According to one Alibaba executive, 100 Maserati cars sold within 28 seconds and 300 Alpha Romeos were purchased in less than half an hour. By any standard, that’s the kind of sales volume that gets noticed, especially in the automotive industry, and Alibaba is using their marketing clout to coax U.S. retailers into their online tent. “Things you could never imagine selling online, are selling in china,” said Yin Jing, who leads the platform for Alibaba’s home appliance sales.
Alibaba’s goal is 1 million U.S. businesses
Jing spoke last Friday at a press conference in Silicon Valley to promote Tmall, his company’s platform for international brands and retailers to sell their goods and services in China.
Alibaba wants to increase the number of U.S. businesses selling on its marketplaces from 7,000 today to over 1 million. “We understand the consumer very well,” said Liu Bo, the general manager for Alibaba’s Tmall platform. “We believe that the market in China will help new brands become successful.”
To underscore that point, Alibaba arranged for executives from several Silicon Valley companies to join them at Friday’s press event, which was held at the Computer History Museum in Mountain View, California. Representatives from Intel, Microsoft and Radius were among those participating. Marsha Ma, Microsoft’s senior director of eCommerce in China, described how Tmall’s robust data gathering has helped her company understand customers and market trends.
“Tmall has the best data available,” said Ma.
Big data plays a key role for Alibaba and their sales efforts. Jing described one example where the company noticed data results pointing to a boom in health and fitness products among consumers. They believed this would lead to a drop in leather shoe sales and, sure enough, footwear manufacturers are now converting their product lines to running shoes instead.
The company has come to rely on big data analytics for another purpose – counterfeiting. Alibaba has been using data collection to identify bootleg products on their shopping sites and announced late last year that they had sent over 800 counterfeiters to jail as a result.
While Alibaba is clearly seeking to dramatically increase the number of U.S.
companies who participate in Tmall, there are still concerns among smaller merchants about the cost for entry. According to recent press reports, Tmall requires an annual fee that can run as high as $10,000 and a security deposit of up to $25,000. Alibaba takes a commission on each sale and there is a processing fee for payments made through Alipay, a payment processor.
CEO promises 1 million U.S. jobs
Alibaba’s CEO – Jack Ma – has remained bullish on Tmall’s prospects and the impact he believes it can make on the U.S. economy. At a meeting with President Trump in January, Ma declared that Alibaba stood ready to help create one million jobs for the U.S. economy by opening up China’s vast marketplace to American firms.
Asked during the press conference about whether any of the U.S. companies had added jobs as a result of their participation in Tmall, an Alibaba spokeswoman said that additional details will be released when the company holds its first large-scale U.S. event – Gateway ’17 – in Detroit, Michigan next month.
Alibaba has shown that they will make aggressive moves into new markets and grow their brand globally. Lately, they have taken a major interest in food. The company announced a stake in Lianhua Supermarket Holdings this week and has recently declared plans to lead a $1 billion investment in Ele.me, a Chinese food delivery startup. Now it remains to be seen if U.S. businesses will share the same appetite for the China market.
