How Alibaba became a success in China - Shaun Rein

Shaun Rein

When Alibaba emerged, it first had to face formidable competition from the US. Business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order explains in the South China Morning Post how the nimble operation from Hangzhou was able to beat EachNet and eBay.

The South China Morning Post:

“The initial success of Taobao was as much due to the failure of EachNet and eBay’s American management teams, as to the success and savviness of the Alibaba management team,” said Shaun Rein, the managing director of China Market Research Group and author of The War for China’s Wallet: Profiting from the New World Order. 

“A lot of Americans complain that Western tech companies cannot succeed in China because of the government, but in fact a lot of the failures were due to the management teams, from eBay to Google.”

More at the South China Morning Post. Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts to help you on the China take of its digital transformation? Do check out this list.

How Ebay failed in China - Helen Wang

Jack Ma of Alibaba

In the slipstream of the most recent Yahoo-Alibaba brawl Helen Wang recalls the long-standing tradition of failure Yahoo's ecommerce site Ebay had in China. From an excerpt of her upcoming book "The Chinese Dream" in Forbes.
The struggle started in 2004:

In 2004, I visited Alibaba at its headquarters in Hangzhou. It is located on a campus of three ten-story buildings in the northeastern part of Hangzhou, about a ten-minute taxi drive from West Lake. In the lobby, a flat panel TV was streaming video clips of Jack Ma speaking at various public events where his admirers, most of them in their twenties, were cheering him like a rock star. While visiting Alibaba’s headquarters in Hangzhou, I felt the same “insanely great” energy of entrepreneurship as I felt in Silicon Valley. When I asked a senior manager at Alibaba whether the company was worried that it would be bought by eBay, I was blown away by the answer: “We will buy eBay!”

As we know now, Ebay failed that epic struggle, that is still going on. Helen Wang:

First, eBay failed to recognize that the Chinese market and the business environment are very different from that of the West. EBay sent a German manager to lead the China operation and brought in a chief technology officer from the United States. Neither one spoke Chinese or understood the local market. It was eBay’s biggest mistake. Second, because the top management team didn’t understand the local market, they spent a lot of money doing the wrong things, such as advertising on the Internet in a country where small businesses didn’t use the Internet. The fact that eBay had a strong brand in the United States didn’t mean it would be a strong brand in China. Third, rather than adapt products and services to local customers, eBay stuck to its “global platform,” which again did not fit local customers’ tastes and preferences.

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Image by Fantake via Flickr

Helen Wang

Helen Wang is a speaker at the China Speakers Bureau. When you need her insights at your meeting of conference, do get in touch.

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Chinese brands moving up the value chain - Shaun Rein

Shaun Rein   by Fantake via Flickr

Chinese brands might have been competing on prices and distribution in 2005, in 2010 they are moving up in the value chain and worry Western brands, writes Shaun Rein in Forbes. Quality and image-building have entered China's board rooms.

Look at Google. Our research suggests that Google failed in China in large part because consumers believed that Baidu had far better Chinese-language search capabilities, not just because of an unfair playing field. In head-to-head search comparisons we conducted, Baidu's results weren't necessarily much better than Google's, but its branding as the site that knows Chinese better than Google and that has technology as good has helped it dominate. Unused to serious local competition, Google was slow to roll out local services and marketing campaigns that would resonate with Chinese consumers. Similarly, Ctrip, an online travel site, is beating up Expedia, and Taobao, the online auction site, remains far ahead of eBay. They are better branded, and they fit the needs of local consumers better.

 More trends multinational companies have to watch out for in China in Forbes: rising labor costs and the new focus on domestic consumption.

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Shaun Rein is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch.

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