How Alibaba Makes It Easier For Global Startups To Enter China

I’d long heard of global startups first entering China via Alibaba’s Tmall before selling at physical retail, but didn’t fully understand why or how.  Entering any new market as an outsider can be daunting when you don’t fully understand the language, culture, distribution channels, logistics, payment methods, government regulations, and popularity of marketing platforms.  I also wondered why Alibaba was so interested in bringing global companies into China and helping them grow, since they compete with Chinese firms.  Here are some answers.

E-commerce in China is Massive and Still Growing Rapidly

E-commerce is more developed in China than almost any other country in the world and it has continued to accelerate due to:

·       The Covid lockdown and buying more from home, online 

·       Popular new formats like livestream e-commerce

  •  A culture of deep data analysis to optimize online selling

·       A practice of offering online customers a very wide selection of global goods

·       Players like Alibaba making it easy for global vendors to sell on their platforms and adapt products for better market acceptance

eMarketer forecasts retail e-commerce in China will grow 21.0% in 2021, versus 4.0% in total retail sales (physical and online combined).  E-commerce is forecast to jump more than 7 percentage points vs. 2020, to 52.1%. On 11.11, 2020, Singles Day, China’s biggest shopping holiday of the year, over 800 million consumers bought $74.1 billion in goods: up 26% vs. 2019. Demand for imported goods in China hasn’t slowed; it shifted even more to online.

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