Ahead of InternetRetailing Expo (2017) and sister event eDelivery Expo we’re running a series of previews and interviews looking ahead to the event. Today we hear from David Lloyd of Alibaba .
InternetRetailing: In your view what is the primary reason that UK traders need to be selling to China?
David Lloyd, business development director, at Alibaba: In today’s highly competitive global market, the ability of a brand to gain exposure in new regions is invaluable. China is close to becoming the world’s largest retail market, with the total sales of consumer goods in the country reaching 33.2 trillion yuan (£3.8 trillion) in 2016, as cited by China Data Online. To put that into perspective, Retail Economics reports that the UK’s total sales reached £358 billion in the same year – less than 10% of China’s retail figures. Additionally, China has 6.9% GDP per capital growth rate, compared to just 1.1% in the US, so the opportunity for sales growth and new customer acquisition is significant. The country has already become the world’s largest eCommerce market, whilst its consumption growth by 2020 will be equivalent to the total UK annual consumption.
The opportunity doesn’t lie solely in the size of the population: China’s growing middle-class consumer base means the appetite for foreign products and brands, often perceived to be of superior quality and representing luxury, is constantly on the rise. This has played a key role in stimulating this growth in China’s retail market as businesses from around the globe respond to the increasing demand for foreign brands, connecting with consumers in what is the world’s most populous country.
IR: What is the major challenge of selling to China?
DL: Setting up operations in countries such as China can be difficult and is not without its risks. Challenges include the usual complexities of cross-border trading such as financial commitment and an unfamiliar regulatory landscape. This is amplified by more basic challenges such as not knowing the language. Western brands wishing to seize the Chinese opportunity use platforms like Alibaba’s B2C platform Tmall Global, which can help them access over 400 million active buyers without any need for a local bricks and mortar set-up. The good news is that we can help overcome the undeniable complexity because beyond our marketplaces we are leaders in payment, logistics and brand and performance marketing: we believe we can be a one-touch solution for UK brands looking to enter China.
IR: Why sell via a marketplace rather than directly?
DL: Deciding to take on the Chinese market can be challenging due to the perceived high amounts of time and effort required to enter the market. However, partnering with a trusted marketplace is one way to make the process more manageable. From advice to legal counsel and day-to-day sales consultancy, a good marketplace will be with you every step of the way.
The Alibaba marketplace is an integral part of the retail landscape in China, with the majority of Chinese ecommerce done through our platforms. We are well placed as an online and offline marketplace that enables merchants to build their brands and engage with consumers as well as simply sell online.
This significance is indicated by a recent report by Goldman Sachs which, when predicting that China’s online retailing market will grow to $1.7 trillion by 2020, states that Tmall will have over a 70% share in the B2C market. Tmall currently hosts 14,500 international brands, a figure that has increased dramatically from the 5,400 who were on the platform in 2015, with the most popular products coming from Japan, the U.S, Korea, Germany and Australia. Each brand has access to its own account service, which handles all operations and marketing support, data analytics and payment systems. This creates time savings as well as giving access to a local network of marketing, retail and sales professionals that understand how best to attract consumers and keep pace with develop
There are also a number of marketing promotions which brands can take advantage of to boost sales and brand awareness. An example is 11.11, which Alibaba has transformed into the biggest shopping holiday of the year, as testified by the record-breaking total sales of $17.8 billion GMV achieved on November 11th 2016.
IR: Aside from your own keynote presentation, what are you most looking forward to at IRX 2017?
DL: I’m really looking forward to seeing what I can learn and who I can meet to help inform our business in the UK. I’m particularly interested in developments in omnichannel, as this in an area where Alibaba is making huge investments in China right now, and of course I always relish the chance to talk to brands about the huge opportunity that accessing the Chinese market can hold for them.
David Lloyd is giving the keynote address in the Marketplaces Revolution Conference, which runs on April 6 at InternetRetailing Expo, at the NEC in Birmingham. His presentation, Marketplaces as a gateway to the East is at 9.30am. To learn more about IRX 2017, its sister conference eDelivery Expo and to register for free, visit www.internetretailingexpo.com and www.edeliveryexpo.com.
Attendees can also get a 25% discount on their train fare to the NEC when they book through the IRX or EDX visitor information website.
