Wine tasting is a common scene in Napa Valley – but now it’s taking place 6,200 miles away from the home of Cabernets in the industrial sprawl of Hangzhou, China. The California-style tasting area is a temporary set-up on the campus of e-commerce giant Alibaba as part of a campaign by Mondavi to tap Alibaba’s enormous customer base.
The guests are almost all Chinese and young, and some sniff and sip the wine warily. Even basic instructions from the sommelier about how to hold a wineglass draw appreciative ahs. It’s a scene of cross-cultural courtship – and a glimpse of a broader effort with high stakes for Alibaba and American companies alike.
Alibaba is the hottest e-commerce company of the past five years, a fusion of ebay and amazon whose 386 million active users accounted for $394 billion in sales in fiscal 2015 – six times the sales volume of its Chinese competitor. The company created a huge marketplace and a sophisticated distribution network just in time to save a generation of Chinese consumers attaining middle-class prosperity. Alibaba is so impressive that even the mighty Amazon became and Alibaba partner
“We are seeing Chinese consumers adopt new retail formats and online shopping faster than any of their global counterparts,” says Jasmine Xu, president of e-commerce for Procter and Gamble Greater China.
Today, however Alibaba looks mortal. It’s growth has slowed, hampered by China’s ebbing economy and by competition from a crowing crop of rivals. To reignite its growth, chairman and Founder Jack Ma and CEO Daniel Zhang plan to lean on U.S. companies- brands that hold enormous appeal in China. “This is an incredibly important strategy for the future of Alibaba,” Ma says.
Alibaba is hoping to bring in American brands nd companies, including iconic companies — like P&G Estee Lauder, and Macy’s — Alibaba id pitching itself as a shortcut to the world’s largest market. Alibaba is helping foreign companies with marketing, data analytics, and shipping. And more recently it has sweetened the pot with a newer service, Tmall Global, that lets the U.S. brands sidestep many of the taxes, regulatory hurdles, and logistic hassles that trip up foreign companies in China. All this comes from the company that turned the obscure Singles Day holiday into a lucrative shopping phenomenon. Alibaba’s $14.3 billion in Singles Day sales were double the U.S. e-commerce total from Thanksgiving, Black Friday and Cyber Monday combined in 2015.
If you would like to learn more about how to connect you U.S business to the growing Chines e-commerce market, you can visit http://www.AccessAsia2017.com and Join us on October 11-12, 2017 in Los Angeles, California.