How Alibaba is get­ting its name known

China Daily (Canada) - - ACROSSAMERICA - By CHANG JUN in San Fran­cisco

junechang@chi­nadai­lyusa.com

An­nie Xu, gen­eral man­ager of the US head­quar­ters of China’s e-com­merce gi­ant Alibaba Group, said that for 13 years, she and her team have been try­ing to ed­u­cate Amer­i­can small- and medium-sized en­ter­prises (SMEs) on how to buy and sell in China.

Their ef­forts have grad­u­ally been pay­ing off. In­stead of of­fer­ing only the flag­ship busi­ness of Alibaba.com, a B2B web­site, to US cus­tomers since the very be­gin­ning, Xu said her com­pany is now ex­ten­sively in­volved in fa­cil­i­tat­ing sales of US com­modi­ties into China, lo­cat­ing and in­vest­ing in promis­ing en­tre­pre­neur­ial teams in the e-com­merce field, of­fer­ing value-added ser­vices to its ex­ist­ing 800 mil­lion Ali­pay users.

“The last two to three years have been defin­ing mo­ments in the de­vel­op­ment of our US head­quar­ters,” said Xu, adding she has over­seen sev­eral ac­qui­si­tions of Sil­i­con Val­ley star­tups since 2010. She re­mains tight-lipped about Alibaba’s widely-spec­u­lated pos­si­ble IPO in the US.

Alibaba’s US cus­tomer base has grown ex­po­nen­tially, start­ing from a hum­ble 100,000 reg­is­tered users in 2000 to 7.7 mil­lion as of June 30 of this year, a yearly growth rate of 54 per­cent and ap­prox­i­mately 263,000 monthly ad­di­tions through the first quar­ter, ac­cord­ing to Alibaba.

US buy­ers shop in roughly 10 in­dus­try cat­e­gories: ap­parel, beauty and per­sonal care, ma­chin­ery, au­to­mo­biles and mo­tor­cy­cles, time­pieces, jew­elry and eye­wear, home and gar­den, pack­ag­ing and print­ing, gifts and crafts, con­struc­tion and real es­tate, lug­gage, bags and cases. Most of them use Alibaba.com to source and buy from China.

“Need­less to say, China has cheap com­modi­ties of high qual­ity, so it at­tracts in­ter­na­tional buy­ers, in­clud­ing a lot from the US,” said Xu.

The US has long been Alibaba’s strate­gic mar­ket, said Xu.

Un­like in China where it is a house­hold name, Alibaba en­coun­tered iden­tity am­bi­gu­ity and con­fu­sion along its way in the US.

Af­ter Ya­hoo’s $1

bil­lion in­vest­ment in Alibaba in 2005, “Amer­i­cans started to link Alibaba with Ya­hoo and re­gard us as an af­fil­i­ate”, said Xu.

To get the word out, Xu and her team went to trade shows na­tion­wide on a reg­u­lar ba­sis. “Please,” she would say, “we are not eBay, we are not Ama­zon. We are re­ally much more than that.”

In 2012, Tmall and Taobao re­ported joint trans­ac­tions of $170 bil­lion, which sur­passed the com­bined vol­ume of Ama­zon and eBay. The re­cent Sin­gle’s Day shop­ping event on Nov 11 gen­er­ated a to­tal of $5.7 bil­lion in trans­ac­tions through the two sites in 24 hours.

“That’s nearly four times the $1.46 bil­lion in online Cy­ber Mon­day sales in the US last year,” said Jing­ming Li, vi­cepres­i­dent and chief ar­chi­tect of Ali­pay In­ter­na­tional, a third­party online pay­ment ser­vice af­fil­i­ated with Alibaba Group.

Tra­di­tion­ally, Alibaba.com has been the only ser­vice of­fer­ing US clients a con­nect­ing with Chi­nese fac­to­ries, sup­pli­ers or buy­ers.

For AJ Forsythe, the 25-yearold founder of iCracked, who trans­formed a tiny on-cam­pus iPhone re­pair shop into to­day’s lead­ing on-de­mand re­pair and buy­back net­work for iOS de­vices in the world, it has been “quite a ride”.

At­tend­ing Cal­i­for­nia Polytech­nic State Univer­sity in 2010, Forsythe used to stay up un­til dawn in the school li­brary fix­ing stu­dents’ bro­ken iPhones.

Forsythe hap­pened to come across Alibaba.com and found six reg­u­lar qual­ity sup­pli­ers through its cus­tom­ized sourc­ing fea­tures. iCracked now has 100 stores na­tion­wide and hires 400 tech­ni­cians. In 2012, it re­ported $2 mil­lion in rev­enue and ex­pects to reach $10 mil­lion this year.

Forsythe said Alibaba.com has made be­ing an en­tre­pre­neur eas­ier.

This year, Alibaba US, in con­junc­tion with the US Depart­ment of Agri­cul­ture’s trade of­fice in Shang­hai, used the pre­sale chan­nel of its Tmall (B2C) web­site to con­nect Amer­i­can farm­ers and fish­er­men with Chi­nese con­sumers.

The goal of the joint ini­tia­tive, ac­cord­ing to Xu, is to give Chi­nese cus­tomers ac­cess to a va­ri­ety of US prod­ucts. The pro­mo­tions fea­tured more than 60 food cat­e­gories in­clud­ing Bos­ton lob­ster, Alaskan wild salmon and cod, raisins and fresh cher­ries from the North­west states of Wash­ing­ton, Oregon, Idaho, Mon­tana, Cal­i­for­nia and Utah, ac­cord­ing to Keith Hu, in­ter­na­tional mar­ket­ing di­rec­tor of North­west Cherry Grow­ers.

In 2012, more than 2.2 mil­lion boxes of US cher­ries were sold to China, mak­ing China the top ex­port mar­ket for the fruit out­side of North Amer­ica. Tmall sold 170 tons of cher­ries in the sum­mer pre­sale pro­gram.

In Oc­to­ber and Novem­ber, Chi­nese con­sumers showed even stronger en­thu­si­asm for US food when Tmall an­nounced its pre­sale of fresh and wild-caught Alaskan seafood. Chi­nese con­sumers pre­ordered 50 tons of high-end Alaskan seafood dur­ing the pro­mo­tion.

In Novem­ber, Tmall sold out of Alaskan king crab in two days. More than 1,550 floun­der, 1,400 hal­ibut, and 970 black cod were pre­ordered.

“In the first half of 2013, we saw a 500 per­cent surge in sales of im­ported food on Tmall,” Daniel Zhang, pres­i­dent of Tmall, said in a news re­lease, “and we are thrilled to be col­lab­o­rat­ing once again with the US Depart­ment of Agri­cul­ture to meet the in­creas­ing needs of our users.”

Ac­cord­ing to USDA, US agri­cul­tural ex­ports to China reached $546 bil­lion in 2012, up 34 per­cent from 2011.

CHANG JUN / CHINA DAILY

An­nie Xu, gen­eral man­ager of Alibaba’s US head­quar­ters, has been lead­ing the United States.

13 years of busi­ness ex­pan­sion of Alibaba, China’s No 1 e-com­merce com­pany, in the

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