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Alibaba leads the pack in name recognition

Updated: 2014-05-26 07:12
By Mike Bastin ( China Daily)

Global e-commerce sales are forecast to increase by more than 20 percent this year, surpassing $1.5 trillion.

Even more significant is the growth predicted in the Asia-Pacific region, which this year is set to topple the United States as the largest market in the world by sales revenue.

At this stage of market evolution, it is still unclear which countries and companies will benefit most from this massive market surge. The United States, with its array of world-famous e-commerce corporate brands such as Amazon.com Inc, eBay Inc, Facebook and Twitter, is considered by many to be likely to enjoy substantial gain. However, the global e-commerce market, which is still very much in its infancy, does not contain any dominant brands, despite the awareness and recognition levels enjoyed by those US companies.

This lack of strong e-commerce global brands, combined with the rise of the Asia-Pacific e-commerce market, paves the way for the international emergence and dominance of many of the lesser-known industry players.

Nowhere is the e-commerce market more rampant than on the Chinese mainland, where social media consumption, in particular, has contributed to an unrivaled frenzy of excitement and competition.

It is this intense competition, particularly across the mainland, that could propel one or more of the many industry players to international dominance over the coming years.

Three of the more likely Chinese e-commerce providers that could capitalize on the opportunity to go global are Alibaba Group, VANCL.com and JD.com, all of which have been pursuing international market expansion strategies since 2010.

Fourteen years after its founding, Alibaba is the world's largest online business-to-business platform delivering e-commerce solutions for small businesses worldwide. However, younger industry players such as VANCL, China's biggest fashion e-retailer, and JD.com, the second-largest business-to-consumer online retailer in China, are following fast in its footsteps.

Undoubtedly each of these players can congratulate themselves on their mainland success.

But what are their prospects as they aim to expand internationally?

Certainly, international growth opportunities are there for these and many more players, but far greater understanding of and investment in brand building is a prerequisite to any future global success.

Despite launching its international website in 2010, it was not until March this year that VANCL started to invest more resources in its global strategy.

VANCL is to be applauded for its relatively early move into overseas expansion and its palpable ambition to succeed. But far more attention should be paid to building the VANCL brand internationally. International brand awareness levels remain painfully poor.

JD.com also ventured overseas relatively early with the launch of its global website (in English) in October 2012 and should also be commended for doing so.

But JD.com has not invested much in building corporate brand awareness and image levels globally. Furthermore, JD.com remains committed to a strategy of low cost with minimal transfer of key personnel to international cities.

In contrast, Alibaba, with its charismatic founder Jack Ma, has not shied away from international publicity-building activities. That is why Alibaba has positioned itself very much as the frontrunner in the race for global success between e-commerce players from emerging markets.

Alibaba is also well ahead in the race to float on the US stock market, which is likely to begin within the next few months. This will be an enormously positive source of international corporate brand awareness and image building.

The name "Alibaba" also provides an advantage internationally, with few around the world unaware of the folk character Ali Baba and the surrounding legend. The names VANCL and JD.com do not enjoy such a natural head-start in their quest for global recognition.

The author is a visiting professor at the

University of International Business and

Economics in Beijing and a senior lecturer

on marketing and communications at Southampton Solent University's School of Business. The views do not necessarily reflect those of China Daily.

(China Daily 05/26/2014 page20)

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