Alibaba wants 2017 to be Year One for Chinese brand globalization

3 min read

Long gone are the days when Chinese online shoppers have to go through the troubles of shopping platform Haitao—where customers buy imported products from overseas e-commerce platforms or through shopping agents. For Chinese mainlanders, overseas products are now just a few clicks away through maturing cross-border e-commerce sites in China.

For most Chinese consumers, the whole idea of Haitao is buying high-quality products since their improving economic conditions allow them a better lifestyle. This changing consumption sentiment pioneered by China’s rising middle class has caused a revolution in the country’s manufacturing industry. “Made in China” no longer inherently means cheap, inferior, and unfashionable. Respectable Chinese brands have emerged and Chinese e-commerce platforms are well positioned to present Chinese brands to the world.

Chinese e-commerce titan Alibaba is among the first to foster the cross-border e-commerce trend through Tmall Global, a marketplace for overseas goods to be sold online in China. For the upcoming Single’s Day shopping festival, the company is turning the other way around in an attempt to bring Chinese quality brands internationally. A total of 100 Chinese brands from varied industries were included in the program, including Haier, Midea, Gree, HLA, Peacebird, Joyoung, Jahwa, and more.

Alibaba Tmall World
Alvin Liu, General Manager of Tmall Exports and Imports (L) & Hu Yuling, Tmall World Director (R) (Image credit: TechNode)

“Alibaba has separate units for cross-border e-commerce businesses. Tmall Global for import and Tmall World for export,” Alvin Liu, General Manager of Tmall Exports and Imports, introduced at a recent event. “Not long ago, both imports and exports businesses were based on a B2B2C model (combining business to business—B2B— and business to consumer—B2C—for a complete product or service transaction). The success of Tmall Global and the import business proved the feasibility of a new model with shorter links in the industrial chain. Now, it’s time to move on to the export business, a relatively untapped field that boasts more potentials. We are going to make 2017 Year One for Chinese brands globalization.”

Different from AliExpress, the online retail service made up of small businesses in China and elsewhere offering products to international online buyers, Tmall World primarily goes after the nearly 100 million overseas Chinese who live abroad but still have kept their tastes and spending habits. It’s not surprising that the firm has adopted this soft landing approach similar to Alipay’s globalization strategy since they are the readiest consumers thanks to similar cultural and social backgrounds. Popular Chinese migration destinations, like US, Canada, Australia, and some Southeast Asian countries are expected to see strong demand for this new business.

Logistics is a big concern in cross-border trade. Cainiao, the logistics affiliate of Alibaba, is trying to expand its logistics system overseas. Previously, customers were usually at loss to make their own choices among a series of couriers. Cainiao, as the official recommended deliver, will play a bigger role in this year’s Singles’ Day, according to Tmall World director Hu Yuling.

“Overseas users who choose Cainiao as their courier will get their packages within seven days. For Tmall Supermarket which puts emphasis on service, over 90% of the orders from Hong Kong will enjoy next-day delivery. During the upcoming Singles’ Day, Tmall World will provide free shipping service to first standard weight packages in ten countries,” Hu said.

In addition, synergy effects are being created between Tmall and Lazada, the Southeast Asian e-commerce bigwig in which Alibaba holds a stake. As of last month, dedicated Tmall channels have been launched on regional websites for Lazada’s five core markets in Singapore, Malaysia, Thailand, Indonesia, and Philippine.

“We have seen steady and strong growth from our partnership with Lazada. We are ready to smash the past records during Singles’ Day. For brands, there’s no extra work for them except the daily operation of Tmall stores. Tmall and our partners will solve the problems in logistics, website translation, payment and after-sales services,” Hu said.

The globalization initiative makes a lot of sense for both customers and sellers. “While China is entering winter around November, Australia and most of the Southeast Asia countries are still in summer, the geographical difference would allow flip-flop brands like Havaianas to sell all year round.”