E-Commerce behemoth Alibaba wants to teach U.S. small businesses how to sell to the Chinese. Why now? if your business model is selling online, the name of the game is not just innovation, but it’s growth. You must keep attracting users, While Alibaba currently boasts 500 million active shoppers, there are concerns from wall street about the company’s ability to maintain that level growth. The U.S. market is too good of an opportunity to pass up.
This week, Alibaba, Founder and Executive Chairman Jack Ma will kickoff the Gateway17 Conference in Detroit, MI on June 20th. The two-day conference will include presentations from Mr. Ma, Marcus Lemonis from CNBC’s The Profit, and legendary businesswoman, Martha Stewart. The conference will also feature workshops on the company’s eight different online products, including Alimama, Alibaba's online advertising platform, and TaoBao, their B2B sourcing product. The company is expecting 1,500 business owners to attend this inaugural event.
“We called it the Gateway17 conference because we see Alibaba as the gateway to China,” said Sharon Chan of the International Corporate Affairs team at Alibaba. She’s one of ten U.S. based employees of the Chinese e-commerce giant. She said they chose to host the event in the Midwest because they believe the Motor City is on the rise, “Detroit is the heartland of American innovation."
Sharing some insights into the Chinese marketplace, Chan continued, “Everything is mobile first. Chinese consumers like to do everything from one platform, including shopping and social media sharing. They go online to look for things to buy and entertain themselves.” This is backed up with data Alibaba shared that the average user onsite time is 28 minutes per visit. Apparently, Alibaba has incorporated the social media functionality of Twitter, Facebook and Pinterest (all of which are blocked in China) into their various e-commerce platforms. “We are much more than a marketplace, we are a marketing ecosystem for brands and retailers to build their brands in China,” Chan said.
While this is a major potentially customer base, it’s no surprise, that there are complex barriers to entering the China market. To sell effectively in China, U.S. businesses must understand culture, language, marketing,shipping logistics, payment processing, and brand protection. Alibaba’s Gateway17 Conference is an effort to educate American businesses on how to use their products and services to navigate this new frontier.
Global business expert Laurel Delaney, Founder and President of Globe Trade said Alibaba’s efforts to engage the U.S. small business market in exporting is nothing new. What is new is that Jack Ma wants U.S. small business owners to export to China.
There are four main verticals that will be the content focus for the conference: Fashion/Apparel, Everyday goods (Mother/Baby, Consumer Electronics), Fresh Foods, and B2B sourcing for wholesalers. The conference will also spotlight U.S. business owners who have already started selling on Alibaba, including Philadelphia-based health and wellness company Lucky Vitamin which sells vitamins and supplements, natural and organic beauty and skin care, groceries, snacks foods and beverages, pet products, and household cleaning products. Lucky Vitamin largely targets women who prefer a natural, organic, holistic lifestyle. Company founder Sam Wolf shared what his company’s experience has been in appealing to Chinese consumers on the Tmall platform, Alibaba’s virtual shopping mall. They launched late last year with 7,000 products. Wolf, a third generation business owner with more than 200 employees, said he has had modest results, but that’s still early. He said Alibaba has been very supportive of his marketing efforts, “We’ve built a real partnership with Alibaba.”
When asked what insights he would give a small business looking to start selling in China, Wolf had this advice, “I wouldn’t go into it half-way, you must go into it 100%. The Chinese are not the same as U.S. consumers, the way you display images with your products is very different. They like to see cartoon-like graphics and pictures of people using the products.” Chinese consumers are very cost conscious, too, and are always looking for a deal. He added that you’ll need dedicated customer service staff who know the language, “U.S. consumers are demanding, but Chinese consumers demand an even a higher level of customer service.”
For business owners who are interested in developing a Chinese customer base, Wolf noted that launching a virtual store on Tmall is like launching a brand new business. Here are some of the steps he took to launch:
1) Leverage Alibaba’s technical expertise
2) Plan at least 6 months before opening your virtual storefront
3) Hire experts who can orient your business to the Chinese consumer
4) Offer special pricing and bundle deals.
5) Invest in sponsored advertising to stand out
6) Hire dedicated staff who can speak Chinese to provide customer service.
Half a billion customers are an incredible new marketplace to explore. Alibaba has a great deal to teach U.S. businesses about launching a brand in China. However, Alibaba has been under fire recently for the volume of counterfeit goods sold through its online platform, and the New York Times has reported several protests at the company’s corporate headquarters over the soaring costs to advertise on its Alimama platform.
Going international is a real option for your small business, but realize that it will take a business model shift to do it well. If you can identify a niche product offering and have resources to invest doing business in China, it could be a gold mine.
This article was originally published as Alibaba wants to teach you how to sell in China on www.succeedasyourownboss.com