Alibaba’s Internationalisation Efforts
The pressure is on. Michael Evans, President of Alibaba Group, said it best in the lead up to Singles Day that “Over the past decade, Alibaba measured our impact and our success by how much we changed China. Going forward, we will be judged by how much we change the world.” This Single’s Day, all eyes will be on what steps the company makes to change the world.
Although vague about specific plans to expand worldwide, we see three distinct actions directly relating to Alibaba’s internationalisation efforts.
Turning Singles Day into a Worldwide Day
Traditionally the Chinese government has been looked upon to provide support, growth and well-being for its citizens. In China, government support is shifting from solely state-run organisations to private companies as well. Alibaba is one of the three main Internet players in China, so naturally they have a big role to play in this structural change. All eyes are on Alibaba as it delves deeper into domestic markets and probes outward into foreign markets.
Alibaba aims to bring Singles Day to the world.
Once solely a Chinese celebration, Single’s Days is now being pushed worldwide. Each year Single’s Day growth in sales leads to a rise in media hype. And for good reason. Last year’s Singles Day sales reached ¥57.1 billion ($9.3 billion) which is expected to be surpassed this year. In just one minute and twelve seconds GMV sales reached ¥1 billion with total GMV for cross-border commerce surpassing last years numbers in one minute and 45 seconds. In 2014 consumers in 217 countries and regions shopped up a storm with over 200 countries doing the same just one hour and 15 minutes into the event. An international angle is being heavily pushed with foreign products being front and center in advertising and promotions in China. Now it is time to see if Alibaba position itself overseas as successfully as it has in China. An example of recent foray to reach markets outside of China Alibaba is marketing in southeast Asia through online advertising, videos, and social media in order to raise their profile. While smaller markets may be easier for Alibaba to gain ground in, it is yet to be seen if Alibaba can gain a foothold in more developed markets such as North America and Europe.
In the U.S. November 11th is already a holiday, Veterans Day. Many retailers already offer Veterans Day sales and discounts. The following period between Halloween and Christmas is loaded with shopping holidays and promotions. This could go either way for Alibaba: Americans might embrace another day with killer discounts or they might disregard Singles Day as just another day. Alibaba has been cautious in their U.S. efforts to this point, and going in head first is not in their best interest. It will be interesting to see where Alibaba’s North American efforts lead.
Post Partnerships
Another advantage for Alibaba as they move into international markets is their partnerships, specifically those with post offices around the world. Partnering with postal groups from Australia Post to Singapore Post to the U.S. Postal Service implies that Alibaba is developing inroads into economies outside China. Although there has only been limited details concerning the opening of these routes they are likely beneficial to Alibaba in two key ways: sourcing products to bring to China and delivering Chinese products to the world.
Cross-border commerce is a main component of partnerships helping companies tap into the Chinese market. But commerce is a two-way street and Alibaba’s efforts to develop logistics worldwide is something to keep an eye on.
A Star Studded Shindig
Who doesn’t like a party? And what better way to bring Alibaba to the world? Much like the TV show leading up to China’s biggest holiday, Spring Festival, Alibaba is hosting a gala the night before the big shopping day. Complete with big celebs from star director Feng Xiaogang to America's Adam Lambert and an ad from Kevin Spacey as the President of the USA as well as guest appearance from Britain's Daniel Craig. Alibaba's gala ensured that there's plenty of attention on Singles Day, signaling the efforts to make it a true holiday. This effort of course starts in China but we wouldn’t be surprised if Alibaba promotes and encourages celebrations worldwide much like we see Chinese New Year decorations and celebrations worldwide.
Singles Day is one part of the major effort to make Alibaba as synonymous with shopping in the West as it is in China. This is the next test for Alibaba’s foray into other markets and we will be watching closely.
The Early Results
By 1:15am, consumers from 200 countries and regions had made a purchase. Chinese couldn't get enough international products, with Japan, USA, Korea, Australia and Germany being the top-5 origins in the first hour. Top imported brands included Aptamil, Nurtion, Bellamy’s, Cambridge Sachet, Missha, Coach, Avenue, YSL and Clarks.
