Zhang Yong: E-commerce And Media Both Matter

摘要: Every enterprise has to enter the field of e-commerce eventually, as well as perfecting their operation content and community. Internet celebrities are the perfect examples.

Ten days ago, Liu Qiangdong and Jack Ma presented a question at Yabuli in Northeast China: Whether traditional enterprises should do e-commerce business. Today on the 2016 Tmall Global Merchant Conference, Alibaba Group’s CEO Zhang Yong appealed to the crowd that all enterprises should get into the field of e-commerce. For that many senior executives at Alibaba give out their suggestions and even detailed instruction, telling merchants how to utilize e-commerce.

Liu Qiangdong believes that enterprises should cooperate with e-commerce companies and develop online business, meaning they don’t necessarily need to do e-commerce business themselves. According to Jack Ma, e-commerce is a tendency just like the energy revolution that pushed humans to enter the age of electricity from coal era. Whether to develop e-commerce business or not depend on if you believe it’s the future. In that case, outsourcing e-commerce business to third parties doesn’t benefit enterprises in terms of getting to know their clients better.

Zhang Yong also pointed out that the consumers are very different than the past. Nowadays consumers are more willing to spend more time on communities and media. Sometimes they would just simply like some products or content just because the people they like favor them. Therefore e-commerce business is very different as well. “I believe most companies disagree with simply making an online version of a business,” Zhang added. Videos are a trend, which can serve as powerful promotion channel.

Alibaba’s CEO Zhang Yong, Jing Jie and merchant division’s manager Zhang Kuo shared a few guides for enterprises ready to enter the e-commerce sector as followed:

1. Content: Fan economy, new media operation and video content

What’s the relationship between content and fans and data traffic? If you really know about the target group and have the content your consumers are interested in, whether it’s the post-90s or post-95s generation, then they will be willing to help promote and spread your products. The better you content is, the more fans you will have. The more fans you have, the more traffic you will gain. This is something that doesn’t exist in the pc era.

Take Internet celebrities as an example. On live video streaming platform, the host can promote products better since they can response to viewers’ questions real-time, which is a completely different experience.

2. Data

A consumer could have thousands of different purchasing scenes that could be used as data to improve sales strategy and promotion strategy. Imagine all the data you can get from consumers and the power they have.

3. Marketing strategies of new festivals and hot social incidents

Through making use of certain social incidents, IP, and marketing hot fields, brands are able to become popular overnight, which helps them gain a lot of fans and new users. For instance, brands can increase the sales during shopping festivals and attract fans during brands’ days.

4. Overseas and rural markets

What follows is the transcript of Zhang Yong’s speech, edited by TMTpost:

Today we have witnessed the great changes in the business world. Businesses are now very different from the previous years. Now they are all thinking about how to better use the Internet, especially e-commerce, to empower their business.

During this process, there will be companies that are able to foresee the future tendency and make their whole businesses digital. Tmall here serves as a role that helps them succeed. Tmall is just like a thruster in this sense that pushes businesses to go e-commerce and Internet.

Tmall has always been advocating a concept of self-run brand, which means all businesses can directly reach their consumers.

During this process, the most important thing is catch new opportunities. Besides that, knowing how to upgrade business with e-commerce is also essential. Under these circumstances, Tmall this year will do three things with businesses.

Users: Taobao has Tmall’s back, which means we have the largest and most active consumer group in China. We know their name, address, purchasing preference. We know where they live, work, and study from the 600 million different addresses on our system. All these users are active on an online society. We can cooperate with brands to make a breakthrough on our resource in users. Brands themselves can also benefit from knowing their consumers better as we dig deeper into the data collected from the consumer group. We wish to help brands manage their clients better. This is the priority for Tmall this year.

Products: The sharing of products around the globe is not only a matter of the sharing of SKU, but more of the inventory. It’s a sharing based on price and products. I believe this is an indispensable part in evolving to a whole-channel operation model. By this point, the e-commerce sector is no longer a special zone. It has its own system and production line. In the future the whole business will be backed by a flexible supply chain that can react fast and is strong enough to support C2B model. The truth is most products need supply chains like that.

Services: We need to break the barrier between online and offline services as well as the barriers that users face from different terminals. This is extremely important for the industries in which services really matter.

E-commerce and media

Consumers also spend a great amount of time on browsing through different platforms other than e-commerce platforms. We wish to break the barrier between e-commerce platforms and media. This is something we have been working on for the past two years. By far we have made quite some progress, including the acquisition of Youku and UC web, the investment in Sina Weibo. We have found our place in the media field.

In this process, Tmall’s platform and media’s platform can have a big chemical reaction. The catalyst here is the big data, since consumers’ data are connected. Today on all e-commerce platforms and media platforms we can share the data. Whether it’s investing in Weibo or Youku, the first thing we did is to share our ID base in hopes of better identifying our consumers on e-commerce and media platforms. We want to enable businesses to reach the consumers they target.

Communities, content and life service in a wireless age

We are now in a wireless age where a new generation of workers of knowledge economy have appeared, among whom Internet celebrities have been extremely active. These knowledge economy workers base their business on their fan base and build their user group to which they sell their products. As the Internet, in some sense a form of we-media, more content producers emerge. Some of them might not even produce any products, but they represent a lifestyle, or a hobby. During this process, consumers spend money on those hobbies and become more interested in the content they produce. In the end they will be attracted by related commercial items.

Therefore, there are three main directions of going wireless for Alibaba: We want to make our communities, content and life services wireless.

Therefore in latest meetings with brands on our platforms, I would always ask them if there’s any new brands from any e-commerce teams, if they have operation professionals that are familiar with Alibaba’s platforms and their own content operation teams. Besides that, it’s also important for businesses to turn their business blueprints, materials and resources into a mechanism of consumable content. As a matter of fact, the content mechanism is a very good source of content itself. Content mechanism doesn't sell products, but surround products with many sources. Such mechanism not only promotions contents, but also eventually makes content consumable and gradually makes consumers fall in love with the brand, forming a fan economy. In this case there are a lot of things for businesses to do to boost their competitiveness.

New media is needed in every industry. Our product architecture is already very clear. We have launched commercial campaigns run by shopping guides as well as Internet celebrities. With our algorithm, we can make shopping information aggregation apps like Taobao Toutiao and business-run we-media platform such as WeTaobao. We hope to create more platforms for businesses where they can set up their foothold in this wireless age.

I believe there will be a great number of presentations, introductions, and promotions of products, functions, and scenes, which will be based on videos. Therefore we need to build a new system that is backed by video materials.

At last, Alibaba’s fundamental strategy for the next five and ten years will still center on internationalization, rural areas and big data cloud computing. This year we will also focus on building a new line of business, enterprise procurement. We are consumers as well as providers. It’s essential for businesses to know how exactly the whole business system works.

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[The article is published and edited with authorization from the author @Wang Xuan, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.

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