Aalibaba Does the Heavy Lifting For U.S Companies Trying to Sell Into Asia

Los Angeles-  Alibaba puts plenty of promotional muscle behind its U.S partners. For example, it started singles day, aimed to romantically unattached Chinese college students, they turned it into a behemoth e-shopping event. This led to more than $1 billion dollar in sales for American Companies.

Any day of the week, Alibaba can tap its huge purchasing database to help American companies and target their marketing., reasoning that someone who buys, say, Alaskan black cod is more likely to splurge on other American products from any manufacturer, Tmall will pith the person offers for P&G diapers, wipes, and other baby products.

At every turn, the American origin of these brands is emphasized because that’s what the Chinese consumers want. Tmall web pages for their products often feature the phrase “Made in the USA” in a massive font, in red type. LAst spring Washington Apple Commission help a promotion on Tmall Global. It Generated only about $100,000 in sales, but Rebecca Lyons, a marketing manager for the association, was impressed by its reach: 18.4 million Chinese consumers clicked on the promotion, and the apples’ American cachet was a big draw. Thanks to that publicity, Washington apples have now penetrated Sam’s Club and other retailers in Chin. Those sold on Tmall have an additional benefit: a QR code that lets purchasers use their smartphones to verify the fruit’s origin.

china sams club

While U.S brands are generally upbeat about the exposure they’re getting from Alibaba, almost everyone involved is mum about how much they’re actually selling. Alibaba declines to disclose total sales for international products, and Zhang acknowledges that goods from the U.S still represent a small percentages of sales volume. Of the 10 American companies Fortune spoke with, all declined to reveal their sales totals from Tmall and Tmall Global. “It’s still the early days for our business in China,” is a typical response. P&G, which sells everything from Pampers to Gillette razors through Tmall was mor openly bullish but not much more specific. It says its China e-commerce business, which includes but is not limited to Tmall,is now the company’s largest online retail operation, surpassing those in the U.S and Europe. P$&G declined to reveal e-commerce’s share of its $7 billion n annual China revenue but said its value had grown 100-fold during the past four years.

Heavily publicized promotions generate a lot of the buzz an ddollars for feoreign brands on Alibaba. During one six-day Tmall promotion in September, Estee Lauder registered $1.3 million in sales; during a two0day sale in April it old $600.000 worth of La Mer face cream. Retail experts note that items often sell at steep discounts during such promotions. But it all might be worth it if it helps brands get  foothold on Singles Day.

“You better believe U.S retailers will jump on any event that drives this level of commerce,” says Gil Luria, retail analyst and managing director at Wedbush Securities. New sellers at the 2015 blowout included Apple, Estee Lauder, Robert Mondavi, and Macy’s. To accommodate n anticipated surge in American sales, Cainiao chartered 200 transport planes- traditional commercial plane “belly cargo” wasn’t going to be enough to ship everything, Wan Lin explains.

singles day shipping

In the first eight minutes of the big day, Nov. 11 Alibaba sold $1 billion; by day’s end the total was $14.3 billion. How did international brands do? On that topic, Alibaba is boosterish but fuzzy. Alibaba would not break out dollar values but says that 33% of its Singles Day shoppers, 30 million in all, made at least one purchace from international brands or merchants. Costco was the top international seller, Alibaba said. The bulk retailer enticed Chinese consumers to buy underwear , kitchen supplies, and a host of food items — including 245 tons of mixed nuts, about $4.1 million worth of nuts.

singles day 8 minutes

Evidence of success? It’s far to early to tell. Still, Bob Peck, the SunTrust analyst, thinks Singles Day 2015 delivered on its international promise. Based on Alibaba’s 30-million-customer count and his analysis of Tmall  spending patterns, Peck estimates that international brand sold $2 billion worth of goods on Singles Day, with about half of that going to American brands. That would mean international sales accounted for 14% of revenue that day – in line wih the share Peck thinks they’ll eventually post year-round. P&G says that it saw record sales on Single’s Day 2015 surpassing 2014’s total in a matter of three hours. And even the soft-spoken Zhang is willing to take a cautious verbal victory lap: “This day demonstrates the power of domestic China consumption!”

That’s why small and medium sized American companies are excited about getting on board. There is a trade summit being held by Alibaba and its U.S partners Exhivisit and RepDM in Los Angeles California this coming October. In an effort to improve U.S  Trade Deficit, Alibaba is planning the Access Asia 2017 Trade Summit to help teach U.S business how to sell online to the company’s 500 million customers in China. If you would like to learn more about this event you can visit http://www.AccessAsia2017.com

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