China: Successful e-commerce with Alibaba

During an interview with S-GE, Terry von Bibra, General Manager Europe of the Alibaba Group, explained how Swiss SMEs can successfully make use of the world’s largest online trading platform. E-commerce in China is a promising sales channel for those who face up to the complexity, remain flexible and adjust their positioning.
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E-commerce in China is very popular.

Alibaba is the world’s largest online trading platform. More than 10 million sellers offer their products each year, which are ordered and purchased by around 434 million buyers from more than 200 countries. And most of these buyers are located in China. Alibaba is a lot more than just a trading platform though – a well-established trading company with an extensive offer of platforms and services for a wide variety of target groups: B-to-B-, B-to-C- and C-to-C platforms as well as cloud and financial services. By 2020, China will be the world’s largest market for imported e-commerce goods – and this even though only around one half of the Chinese population has Internet access at the moment. For Swiss SMEs, e-commerce in China represents a very promising sales channel. “However, the complexity should not be underestimated,” according to Terry von Bibra, Alibaba Group General Manager, Europe.

Terry von Bibra, where should Swiss SMEs get started with regard to e-commerce?

When getting started with e-commerce you first of all need to obtain information. The Chinese market is complicated. If you accept this, face up to the complexity and invest enough time and patience, then the first step has been taken. What’s more, the willingness to try things out, be flexible and adjust one’s plans is also important. And the right choice of partners is a key aspect. In China you need multiple partners – you can’t go it alone.

When is it worthwhile to establish a presence on a global online platform?

In addition to an e-commerce strategy, the right skills and a financial investment, SMEs need resources within the company. And that is when partners are really needed. An SME can pool together with other companies in order to offer products on, for example, a Swiss platform. This can be the more worthwhile solution up to a certain size, instead of trying out a global platform right away.

How can Swiss SMEs make better use of the attribute “Swissness”?

This can be done in a playful manner. Social media is perfect for this, also at a global level. In China, social media plays a much more important role than in Europe, when it comes to buying decisions. An SME can think about how it can make the Swissness of its products more noticeable via social media, and thus find a niche for the brand. The Chinese appreciate Swiss products and their quality, and they are prepared to pay a certain premium price for this. As a Swiss SME, I can make this quality visible and also think about which role quality plays when presenting the brand. This applies to foodstuffs as well as all products that require complex processing.

What are the risks associated with trading on large online platforms?

You need to invest time, money and acumen – without even knowing whether you will be successful. Another risk relates to incorrectly positioning one’s own products in the Chinese market. Many companies try to achieve uniform positioning worldwide. However, for the Chinese market it is often necessary to position products specifically for this market. Addressing these issues carefully and with enough patience is worthwhile, as China is a huge market, with an enormous amount of potential for high quality Swiss products.

According to a recently published study of NetComm Suisse and S-GE, SMEs are not yet fully exploiting the enormous sales potential of online trade. How many Swiss companies are making use of Alibaba as a platform?

We are already working together successfully with large Swiss companies like Nestlé, but we don’t yet have enough Swiss SMEs. And it is important to us to provide them with support when it comes to trading with China. Our task is to simplify global trade worldwide.

Video interview with Alibaba founder, Jack Ma at the World Economic Forum 2016

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