Recognizing Consumer Needs In Advance – Zhiyu Chen [CorD Magazine, June 2017]

This interview with Zhiyu Chen, Chief Commercial And Product Officer At Ali Express (Alibaba Group) was originally published in June 2017 issue of CorD Magazine.

Foto: Zoran Petrović / CorD Magazine

Having started out with a staff of 18 in 1999, Alibaba Group (of which AliExpress represents one marketplace) has grown to become a giant in the internet retailing business, with the largest ever global IPO in 2014. And it seems that this group is just getting started, as Alibaba’s founder, Jack Ma, noted in a 2016 interview: “Alibaba is a big company compared to 15 years ago, but we are still a small company compared to where we will be 15 years from now”

To put things in perspective, about 42 million packages are delivered daily through Alibaba’s Cainiao Network. Last year saw Alibaba hit a record breaking 17.8 billion dollars’ worth of gross merchandise volume (GMV) sold by retailers on its platforms during 24 hours on a Single Day; with 175,000 incoming orders each second. Alibaba has over 40,000 employees and several subsidiary companies and affiliated entities like Taobao, China’s largest C2C online shopping platform, Alipay, the world’s largest mobile and online payments platform since 2014, Alibaba Cloud (Aliyun), a cloud computing service platform that acquired HiChina, the largest domain registration and web hosting service company in China in 2009; as well as AliExpress, one of the leading online retail services, with a network of independent traders and major successes in many different markets, for instance Russia, where it is the most visited e-commerce website, or Serbia, where their mobile app is one of the top apps in its category.

Zhiyu Chen, Chief Commercial and Product Officer at AliExpress (Alibaba Group), visited Serbia to speak at the xCEEd 2017 Conference on customer satisfaction and experience, along with other leading minds from the e-commerce, FinTech, RegTech and banking industries. He is accountable for global commercial performance and P&L success for AliExpress.com and is also responsible for sales, business development, country strategy, mobile marketing, product management and the CRM, services and logistics departments.

Doing business worldwide, it is a challenge to ensure customer satisfaction in the many different countries and markets where you operate. How do you do it with both a global and a local perspective?

We address many markets and therefore it is very challenging to address our customers’ every need, so we do that step by step. And so we are clear about who our customers are, what their most important needs are and which are our key markets. In the markets where we operate we try to bring an enjoyable life experience to the customers we serve, by providing them with access to variety of products at an affordable price.

As AliExpress’s business is growing globally, it is also facing strong competition from other big players, such as Amazon. What are your main differences and competitive advantages?

I think we tailor our service in our operating model to specific customer segments, and this could be very different from our competitors. We serve customers who want to enjoy their life to the fullest, so we are not just a shopping site; we provide a lifestyle experience and aim to create a community with our customers. This means that we take a very different approach and focus on a variety of initiatives, such as bloggers competitions, SNS networks and community etc.

I think we tailor our service in our operating model to specific customer segments, and this could be very different from our competitors. We serve customers who want to enjoy their life to the fullest, so we are not just a shopping site; we provide a lifestyle experience and aim to create a community with our customers

AliExpress harnesses technology to empower small businesses to sell their goods and grow. Could we say that this is a vision or a direction in which AliExpress is heading, and could you elaborate a bit more on this idea of the empowerment of small businesses?

If you look at international trade to date, when it comes to the clothes and shoes you buy, or the computer you buy, they are not directly from source, but rather you buy from a distributor in your country, and that distributor could even have an upstream distributor, and they also have importers. They ultimately decide what you can and can’t buy. And if you look from the supplier’s perspective, the importer has a great say in what can be sold on all of these markets, not the final consumer. We want to bridge that gap and create a better life for the consumer by handing that choice back to them.

You certainly have an international background, having studied at both Oxford and Zhejiang universities, and having worked at Barclays Bank and Alibaba Group. And AliExpress also has a global nature. What are some of the main differences and similarities between East and West when it comes to business culture?

I don’t think it’s about the differences between East and West in terms of business culture, but rather it’s more about working in an innovative, entrepreneurial start-up environment, compared to a somewhat more rigid approach in other industries. I think, generally speaking, that we tend to hire people who are smart, who adapt to change and who have an open mind. And that connects all the borders.

What are the most important lessons that e-commerce businesses from Central and Eastern Europe can learn from AliExpress’s global success?

From the perspective of the e-commerce business, I think the manufacturer and exporter need to be closer to the customer, and to understand what is trendy and what their customers really want. In the past they got this information from importers, and if you work in international trade, importers sometimes place their order half a year or even a year in advance. So information gets lost in this process, and it also gets delayed. And I don’t think that is the future. The future is to understand what the consumer wants before the consumer.

I don’t think it’s about the differences between East and West in terms of business culture, but rather it’s more about working in an innovative, entrepreneurial start-up environment, compared to a somewhat more rigid approach in other industries

Could you point out some of the most important trends in the e-commerce and export business that we should look out for in the future?

I think the trend is that coverage of e-commerce is becoming broader. In the past it was only for young people or those shopping for things they couldn’t find locally. And what we have seen in China is that older generations started to adapt to e-commerce very fast, most of them learning from their children. And also the infrastructure has changed so much, to make it much easier, for example, with the availability of mobile broadband, and also the availability and cost-efficiency of mobile phones capable of accessing the internet.

Over time, consumer perception of, and trust in, “Made in China” is changing for the better. However, is it challenging to push it in the right direction? Are there any special steps that AliExpress is taking to help change how overseas costumers view Chinese brands and products?

I don’t think we limit ourselves to servicing Chinese brands exclusively. AliExpress has been a global business from day one, though it happened that we tapped into Chinese sellers to start with, because we are located in China, but nowadays we also have overseas sellers on our platform. Our goal is to make our consumers’ life better: we will go wherever we can find the best product.

What approaches have proven to be most effective in communicating the AliExpress brand in different markets?

I think the best way is word of mouth. Our customers have a very high repeat shopping rate, so they keep coming back and shopping. One interesting thing we discovered is that many customers visit our site or become aware of it because their friends and family told them about it in a positive way, and we have really benefited from that.

It is interesting that AliExpress is popular with millennials in certain markets. Is this a general trend and how broad is your customer base demographics?

We do tailor to different segments, spanning from the tech community to fashionistas seeking the most glamorous accessory, and beyond. But, as I say, we’re going to take it step by step, rather than trying to service everyone in every sector.

This interview with Zhiyu Chen, Chief Commercial And Product Officer At Ali Express (Alibaba Group) was originally published in June 2017 issue of CorD Magazine.
You can also read it in original here.

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