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Interview with Porter Erisman: The success story of Alibaba.com04.08.2014

In the following interview Porter Erisman, former Vice-President of Alibaba.com, talks about the growth of Chinas most successul internet company Alibaba. An interview by Barbara Wiestler.

 

Erismann_Porter

What is the secret behind the success of Alibaba?

Alibaba’s secret to success was focusing on the local China customer while taking a very long term view.  During my time at Alibaba I saw a lot of Western Internet companies make the mistake of trying to apply their US or European business model to the China market.  Sometimes in China it is more important to forget everything you know about the market leaders back home and start from scratch in the China market.  The most successful companies start with the local customer and work backwards in devising their business models, rather than simply trying to adapt a Western business model to China.

 

Is Alibaba trying to enter the Western market in the near future?

Actually, Alibaba has been in the Western market since the first day it was founded, via its flagship business-to-business marketplace, Alibaba.com.  But outside of importers and exporters, very few people realize that Alibaba.com has members from every country in the world who trade on its website.

On the consumer front, Alibaba has taken its first step into the US market by funding a local US marketplace called 11Main.com.  I think they will start with baby steps to learn more about what niche they can fill in Western markets.  Companies like Amazon and eBay already have strong, mature businesses in the West, but my sense is that the SME’s using their sites are itching for more alternatives.  So I do think you will see Alibaba moving to the West, but I think they are smart enough to recognize that the China model for e-commerce can’t simply be cut and pasted to Western markets.

 

How can western brands take advantage of China’s booming e-commerce market?

With Taobao and TMall, Alibaba now operates the world’s largest shopping malls.  In fact, Alibaba’s consumer sites now handle more transactions than eBay and Amazon combined.  So the message to Western brands is: if you are not selling online in China, you are missing out on the fastest-growing market in the world.  Western brands can test the China market by opening an online store to see what products are popular with Chinese consumers.  I think that foreign brands began to wake up to China’s e-commerce potential last year when Alibaba’s Single’s Day promotion generated US$5.7 billion in sales.

 

Which E-commerce innovations from China will have a global impact?

By leapfrogging beyond the scale of western e-commerce, China has become the world’s most dynamic e-commerce market.  In the past people used to view Chinese e-commerce companies as imitators.  But now they are more likely to be perceived as innovators.  In the next few years, we are going to see more and more innovations which started in China catch on in the west.  One small example, I was recently out with a group of friends in China and saw how people now use AliPay to instantly split a bill and „Go Dutch“ on a meal.  So one of the most interesting areas to watch is mobile e-commerce and how cell phones will bridge the shopping experience from online to offline.

Ioana Sträter
Ioana Sträter
Ioana Sträter

Ioana Sträter verantwortete als ehemalige Geschäftsführerin das Kongress- und Messeprogramm von Management Forum, einem Unternehmen der Verlagsgruppe Handelsblatt. Zum Portfolio gehören neben der NEOCOM auch der Deutsche Handelskongress, der Deutsche Marketingtag, die Content World Konferenz und viele mehr.

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