Today, China; tomorrow, the world
Updated: 2015-11-13 08:11
By Li Jing and Chen Yingqun(China Daily Europe)
Overseas companies look for a piece of the action on a day everyone in China is talking about
Alibaba sought to transform its Nov 11 shopping extravaganza into a global event this year, featuring many overseas brands and promoting products to more than 200 countries.
A frenzied 24 hours of shopping on its Tmall platform featured 5,000 brands from Europe, the United States, Japan, South Korea and elsewhere.
Educational toys being sorted at a plant in Zhejiang province. Su Qiaojiang / For China Daily
Macy's of the US, the Metro Group of Germany, and Sainsbury's, the third-largest chain of supermarkets in Britain, launched official stores on the e-commerce giant before Nov 11.
The number and value of cross-border transactions within the first two minutes this year surpassed those of the whole of Nov 11 last year. Imports from the US, Japan and South Korea were the most prevalent on offer.
Alibaba also promoted Chinese products to buyers in 64 countries and regions and worked with offline retailers including Intime Department Stores and Suning Appliance. The US and Australia rank among the top five in exports and imports on the site.
In an article for sina.com on Nov 10, Wang Yulei, chief executive of Tmall, said: "This year for (Nov 11) our keyword is globalization. Starting from this year, Nov 11 will definitely not just be for consumers in a particular region but for the whole world."
In an effort to make the Nov 11 shopping event an international phenomenon, Alibaba dubbed Nov 11 Global Shopping Festival and invited ambassadors and consuls from 39 countries in China for promotions at a festival launch event at Alibaba's headquarters in Hangzhou, Zhejiang province, on Oct 13.
More than 5,000 overseas brands from 25 countries and regions took part in the Global Shopping Festival, the company said. It handled a total of 30,000 brands this year compared with just 27 in the first Nov 11 shopping event in 2009.
Wang Xiaoxing, an analyst with the IT consultancy Analysys International, says: "Since last year, Alibaba group has tried to attract foreign companies to transform the day from an exclusively Chinese phenomenon into a true global shopping event."
Last year Alibaba entered into agreements on e-commerce with several countries, including Britain, France and South Korea, and brands from these countries, such as Costco Wholesale, Origins Natural Resources and American Eagle Outfitters took part in the Nov 11 event for the first time.
The market intelligence firm Euromonitor, based in London, says the goods whose sales grew most online last year were apparel and footwear, and many multinational apparel and footwear brands set up flagship online stores in China, such as Zara and Burberry on Tmall.com and Nine West and Ugg on JD.com.
Before Nov 11, Jack Ma, the executive chairman of Alibaba, was quoted as saying he was certain shoppers worldwide would take part in the Nov 11 event within the next five years.
"I hope it will be a global shopping day for the United States, Europe, anywhere in the world."
Wang Xiaoxing says: "Alibaba and its rivals jumped on board globalization almost simultaneously. It is too early to say which e-commerce company stands out. But one thing you can be sure of is that the market is big and extremely lucrative.
"Channels for imported products to China are still not smooth, and the future of e-commerce companies lies in globalization."
Those born since the 1990s are online shopping's biggest spenders, he says, and are more familiar with foreign brands than are older people, and are more willing to buy them.
Accenture-AliResearch says China will be the world's largest e-commerce market for imported products in the next five years. In 2020, it says, more than 200 million Chinese are expected to buy imported goods online worth $246 billion (229 billion euros), a 12-fold increase on last year and a huge increase on the $1.9 billion spent just five years ago.
Even as international retailers cash in on the demand in China for high-quality and niche foreign products, they can also lower their entry costs into the market through online shops.
Jan Hebnar, a managing partner of CEE Investment and Trade, a company that represents Central European food products in China, says his company started to sell online in China two years ago on a wide range of Chinese e-commerce platforms, including taobao.com, yhd.com and benlai.com.
His company also has offline channels such as selling in big supermarkets, but these channels are too expensive for imported food brands, he says.
"Big stores such as Walmart have limited space for imported food, and the outlay required to market things this way combined with the scale of sales you need to realize is such that you can never recover your costs. By contrast, selling online is good because it greatly reduces costs and makes it much easier for imported small brands to get to Chinese customers."
Almost all online platforms and companies that CEE Investment and Trade works with have Nov 11 promotions, Hebnar says, adding that that day the company's sales were 10 times what they are on a normal day.
With the rise of discerning middle-income consumers in China, many foreign products can be found online, ranging from food and drink to personal care products, apparel and accessories, health products, consumer electronics and household goods.
"Food, apparel and stuff for children are the most popular foreign products in China," Wang Xiaoxing says.
Alibaba says that on Nov 11, products for children and mothers were the top sellers until the end of the day, when skincare and health care products rose to the top of sales lists.
Overseas e-commerce sites have made it clear they want to take advantage of Nov 11.
Dealmoon.com, the largest Chinese-American shopping advisory website in the US, held Nov 11 shopping promotions to generate sales.
However, to make the Chinese online shopping festival a truly global buying experience will require more recognition of Chinese e-commerce companies by foreign shoppers.
Alexander Goransson, an analyst with Euromonitor, says: "(The) festival has not been able to become part of the consumer culture (yet) in Europe."
Burghardt Groeber, an e-commerce expert and vice-president of Greater China for the enterprise software provider Hybris AG, says Chinese e-commerce companies may be well-known by overseas Chinese, but Western buyers are only slowly building their trust in Chinese platforms.
Competition from global e-commerce giants such as Amazon in the US and Rakuten in Japan mean it will take some time for Chinese e-commerce companies to open up to overseas markets, Wang Xiaoxing says.
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