Building a platform that crosses borders
Editor's note: An increasing number of Chinese companies are emerging on the world stage as they strive to establish their brands outside the country. China Daily reporters asked the heads of some of the best-known firms how they present themselves overseas, how they compete against their global counterparts and how they might use lessons learned from their multinational rivals. This report, the third in our series, is by Meng Jing.
Most device makers in the world would want to debut their new gadgets at prestigious events, big-ticket ones that gain immediate global traction.
The annual CeBIT show in Hanover, Germany, the world's largest expo for state-of-the-art computer technology, used to be the event of choice for Chinese headset makers to make a big splash. But that seems to be no longer the case with a growing number of companies making a beeline for AliExpress, an online marketplace of Alibaba Group Holding Ltd that specializes in the sale of Chinese-made goods directly to consumers all over the world.
Just a month prior to the 2015 CeBit show, which kicked off in mid-March, ZTE Corp, a Chinese telecommunications hardware manufacturer, debuted its signature Blade S6 phone on AliExpress.
ZTE is only one of the growing number of Chinese smartphone makers that are going global through AliEpress, as the platform, which serves 2 billion people worldwide, can help reach new customers more efficiently with much lower cost.
Compared with the traditional business-to-business trade, Leo Shen, general manager of AliExpress, said the golden era for cross-border business-to-customer e-commerce is yet to come.
According to Shen, his platform will not only serve as an important part of Alibaba's globalization strategy but also be an engine that globalizes the business of more made-in-China products.
"The volume of online cross-border trade is still relatively small compared with traditional trading, but it is growing quickly. This is particularly true in emerging economies," he said.
Founded about five years ago, AliExpress is now the No 1 online shopping website in terms of traffic in Russia and Israel, and it is No 2 in Brazil and Spain, according to Web analytics firm SimilarWeb.
Despite the sluggish exports from China, Shen said he believes the advantages of made-in-China products still lie in a good price-quality relationship.
"We just need to make sure consumers in other countries have the ability to bypass the conventional middlemen - the distributors, the brick-and-mortar merchants, all of whom take a cut from every sale - and buy efficiently and often at lower cost directly from the source. In other words, we want to make sure companies get what they want with just a few clicks," he said.
AliExpress will focus on further expanding its presence in Russian-speaking countries, southern Europe, Latin America and the Association of Southeast Asian Nations, this year, Shen said.
Statistics from AliExpress showed that the overall value of the world's cross-border e-commerce market is estimated to triple from the levels seen in 2013 to about $300 billion in 2018.
As China's e-commerce market becomes more mature, online platforms cannot rely on Chinese consumers spending more and more each year on the same products. They also need to expand their customer base and engaging in cross-border e-commerce is one of the solutions, said Neil Flynn, a Shanghai-based portfolio manager at Alcuin Asset Management.
But he said cross-border e-commerce still faces significant challenges in the areas of international payments, logistics and customs clearance.
Cristina Guardia, a Spanish architect based in Barcelona, said she frequently buys clothes, shoes, cosmetics and jewelry from AliExpress because of its good quality-price relationship.
"The quality of the products tends to be quite decent. But usually it takes a long time, around 45 days, for most of the orders to arrive," she said.
Contact the writer at mengjing@chinadaily.com.cn
Emma Gonzalez Miguel contributed to this story.
