China holds massive opportunity for U.S. sellers, Alibaba executives told 3,000 small-business players from 48 states at a conference it hosted in Detroit this week, The Street reports, and its target consumer groups include the three main sectors of small businesses, entrepreneurs and farmers.
Despite widespread reports of China’s economy cooling, the country continues to enjoy growth in both income and population, and its economy is poised to see growth of 5.5% and 6.5% for the next 10 to 15 years (torrid compared to more mature markets in Europe and the U.S.), Alibaba President Michael Evans told The Street, according to another report.
But don’t make the mistake of equating Alibaba with Amazon, Evans told The Street, saying Alibaba’s new customers are more likely to hail from Asia and emerging markets rather than from the U.S. or Europe, according to a third report.
Earlier this month, Alibaba executives told investors that it’s targeting revenue growth between 45% and 49% for the current fiscal year. In the last fiscal year, Alibaba generated free-cash flow of $10 billion, which Alibaba Group CFO Maggie Wu said would be plowed back into the company to gain B2C market share. “This is a company that always invests for the longer term, for the future,” she said, according to an account of the meeting detailed on the company’s blog.
In Detroit, the Chinese e-commerce giant took that message to the smaller businesses that it sees as having potential for growth, even in the relatively small terrain of the U.S. Also in Detroit, Alibaba executives sought to distance the conglomerate from Amazon, as they did in Hangzhou, China, earlier this month. The differences don't end with where the companies are seeking new customers.
While much of Alibaba’s approach — including its focus on developing a consumer-focused ecosystem that includes entertainment and a cloud services unit that provides revenue and a resource for its sellers — sounds a lot like Amazon, the Chinese company seems also to be creating an e-commerce infrastructure that is more social and interactive beyond search. Zhang told investors the company has essentially grown into an economy unto itself, fueled by Chinese consumers’ comfort with interacting with retailers on mobile. Alibaba’s Taobao marketplace has “already accomplished a successful mobile transition,” with 85% transactions from mobile, according to a webcast of the presentation viewed by Retail Dive.
“Taobao… has transformed from a marketplace to a social commerce platform,” Zhang said. “Because of the social, because of the fun of discovery, because of the experience exploration… people want to come back again and again and spend so much time with us on our leading Taobao mobile app.”
That level of exploration and the return visits it engenders is possible on mobile in a way that was never true when e-commerce was based more squarely on desktop computers, a process aided by the collection and smart application of data, according to Zhang. “The heart of Taobao today is intelligence,” he said via the webcast. “When we talk about big data and the value of cloud computing — all of our products and our applications are data driven … We can give the right person the right product in the right context.”