Getting a share of the lucrative Chinese consumer market is not as big a challenge as some international brands might imagine, according to Alibaba Founder and Executive Vice Chairman Joe Tsai.
Speaking in the closing minutes of the 11.11 festival, he said the success of this year’s event reflected the Chinese economy.
“The Chinese economy has bounced back to pre-pandemic levels,” he said. “If you look at Q3, GDP growth was 4.9%. And if you look at e-commerce, Q3 growth has been about 17% year-on-year for the entire e-commerce sector.”
Businesses based in other countries where pandemic restrictions on movement and on shopping in particular are still hurting trade should be digitizing and looking to expand into China if they are not already there.
“I would say that getting into the China market is not as hard as you think. Because of e-commerce,” Tsai said.
“E-commerce is so well developed in China, which has the highest e-commerce penetration in the world: 25%, and China has developed very good infrastructure that supports e-commerce.
“But I think the thing to focus on first is understanding the Chinese consumer and what they’re looking for. And what are the ways in which you can better engage them?
“In China today, shopping is a sport and it’s entertainment. It’s not just about going onto a website and scrolling through some product catalogue; you need to engage the consumer. You need to give them a full experience, almost an immersive experience.”
Tsai says even small international businesses can be a hit via e-commerce in China.
“My advice is, whether you’re already doing e-commerce or you’re starting to learn how to do business online, even the smallest of businesses can be global because of the internet.”
Alibaba Group president Michael Evans said the success of US-based brands during this year’s 11.11 festival showed there were big opportunities for businesses of all sizes. In total, US brands generated over $5 billion in sales this 11.11.
“Of course, the big businesses, the Apples, the Nikes, they’ve done extremely well,” he said.
“But one of our big focuses this year was small businesses … because we wanted to show that with technology and with focus, the China market is open to everybody. Not just the big guys, the little guys as well.”