Retailer’s perspective: inside ‘Alifest’ Netreprenuers Summit with DealsDirect September 13, 2013 20:54
It has been my pleasure over to be a guest of Alibaba.com for their annual 2011 ‘Alifest’ Netrepreneur Summit in Hangzhou China. I had expected to see a significant shift in Chinese e-commerce since my last visit two years ago, but predictably I was blown away. Truly a slumbering giant has awoken and its footprints will reverberate around the world.
I should say that I learnt fairly early on in my association with China never to compare the scale and size of China with Australia, or for that matter any other country. To illustrate – I was with a high level delegation of Australia Post in 2006. Around the dinner table, the head of the Australia Post delegation declared to his China Post hosts that in fact Australia Post had the largest retail footprint in Australia with close on 4000 outlets. The China Post head replied, without any arrogance, that China Post had 85000 outlets. You can be sure we all looked down and carried on with our meal!
Whilst I have always admired the Alibaba business, an e-commerce platform that connects manufacturers in China (and the world) to international buyers, I was keen on this trip to find out how the Taobao business was going. Taobao is an offshoot of Alibaba, and could be broadly described as the eBay of China (it was well known that Taobao decimated eBay International’s efforts to set up shop in China a few years back). To give you a sense of some topline numbers – Taobao has 500 million registered users (that’s right half a billion), on track to achieve one trillion RMB of gross merchandise sales by 2013. Less information was available to me on their Alipay business (again, the PayPal of China), but if you look at the picture of my visit to Alibaba.com, you will see on a data screen in the top left hand corner displaying the figure 134 352. Well that is the number of Alipay new subscribers for that day alone, and it was lunchtime!
I was given a guided tour of the Alibaba ‘Campus’ – the modern headquarters of the Alibaba Group in Hangzhou. Whilst the campus has around 7000 employees in this modern facility, complete with gyms, recreational areas, Starbucks, Alicool retail shops selling Alibaba merchandise, a library and more, the group employs around 18000 people around the world.
The Alifest Summit was hosted by the founder of the Alibaba Group, the self-deprecating and elfin like Mr Jack Ma. An entrepreneurial hero and the leading figure in e-commerce growth in China. Whilst he is an unassuming individual, his rock star status is undoubted, as a few thousand TaoBao and Alibaba entrepreneurs packed the modern arena.
I first met Jack some five years ago at Web.20 in San Francisco. He was one of the keynote speakers, and got up in front of five thousand geeks and declared “I am Jack Ma, and I know nothing about computers!” His self-deprecating commentary had a key message – you need to develop applications and solutions for netizens that are simple and functional. That is the key to online success.
An interesting speaker list at this years Alifest included Jet Li, an international Kung Fu Hollywood hero, now a philanthropist, and Thomas Friedman, the best- selling Pulitzer winning international author of The World is Flat , also the head of Proctor and Gamble in China, and some well recognized Chinese entrepreneurs and academics.
While undoubtedly the focus was on the massive opportunity, there were numerous messages around philanthropy, corporate social responsibility, community and ecosystems, openness and transparency. Jack gave advice in the Q&A sessions on business, marriage, feminism, and much more. He stressed with passion the continuing need for Chinese manufacturers to focus on quality not just price, as a differentiator. And this was a prevailing theme with all speakers at the event. He patiently addressed a number of questions from very passionate Taobao entrepreneurs. Every person who got the roving microphone in the great hall to ask a question sounded like they had won the lotto!
In my last day in Hangzhou, I attended the 2011 Net Products Fair. Now product trade fairs are not unusual in China but this represents a new chapter. Historically China fairs have had one target market – international export. But these are new fairs set up for the millions of Taobao sellers making a full time living on Taobao. I am sure eBay Australia sellers, PESA members and smaller online retailers would love something like this in Australia. A very strong fashion focus was evident at the fair, with some quality merchandise on display. Local Chinese brands that I did not recognize but with a strong European flair.
I have visited China many times over the last eight years or so. And every time I am struck by determination, focus and passion of Chinese ‘netrepreneurs’. The Chinese domestic market has become the jewel in the crown for manufacturers and retailers worldwide - both bricks and mortar and online. The world’s leading brands including the top luxury brands, also have their eyes and future strategy, firmly on China. Whilst it is not a market for the faint hearted, there are clearly challenges, it is indeed a market that is echoing the shift of commercial power from the west to Asia. It is a market that e-commerce entrepreneurs should be exploring. And the time is now.