Alibaba GM: Chinese consumers most well-informed and demanding globally
“The Chinese consumer in my opinion is the most well-informed, sophisticated, demanding consumer in the world,” declared Terry von Bibra, general manager for Alibaba during his keynote at Shoptalk Europe this week.
“They have a disposable income and they want to invest in quality products from around the world,” he said. “They have complete access to products, information choice and they are engaging with these products and brands in an intensive way with a common theme – they want to improve their quality of life and their family members.”
To illustrate the sheer size of China, Von Bibra pointed out there are 10 cities in the US with a population of 1 million or more. There are 18 such cities in Europe. In China, there are 102 cities today with that population and it’s forecast to grow to eventually 220 cities.
Von Bibra emphasised the need for retailers to offer seamless online and offline experiences to customers, something which Chinese shoppers now expect from retailers, especially with the country’s high penetration of smartphones and use of mobile payment system, Alipay.
According to Von Bibra, 80 per cent of the China’s e-commerce transactions take place on smartphones, 500 million of which are used via Alipay.
While Alibaba may be known as an e-commerce platform, the business has invested in several physical store initiatives over the past few years, including the acquisition of InTime Department Stores and their investment in Suning electronic stores.
In addition, Alibaba has now opened 20 Hema stores in China, a hyper local supermarket best known for its fresh seafood offering that blends on and offline services.
“People can go into Hema and say, ‘I’m going to order the stuff at home, get into the store, actually, but I want to order more stuff and actually that crab I ordered, I want to eat it in 15 minutes with my friends, so please prepare it in Szechuan-style and the rest of the stuff I bought? I’d like you to deliver it to my house’,” explained Von Bibra.
Another Alibaba initiative is known as Rural Taobao, where the business has launched Alibaba stores in the centre of 16,000 villages in China. After all, while there are 731 million Chinese online, there are 600 million who don’t have access to the internet, Von libra pointed out. The plan is to eventually reach 100,000 villages.
“Customers can go into a shop, order something online, get it delivered in a few days, or you can take the products you produce in your village and sell them online. It’s a long-term idea about how we can help the Chinese consumer in the rural world,” he explained.
Despite the fact that many believed that commerce would kill the local mum-and-dad corner store, six million of these stores currently exist in China, said Von Bibra.
“This is how [people] want to engage, this is how people want to buy. So we provide an app where people can run their shops, order their products wholesale, sell them retail in their stores and we give them access to data and access to logistical solutions so they can offer products like food, which many of them could not because of the logistical challenge,” he explained.
“We try to make it easy for corner shops to enter the world of new retail and how we’ll experience it in the future.”
“The transformation in China of the retail experience has been driven to a great degree by e-commerce in the past few years. In the future, it will be driven by how people are able to build a seamless retail experience that combines offline in a way that is best for that particular consumer for that particular brand experience.”
Keep an eye out for Inside Retail’s coverage of Shoptalk Europe, which brings together over 2,000 individuals, including 225+ speakers, from across Europe and the world.