“Find it. Make it. Sell it.” This simple slogan is appearing on television, in magazines and on websites across the US as part of Alibaba Group’s bid to translate domestic strength into global preeminence. The company’s US$30 million ad campaign is underpinned by success stories – satisfied customers who used the Alibaba business-to-business (B2B) internet platform to identify suppliers and sell goods.
It remains to be seen whether the ads will significantly boost Alibaba’s international user base. A number of economic and cultural barriers might suggest not.
First among these is the current economic climate. Demand for consumer goods in the US has dropped and this has inevitably taken its toll on Chinese exports. Shipments were down 23% year-on-year in July, the ninth consecutive monthly contraction. Persuading small businesses to source products or materials from China when they have no buyers for the finished goods is a tough sell.
At the same time, as with many Chinese companies heading overseas, Alibaba is competing against established players in a market it may not fully understand.
The company is experienced meeting the needs of Chinese volume buyers. Its Chinese site has 32 million users, compared to just 8.6 million for its international site – 1.3 million of them American. Outside China, though, it’s going up against B2B marketplace firms with more experience catering to a Western audience. These players already run proper English-language websites and offer supplier verification by major certification firms such as Bureau Veritas.
Some of these challenges could be overcome through smart marketing and the recruitment of staff experienced at dealing with foreign buyers. But it appears Alibaba has misfired in its ad campaign. Fluffy testimonials from fictional entrepreneurs who found suppliers through the company’s B2B platform will only get you so far; US firms want to hear real stories from real business people. In cost-conscious times, they are less willing to gamble on an unknown.
A key element missing from the ads is that Alibaba is just the initial meeting point for buyers and suppliers. Buyers still need to do all the factory visits and quality control that comes with importing products and materials from China. Relationships must be worked on and success doesn’t come immediately.
Alibaba is a first step – not a complete solution – to sourcing, and the marketing should convey this. It’s not glamorous and flashy but it gives US buyers a clear indication of how the company can contribute to their business at a difficult time.