Alibaba: New kid in US e-com­merce

China Daily (Canada) - - BUSINESS - By MIKE BASTIN

Alibaba’s an­nounce­ment that two of its wholly owned Amer­i­can sub­sidiaries will launch a new e-com­merce site in the US is fur­ther signs of its am­bi­tious in­ter­na­tional ex­pan­sion plans.

An Alibaba spokesper­son has said sub­sidiaries Ven­dio and Auc­tiva will in­tro­duce a site brand-named “11 Main”. The site’s aim is to sup­port se­lect mer­chants with high-qual­ity prod­ucts in fash­ion and jew­elry.

De­spite the fact that Alibaba’s Taobao and T-Mall sites both en­joy great pop­u­lar­ity across China, the com­pany has ex­pe­ri­enced limited suc­cess over­seas.

Alibaba’s in­ter­na­tional ex­pan­sion steps, no mat­ter how small, should not be in­ter­preted in the same way as other com­pa­nies at a sim­i­lar stage of ex­pan­sion and with sim­i­lar global am­bi­tions.

En­trepreneurs of­ten es­chew the typ­i­cal, mar­ket re­search­led ap­proach and make mar­ket ex­pan­sion de­ci­sions largely on an in­tu­itive feel and heuris­tic judg­ment.

The fast-mov­ing world of e-com­merce pro­vides a per­fect ex­am­ple of an in­dus­try in which such an en­tre­pre­neur­ial style could not be more ap­pro­pri­ate. Alibaba, which has re­tained a strong en­tre­pre­neur­ial cul­ture de­spite rapidly ex­pand­ing, is well-placed to ma­neu­ver swiftly and deftly in the US and other over­seas on­line mar­kets.

Alibaba’s plans to pen­e­trate the US mar­ket, in pref­er­ence to other mar­kets closer to home, also sig­ni­fies its strong de­ter­mi­na­tion and in­ner be­lief.

Chi­nese com­pa­nies, quite un­der­stand­ably, of­ten se­lect Asian or Mid­dle East­ern mar­kets for their ini­tial or first-wave of over­seas ex­pan­sions. Ge­o­graphic prox­im­ity also tends to be cen­tral to the typ­i­cal mar­ket re­search-led ap­proach to in­ter­na­tional ex­pan­sion, in which cul­tural sim­i­lar­ity and eco­nomic con­sid­er­a­tions pre­vail over global am­bi­tion and in­tu­itive mar­ket un­der­stand­ing.

It is en­cour­ag­ing that Alibaba’s US mar­ket “strike” will be “man­aged” by the com­pany’s rel­a­tively small busi­ness-to­busi­ness unit, Alibaba.com, in keep­ing with an en­tre­pre­neur­ial ap­proach to mar­ket ex­pan­sion. The small unit should al­low Alibaba to re­tain an en­tre­pre­neur­ial busi­ness model in the US, where in­no­va­tion and flex­i­bil­ity are key to fu­ture suc­cess and ex­pan­sion.

Its ini­tial choice of in­dus­tries, fash­ion and jew­elry, also in­di­cates a shrewd and pos­i­tive strate­gic ma­neu­ver. These in­dus­tries, with their high­qual­ity branded prod­ucts and con­sumer de­ci­sion-mak­ing based on high lev­els of emo­tional at­tach­ment, should pro­vide an ex­cel­lent plat­form and as­so­ci­a­tion for Alibaba’s cor­po­rate brand im­age.

Fash­ion and jew­elry are the hall­marks of “qual­ity” and “pre­mium brand im­age”. Alibaba has re­jected “low cost” and “low qual­ity”, which are still far too of­ten the cen­tral tenets of Chi­nese com­pa­nies’ cor­po­rate strat­egy and cul­ture.

Alibaba’s dis­tinc­tive en­tre­pre­neur­ial cul­ture should not only serve it well as it ex­pands into fiercely com­pet­i­tive and fast-mov­ing in­ter­na­tional mar­kets but also is cer­tain to in­fuse other Chi­nese com­pa­nies and budding Chi­nese en­trepreneurs with con­fi­dence and mo­ti­va­tion.

Alibaba may be the new kid on the US e-com­merce block, but it is a kid burst­ing with en­tre­pre­neur­ial flair and cre­ativ­ity. What a “way to go” to the US! The au­thor is a vis­it­ing pro­fes­sor at the Univer­sity of In­ter­na­tional Busi­ness and Eco­nom­ics in Bei­jing.

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