Management / How Alibaba became the biggest online retailer in the world

How Alibaba became the biggest online retailer in the world

It began as a small online retail platform founded in the early days of the internet, but Chinese e-commerce conglomerate Alibaba has now become the world’s largest retailer.

The retailer was founded by Jack Ma, a former English teacher from Hangzhou who wanted to create a platform where companies from the East and the West could come together and trade.

Alibaba now has more than 10 million merchants operating across multiple retail technological platforms, as well as 440 million active users.

Terry Von Bibra, Alibaba’s General Manager of Europe, says the firm wants to “break down the barriers” currently hampering Western brands from trading successfully in the far east. “We want to enable businesses in the UK, from renowned brands to emerging SMEs, to have access to the Chinese market, to grow their business further.”

More than 100 British brands are trading on Tmall, Alibaba’s business-to-consumer marketplace for companies that already have a presence in China, while in excess of 30 UK brands have joined Tmall Global, a platform which allows foreign companies to sell directly online in China.

There has been an increasing trend for both UK SMEs and large established businesses to take advantage of selling into China through the Alibaba platform. “The UK has become one of the largest buyer markets in Europe for our cross-border business-to-business marketplace, with UK SMEs using the platform to source from China and around the world,” says von Bibra.

British tea brand Whittard of Chelsea, for example, started using Tmall after noticing high numbers of resellers of its tea on the platform. “The vast majority of interaction [Whittard] receives on its website now comes from China,” says von Bibra. “There is an enormous demand for such UK products in China, and Alibaba is able to play an integral role in enabling UK brands to exploit it to the full.”

The e-commerce platform has enabled companies to exploit opportunities cross border without the need to set up a big physical presence in these regions. “We are finding that increasingly, retailers are looking towards fast-growing foreign markets such as China, where it is predicted that half the country’s population will be buying foreign products online by 2020,” he says.

Retailers are also using Alibaba to merge their online channels with offline physical stores and are finding ways to use the platform to engage with customers in an immersive way.

Dyson, Topshop and Burberry all took part in last year’s Singles Day, the world’s largest online shopping event, which is otherwise known as the 11.11 Global Shopping Festival. Dyson ran a 24-hour live stream from its website, while Sainsbury produced a real-time broadcast for Alibaba’s annual 8.8 Festival and ran a Super Brands Promotion.

On the platform itself, Alibaba promoted its own game via the Mobile Taobao app for Singles Day which was played by more than 70 million people.

He says: “This game was for entertainment, but also allowed customers to unlock rewards driving pre-festival traffic to the 30,000 offline stores that participated, creating an immersive shopping experience.

“Technology is altering how consumers shop – and as such retailers will need to hasten their integration of e-commerce and bricks-and-mortar stores to retain their appeal with this demanding consumer base.”

“We want to enable businesses in the UK, from renowned brands to emerging SMEs, to have access to the Chinese market, to grow their business further.” – Terry Von Bibra, Alibaba

Von Bibra is seeing more and more companies use big data technologies as a way to better understand customers. “Big data has a crucial part to play,” he says. “Companies are already becoming better at analysing and using vast amounts of data and thus being more proficient at understanding, connecting with and serving customers.

“For Alibaba, it is extremely important that we are able to effectively use the data on our platforms to improve our services for our customers.”

Alibaba has developed its own cloud computing arm in order to manage and secure its 440 million strong customer database. “We’ve recently launched several international data centres to extend this support, including a first European data centre, based in Germany,” Von Bibra says. “The more retailers you have using a platform, the greater the incentive to have robust data managing services.”

Alibaba also uses technology to deal with online counterfeits that the e-commerce platform faces. “For example, last year our ‘Operation Cloud Sword’ programme used big data to help Chinese authorities tackle the sale of fake goods,” Von Bibra says. “Earlier this year we [also] launched our Big Data Anti-Counterfeiting Alliance with leading brands to promote industry collaboration and the use of big data and technology to prevent counterfeiting.”

According to Von Bibra being proactive and transparent in dealing with this problem is essential for retailers if they want to retain the trust of their consumers.

Retailers need to keep up with technology or be left behind, warns Von Bibra, and to do so they need to be able to identify trends as early as possible. If Alibaba’s story is anything to go by, he’s probably onto something.