What’s Next for Alibaba: My 10 Questions (Pt 1 of 2)


I’ve been thinking a lot about Alibaba since Singles’ Day. Which was awesome by the way. My take-aways from that are here and here.

I have a list of questions about Alibaba. I think they’re important but I don’t really have good answers for them (yet). So I thought I would throw them out to the wisdom of the crowd. All thoughts and comments you might have would be appreciated.

Question 1: How do you measure the success of a brand or merchant on Singles’ Day?

If you view Singles’ Day as just a sales opportunity, it is not terribly interesting. So company XYZ sold $XYZ in one day. Ok, but no big deal. Shopping festivals and discounts are common in China.

But if you view Singles’ Day as a brand-building day, then it is much more interesting. Can you reach an entire country in one day with your brand? With your new product? Can you significantly elevate your brand in one day? Can you expand awareness dramatically? That is really interesting. And I think that is a big part of what companies are doing with the festival.

But how do you measure the success of a company on a brand building day? It’s definitely not just GMV. By overall awareness? New customers identified? New conversions? New products launched? Data gathered?

I think that is pretty interesting. And I would love to know which companies really succeeded in this way and how on Singles’ Day. Alibaba is a data technology company so I’m sure they know.

Question 2: How much brand value is going to be created (and lost) in ecosystems?

This follows from Question 1. If Singles’ Day is about brand building, that means brands could rise and fall relative to competitors. So are brands and merchants competing for sales in the Alibaba ecosystem – or are they competing for the values of their brands?

How much of brand value is going to be created and lost in large e-commerce ecosystems? And keep in mind, a lot big companies (ketchup, detergent, etc.) are mostly just portfolios of brands. The actual products themselves are pretty basic. And the companies are often little more than holding companies.

In the past, big brands used to win by beating their smaller competitors with marketing spend (billboards, print ads, television spots) and power in distribution. But Alibaba is doing what it has always said it was going to do – create digital tools that empower SMEs and level the playing field. This is, of course, great for consumers and SMEs. But it does raise the big question of how do you create brand value in the age of ecosystems? Is brand value going to be more and more about a company’s ability to compete in a dominant ecosystems (like Alibaba, JD, Amazon)?

Question 3: How much product R&D is going to shift to data-rich services, like the TMall Innovation Center?

One of the more fascinating aspects of Singles’ Day 2018 was the products developed with the TMall Innovation Center (TMIC). Mars launched Spicy Snickers (pretty good). Listerine launched Rosemary Blossom mouthwash (not bad). And Oreo launched wasabi and other flavored cookies. To be honest, I couldn’t finish the Oreos.

I went to a presentation by TMIC and some of these brands during Singles’ Day. And the presentation that really got my attention was by a cheese company. It was Milkana, the largest seller of processed cheese in Germany. They were talking about their launch of a children’s cheese lollipop (see below).

Basically, it’s soft cheese on a stick (it’s pretty good). But why did they do this on Singles’ Day? And why with TMIC?

Because they have what in the past would be a very big problem. The problem is that Chinese consumers don’t really eat cheese. It’s just not that popular. And overcoming that through traditional marketing and retail would have taken a long time and a lot of money. This is not unlike trying to get Chinese to drink coffee (which Starbucks has been working on since 1999).

But Milkana worked with TMIC, which has tons of data on everything Chinese consumers buy. And the result of the work was a soft cheese lollipop for kids. The strategy was a product that Chinese moms would perceive as healthy (very important) and that would start getting people eating cheese when they are young, so it becomes more normal. Then they launched (or just promoted) it big on Singles Day.

It’s an interesting case study. How else could you try to get an entire country to start eating something new? How would you even attempt that without something like TMIC and Singles’ Day? And succeed or fail, Milkana probably got a fantastic amount of data and saved themselves years of effort.

The evolving relationship between Alibaba and merchants / brands is fascinating. It started with creating connections and enabling transactions in a marketplace. It evolved to include logistics and delivery (thereby improving service, speed and capabilities). Payment also mattered. And there have just been lots of initiatives for increased efficiencies and improvement inventory management.

Now the increasing integration of operations between merchants and Alibaba (and other platforms) is extending into research and development. And that is fascinating. I’m curious how far this will go. It’s ultimately all about data and making better decisions.

Question 4: Is TMIC a competitive barrier in e-commerce?

There are lots of e-commerce companies in China. New players emerge all the time with clever strategies and niche approaches. For example, cross-border e-commerce, content-driven e-commerce, social commerce, group buying and flash sales.

But how could a niche e-commerce company compete with TMIC? Even if  you had the capability, could you match the data? Probably not.

If you’re Pinduoduo or Xiaohongshu, how do you compete with that? Do you have to?


Those are my first 4 questions. Any comments you might have would be greatly appreciated.

Questions 5-10 are in Part 2. Thanks for reading. -jeff


I write and speak about digital China.

Photo courtesy of Alibaba Media Resources.


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