China's 300-million strong middle class to drive online shopping
Chinese e-commerce giant Alibaba Group Holding has stepped up efforts to promote cross-border trade, trying to attract more foreign products from the U.S. and other countries to its online platforms to meet the demand of a rapidly growing middle class in China.
The first batch of U.S. beef will enter China via Alibaba's global site Tmall by the end of June, the company announced Wednesday. China and the U.S. recently signed a deal for U.S. beef to enter the Chinese market again.
In addition to beef imports, the group announced two new partners - Driscoll's and Chicken of the Sea - for its Tmall platform at a U.S.-China Small Business Conference, also named Gateway '17, held in Detroit, Michigan, on Tuesday and Wednesday. These companies will bring fresh strawberries as well as high quality seafood from the U.S. to China.
At the conference, Lieutenant Governor of Michigan Brian Calley declared that the state of Michigan will collaborate with Alibaba, and Tmall International, the online shopping mall under Alibaba, will establish an overseas branch that is designated by the local administration.
"[The state government] trained us to use the Chinese e-commerce platform. So four months later, my sweets can be seen on Tmall!" Cathy Schulte, the owner of sweets shop Holy Cannoli's in Detroit, told the Global Times.
Generally, foreign small businesses that want to enter the Chinese market encounter many challenges and difficulties in logistics, payment method, language and data technology, said Liu Dingding, a Beijing-based industry expert.
But Alibaba's logistics platform can provide an integrated services package for U.S. small businesses and merchants interested in entering China's huge consumption market, he told the Global Times on Thursday.
Thanks to frequent acquisitions and cooperation with overseas logistics companies in recent years, "Alibaba has established an advantageous global network - Cainiao, which can avoid headaches for foreign retailers in terms of costs, efficiency and tariffs, among other issues," Liu said, noting it owns state-of-the-art payment technology Alipay.
As a bridge connecting foreign commodities with Chinese consumers, Alibaba has introduced 14,500 foreign brands from 63 countries covering 3,700 categories of commodities to the Chinese market, 80 percent of which first entered China through Tmall International.
On the so-called "618" shopping spree this year, which falls on June 18, sales volume on Tmall International skyrocketed 500 percent compared with the same day in the previous year, according to a document seen by the Global Times on Thursday.
A total of 2,000 bags of U.S. Natural Balance pet foods were sold out within 5 minutes, Skincare product Ampoules sold 500,000 pieces within 30 minutes and other products including Panasonic hair driers, Omega watches and Australian oatmeal were quickly sold out, according to the document.
"China now has 300 million middle-class consumers, so we have demand for high-quality goods from overseas," said Jack Ma Yun, the founder and executive chairman of Alibaba.
The size of the middle class is growing, and over the next 15 years, that population is expected to increase to 600 million. The demand for high-quality goods and services will increase to match.
With the ease of online payments in China, online shopping has become the middle class's main way of spending. There is a total of $550 billion worth of deals per year reached on online shopping platforms under Alibaba Group.
Since fresh food imports demand higher standards in delivery efficiency and packaging, Alibaba is likely to consider this capacity a breakthrough in leveraging enormous domestic demand in the future, according to Liu.
The goal of Alibaba is to forge a platform for small businesses, helping them find consumers and business partners, and solve problems such as payment and logistics, using cloud computing, Jack Ma said. But that doesn't mean businesses have to rely on Alibaba; instead they can refer to many e-commerce or Internet companies to do business in China, he added.
