It is not all about Amazon: why retailers need a strategy for Alibaba

China’s Alibaba is building an ecosystem to dwarf that of Amazon, with ambitious plans to dominate not just eCommerce, but commerce. This tech behemoth provides substantial opportunities for international growth.

Thinking globally

A key pillar of Alibaba’s ambitions is helping international brands expand into China through Tmall Global, and developing efficient cross-border payment and logistics solutions. In pursuant of this, Alibaba is relentlessly focused on “One-Belt, One-Road”, the creation of a logistical network that connects China with dozens of Asian and European countries, and payment solution Electronic World Trade Platform (eWTP), with the objective of making it easier for businesses to expand trading capabilities worldwide.

Alibaba’s ability in mCommerce, cloud computing, payments, digital entertainment and logistics are exceptionally valuable assets when expanding into new markets, and for convincing brands and retailers to join its ecosystem. Creating a shop front on Tmall Global will enable brand equity to be maintained, while granting access to all the tools that remove the barriers and pain-points associated with cross-border eCommerce.

Becoming channel-less

Alibaba is bolstering its ecosystem to create seamless, channel-less experiences. A key element of this involves combining its digital marketing assets, namely UCWeb; Youku Tudou; Sina Weibo and Tmall Box, with its consumer media platforms – Tmall and Taobao, to deliver tailored, personalised experiences at every touch-point. More important though is its “online2offline” strategy - blending the best of digital and physical.

In its latest online2offline push, Alibaba has formed a strategic partnership with the Bailian Group, which operates 4,700 outlets in 200 cities including supermarkets, convenience stores and pharmacies. Initially the two firms will cooperate on supply chain technology using Alibaba's big data capabilities and will integrate Alipay payments with Bailian Group's existing membership program. By integrating the power of its mobile reach, real-time consumer insights, and technology capability that will improve operating efficiency. Partaking in this strategy will allow brands to become more discoverable, visible, and shoppable, provide experiences demanded by shoppers, while managing inventory more efficiently.

Getting smart with big data

In the era of the Internet of Things, and mobile creating a constantly connected consumer, Alibaba is looking to leverage its capabilities in cloud computing and big-data analytics, seeking strategic partners to fully monetize its assets to create highly personalised experiences to channel agnostic shoppers. With driving volumes heavily dependent on ensuring products are tailor-made for the nuances of each market, a new approach to manufacturing is required.

This is where Alibaba’s data becomes invaluable at informing brands in advance of what consumers want to buy. Indeed, brands are waking up to this flatter system of getting closer to shoppers. Alibaba’s recent deal with Mattel is a prime example of this mutually beneficial approach. It enables Mattel to make its products relevant to Chinese parents, while providing Alibaba with a way of monetizing its data on consumer preferences and habits. By partnering with Alibaba, brands will be able to leverage insights derived from the huge data resource to ensure products are relevant to the Chinese shopper.

While just a snap-shot of Alibaba’s ambitions, it should be apparent they provide huge opportunities for any business looking to capitalise on the opportunities in Southeast Asia.

To find out more about Alibaba join Kantar at its eCommerce Strategy Forum in Amsterdam on 17 & 18 May. Click here for more details. 

Kantar is also hosting a RETAIL NOW & NEXT: 2017+ Event in Amsterdam on the 30 March 2017. Register here to receive exclusive Essential Retail discounts on delegate passes.