moët Hennessy launched a limited edition spirit exclusively on Tmall. The offer went sold out on the same launch day, creating a new sales record for the store in the first 15 hours. However, this is just one of the many successful initiatives launched by the French brand in collaboration with the Chinese company.
The trend in 2019 seems therefore to be precisely that of focusing on the consumer developing innovations driven by consumers’ habits. Although the approach is different when compared with international competitors, the common trend is always to understand consumer behavior in order to develop technologies that facilitate the purchasing process and, consequently, the sales.
“I think that what is very interesting and strange but at the same time not surprising is that we all are very focused on innovations driven by the consumers and on the behavior of the consumers,” states Laura Pho Duc in the interview.
The buyer has thus become a focus of attention and Alibaba is a champion in understanding habits and trends of Chinese users. This is why the opening of international offices turns out to be a great opportunity for retailers that want to succeed in the Chinese market. An opportunity that nowadays many brands are eager to take.
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