How Alibaba conquered online pharmacy – Sharon Gai

 

Sharon Gai

Former Alibaba executive Sharon Gai looks at Drugstorenews back on how the company conquered retail in China, focusing on pharmacy with Alibaba Health. “What this medical doctor app did was digitize that entire process,” she said.

Drugstorenews:

Gai took the discussion to Alibaba Health, noting that China only has about 1.8 doctors per every 1,000 people compared to 2.4 in the United States and 2.8 in the U.K. “This means that resources in health care are very strained in China. When there’s a lot of competition, it breeds innovation. That‘s exactly what Alibaba Health has in terms of its growth trajectory,” she said.

AliHealth started as a cloud pharmacy, but its product managers recognized that people were searching for grocery and skin care items, OTCs or certain drugs. “Ali pharmacy was pulled out of Tmall and a separate app was created,” she explained

“The product managers noted that there were people searching to buy contact lenses and prescription eyeglasses, they needed eye exams and physical exams, they were looking for sexual health products, or wanted to do STD tests or pregnancy tests. This became a snowball effect and the number of services this app started to cater to. Today Alibaba Health is a full fledged telehealth app.”

Gai also discussed how a medical doctor app was created for traditional Chinese medicine, a huge Chinese sector that she described as “a very old school brick and mortar place to play.” “What this medical doctor app did was digitize that entire process,” she said. “You open the app, consult with the Chinese medicinal doctor and he will tell you what you need and an entire packet of ingredients will be shipped right to your doorstep.”

Addressing the last pillar of Alibaba Health, a business to business pillar in which the creators built out a health knowledge map and traceability code, Gai said, “AliHealth set a standard in
creating a QR code that every single brand would need to stick on their packaging so when this product is shipped to the end customer, they can scan it and see exactly where this medicine came from. This is the interface of the telehealth app, where you also can see the balance on your health insurance card, nearby hospitals, a doctor for an online experience, get medicine delivered in around 30 minutes to an hour, order vaccinations, get eye exams, mental health services and medical beauty.”

The app also features short-form videos that offer health advice from doctors, who are becoming influencers. “As a user, you’re constantly learning about health care in general. What AliHealth really did, the big innovation, is consumerization of healthcare services,” Gai said.

Lastly, Gai said that AliHealth is good at “new retail,” a term developed by Jack Ma in 2016. “It’s basically the unification or the synchronization of online and offline services,” she said.

More at Drugstorenews.

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How Alibaba’s Taobao adjusted to tight-fisted consumers – Ashley Dudarenok

 

Ashley Dudarenok

China’s consumers are adjusting their purchasing habits and big players are adjusting their strategies to the search for cheaper products. Marketing expert Ashley Dudarenok looks at the changed strategy of Alibaba’s Taobao for the Double 12 festival, she says at marketing-interactive.

Marketing-interactive:

China has seen an abundance of huge shopping festivals over the years. However, the increasing dissatisfaction with complicated discount systems and the oversaturation of shopping events highlights a need for eCommerce platforms to innovate and align with evolving consumer preferences, said ChoZan’s Dudarenok…

The latest revamp also shows that Taobao is adapting to a change in consumer sentiment. Given the “general disinterest in shopping due to economic uncertainties” among Chinese consumers, shifting towards promoting value and affordability could serve as a strategy to re-engage customers and sustain sales, according to Ashley Dudarenok, founder of China digital consultancy ChoZan. 

“Chinese consumers are also tired of the complicated discount systems. Taobao usually offers discounts through the “满减优惠” method (e.g, 50 yuan off for every 300 yuan spent),” she added. 

By shifting its focus towards offering products of better quality at reasonable and affordable prices for consumers, Taobao’s move will benefit consumers as well as small to medium-sized brands.  

More at Marketing-interactive.

Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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Going global: key for getting rich – Rupert Hoogewerf

Rupert Hoogewerf

The 2023 Hurun China rich list sees changes, and Rupert Hoogewerf, the Hurun Report chairman and chief researcher, sees efforts to go global as a key factor for growing riches, he tells Reuters. PDD’s Temu, ByteDance’s short-video platform TikTok, and ultra-fast fashion brand Shein he sees as examples.

Reuters:

The founder of PDD Holdings saw his wealth swell by US$13.8 billion (S$18.8 billion) in a year, as a slowing global economy drove more shoppers to the Chinese company’s discount e-commerce platforms Temu and Pinduoduo, an annual rich list showed on Tuesday.

Mr Colin Huang, who founded PDD in 2015 and stepped down as chief executive in 2020, was the fastest riser in 2023’s Hurun Rich List, leaping seven places to be ranked China’s third-richest man, with a US$37.2 billion fortune. It also marked the first time he had broken into the top three ranking.

The growth of his fortune reflects the changing e-commerce landscape both in China, where consumer confidence remains low after three years of Covid-19 curbs, and abroad, where shopping platforms such as Temu and Shein are gaining steam. PDD did not immediately respond to a request for comment.

Billionaire Jack Ma, founder of rival Alibaba, which is currently going through a restructuring and working to fend off competition from the likes of PDD, fell one place from 2022 to the 10th spot.

The number of Alibaba shareholders on the list, which ranks China’s wealthiest people with a minimum net worth of 5 billion yuan (S$952.4 million), fell from 18 in 2022 to 12 this year.

Mr Richard Liu, who founded e-commerce giant JD.com, saw his wealth, and that of his wife Zhang Zetian, fall by US$6.2 billion since 2022 to US$8.26 billion, according to Hurun’s list.

JD.com’s shares fell to a record low earlier in October after banks cut its price targets, citing a weaker-than-expected recovery in consumer spending.

“Going global has been one of the key sources of growth this year,” said Mr Rupert Hoogewerf, Hurun Report chairman and chief researcher, citing PDD’s Temu, ByteDance’s short-video platform TikTok and ultra-fast fashion brand Shein as examples.

The founder of bottled water brand Nongfu Spring, Mr Zhong Shanshan, retained his first place on the list for the third year running, with a US$62 billion fortune; while Mr Pony Ma, founder of social media and gaming giant Tencent, was second, with US$38.6 billion.

More in Reuters.

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Economy: improving, but not on track – Shaun Rein

 

Shaun Rein

Business analyst Shaun Rein comments on the disappointing figures from Alibaba for CNA. “The economy is improving, but certainly not on track,” he says. While the consumers might be traveling more compared to 2019, they are certainly spending less, as their confidence is low, Rein adds.

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How the Chinaccelerator exported its China strategy to other emerging economies – William Bao Bean

 

William Bao Bean

The SOSV Chinaccelerator has been a successful Shanghai-based VC in China for a decade. Managing director William Bao Bean, explains to Russel Flannery of Forbes how they re-invented themselves and started to export their China strategy to other emerging economies as Orbit startups and stopped investing in China.

Forbes:

Flannery: What was behind the change with Chinaaccelerator and Orbit?

Bean: Orbit Startups is a rebranding and re-focusing of Chinaccelerator and MOX, which was another program based in Taiwan. Our parent organization SOSV is very much focused on a sustainability mission, which includes global emerging frontier markets where we can leverage our know-how and capital to drive economic independence. As part of sustainability, SOSV is also centered on health and climate, which of course also have lots of applications in emerging markets.

We’re a lot different than VCs that break up the world by geography, such as Europe or India. We think tech is global, and view the world in terms of vertical strengths. We all invest through our fund SOSV, but we have Orbit, which focuses on the Internet and software, HAX for hardware and IndieBio for biotech. We want the best innovation from all around the world. Often times, that’s in Silicon Valley or London, but sometimes it’s in Jakarta or Lagos.

Flannery: What happened in China?

Bean: By 2018 and 2019, Alibaba and Tencent controlled a lot of the startup ecosystem, which is why we diversified out of China. The Orbit program hasn’t invested in China in three years.

What we’re doing today is applying to startups outside of China what we learned during China’s incredible 20-year ramp up. We started in 2017-18 in Southeast Asia, and then India, Pakistan and Bangladesh. Two years ago it was sub-Saharan Africa, and then last year we had the Middle East and Latin America. So we’re bringing what we learned in China, Indonesia and India to global emerging markets and tech entrepreneurs eager to an economic transformation similar to what happened in China. A lot of what raised 800 million people out of poverty in China was driven by technology. We’re bringing the best practices, the tips and tricks, and the models that we learned in China to entrepreneurs all across the world…

Flannery: What’ve you applied from your China experience?

Bean: Digitizing mom and pop shops is a big area, and a common theme in Pakistan, Sub- Saharan Africa, the Middle East and Latin America. The challenge that you see across all of those regions is that they have many little shops — many with a history of three-four generations. There’s not much logistics, supply or financing. There’s a lot of walking, We’ve invested in Dastgyr in Pakistan, MarketForce in sub saharan africa, Suplio in Latin America. First, we fix their physical supply chain and cut middlemen. They get 30 to 70% more cash in their pocket at the end of every month.

After we fix their physical supply chain, there’s some real opportunities in digital services. The person in the local neighborhood knows the local community and customers have a sense of trust. And we’ve seen that in China and Indonesia. It’s the same opportunity. You bring technology that’s putting much more money into people’s pockets by bringing efficiency. It’s almost like water. It’s impossible to stop. In Pakistan, for instance, we invested in 24SEVEN , which is bringing digitalization to retail.

More in Forbes.

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Alibaba reorganization unlocks US$220 billion value – Shaun Rein

 

Shsun Rein

Alibaba’s plan to split its US$200 billion company into six entities with IPO potential unlocks massive opportunities for investors, says business analyst Shaun Rein to CNA. It also aligns nicely with Xi Jinping’s intention to make China’s economy, more competitive by dividing up the Alibaba giant, he adds.

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How brands can deal with the new e-commerce landscape in 2023 – Ashley Dudarenok

 

Ashley Dudarenok

China’s e-commerce landscape is changing fast and branding expert Ashley Dudarenok explains how brands can deal with the new big five: Alibaba, JD, Pinduoduo, Douyin, WeChat, for Technode. Here are her top-5 tips.

Ashley Dudarenok:

1. Adopting an overall e-commerce strategy and repositioning flagship stores on Douyin and Pinduoduo

E-commerce platforms need to adopt a comprehensive layout and reposition their flagship stores on Douyin and Pinduoduo. Douyin is focusing on developing its digital shelf e-commerce, while Pinduoduo is leveraging its advantage in high-frequency consumer goods categories to become a comprehensive platform that meets diverse needs. For brands, as the digital shelf e-commerce landscape becomes evenly matched, Douyin/Pinduoduo flagship stores will play an equally important role as their Tmall/JD flagship stores.

2. Building a stronger cross-platform synergy and seizing the opportunity to enhance bargaining power with e-commerce platforms

As e-commerce platforms become increasingly mature, the overlap of their consumer groups will inevitably continue to increase, making it more difficult to expand user increment. However, it is a good opportunity for brands to increase their bargaining chip with e-commerce platforms in terms of traffic, product promotion, and consumer data transparency. Stronger cross-platform collaboration between brand and e-commerce platforms is worth exploring on both sides, especially in category differentiation, pricing, and promotion.

3. Reducing the reliance on livestream e-commerce influencers and strengthening content co-creation

The role of e-commerce live streaming, especially influencer live streaming, in “transactions” will be further weakened. Most influencers may find that selling standard or common products are losing their appeal to the public. Influencer live streaming will reach a critical crossroads, and influencers will need to attract consumers through better content. Currently, “selling-only” influencers who lack content will lose their competitiveness and gradually be phased out. Patterns may emerge where common goods are sold more through digital shelf e-commerce and influencers will focus on more niche products with strong digital content potential like trendy goods.

4. Developing innovative supply chain solutions

Innovative supply chain solutions such as direct sourcing and supply chain financing can help brands reduce costs and improve efficiency. Brands need to optimize their organizational structure, develop cross-platform e-commerce capabilities, accumulate universal key capabilities to support multi-platform development, and lay a foundation for other e-commerce models with future development potential, such as instant retail.

5. Improving consumer experience through data analytics and personalized marketing

Brands need to use data analytics and personalized marketing to improve the consumer experience. It can help brands better understand consumer behavior and preferences, and provide tailored products and services to meet their needs. With the convergence of platform models, the profit levels of brand flagship stores on various platforms are expected to gradually converge. In order to improve efficiency, brands need to optimize their organizational structure, develop cross-platform e-commerce capabilities, accumulate universal key capabilities to support multi-platform development, and lay a foundation for other e-commerce models with future development potential, such as instant retail.

More in Technode.

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Pleas

US and China continue to dominate Hurun global unicorns 2021 – Rupert Hoogewerf

 

Rupert Hoogewerf

The US and China continue to lead the Hurun global unicorn list for 2021, says chief researcher of the report, Rupert Hoogewerf, although China is slightly behind the US, according to the Free Malaysia Today. “With its flagship TikTok closing in on 3 billion daily users, [ByteDance] has now grown to become a serious challenger to Facebook,” the report said.

The Free Malaysia Today:

China fell further behind the US in the number of startups valued at more than US$1 billion, according to a report published today by China-based researchers. However, the two countries continue to dominate the worldwide list of “unicorns”, as the highly valued unlisted companies are called.

The Global Unicorn Index 2021, compiled by Shanghai’s Hurun Research Institute, showed that Chinese unicorns accounted for 301, or 28%, of 1,058 unicorns worldwide, as of the end of November.

In all, 42 countries had at least one unicorn. Collectively, the companies were worth US$3.7 trillion.

Some 74 new Chinese unicorns were added to the list, compared with 254 in the US, which had 487, or 46%, of the global total. Despite the slower growth in China, the two countries together accounted for nearly three-quarters of the world’s unicorns.

India, which added 33 companies to the list, for a total of 54, ranked third.

“The US and China continue to dominate, with three-quarters of the world’s known unicorns, despite representing only a quarter of the world’s population,” said Rupert Hoogewerf, chairman and chief researcher for the report.

But Hoogewerf added: “The rest of the world is playing catch-up, growing their share of the world’s unicorns from 17% two years ago to 26% this year.”

ByteDance, the parent of video app developer TikTok and Chinese sister app Douyin, was the most valuable unicorn on the list, with its valuation surging to US$350 billion, up from US$270 billion at the end of March last year.

“With its flagship TikTok closing in on 3 billion daily users, [ByteDance] has now grown to become a serious challenger to Facebook,” the report said.

Valued at US$150 billion, online financial service provider Ant Group fell to second place after Chinese regulators blocked its listing last year and ordered a revamp of its payment and lending businesses. The moves were part of Beijing’s antimonopoly investigation into parent company Alibaba Group Holding…

Hurun called 2021 the most successful year for startups, backed by the presence of an entrepreneurship ecosystem comprising affluent business people, world-class universities and, more importantly, venture capitalists.

“The role of investors is evolving to mentorship and scale-up opportunities, rather than just providers of cash,” said Hoogewerf. “The world’s leading unicorn investors are building ecosystems with their portfolio, [which is] hugely attractive to the world’s fastest-growing startups.”

Sequoia led the ranks of US investors, which also included Tiger Fund, Accel and Goldman Sachs. All of these more than doubled their investments in the 2021 unicorn list compared with last year.

SoftBank of Japan, Tencent of China and Temasek Holdings of Singapore were among active Asian investors.

The unicorn list also saw 201 companies removed from the ranking: Of those, 137 went public, 25 were acquired and 39 saw their valuations fell below US$1 billion. Some of the biggest decliners in value included Katerra, a US construction company, and Ucar, a Chinese ride-sharing company.

“For every successful unicorn you see, there are thousands of failed companies, as well as a new generation of future unicorns coming through,” said Hoogewerf.

More at the Free Malaysia Today.

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China’s wave of regulatory change – Ashley Dudarenok

 

Ashley Dudarenok

Marketing expert Ashley Dudarenok looks at the wave of regulatory changes hitting industries and especially tech firms at her vlog. “China tries to set up a more sustainable digital ecosystem,” she explains

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India is still tougher to invest in compared to China – William Bao Bean

 

William Bao Bean

Some investors have been suggesting that the latest political changes in China have made India an easier place to invest. VC veteran William Bao Bean, with major experience in both countries, disagrees, he tells in the South China Morning Post. He believes the government’s efforts to break the duopoly of Tencent and Alibaba makes China for him even more attractive.

The South China Morning Post:

William Bao Bean, general partner at SOSV Chinaaccelerator, a Shanghai-based firm that helps investors in China and India, said India is not an easy place to access for foreign investors. “India is very hard to invest in for foreigners, in terms of tax rates and regulation,” Bean said. “In fact, it remains harder for foreigners to invest in India than it is to invest in China.”

Bean said his capital exposure in China accounted for roughly 25 per cent of his portfolio over the past three or four years. “Now, with the recent changes. I’m actually looking to increase my exposure to China,” said Bean, pointing out that China’s antitrust drive is breaking the duopoly of Alibaba and Tencent, opening the way to more competition and investment opportunities.

Bean said regulatory change has always been part of China’s market environment and investors need to adapt. The current change in China also comes as the market has matured, with 71 per cent of the population already connected to the internet compared with 50 per cent in India, according to government data.

More in the South China Morning Post.

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How Xi Jinping’s rules will benefit the tech sector – Shaun Rein

 

Shaun Rein

China’s crackdown on tech firms is in the longer run benefiting consumers and the industry itself, says business analyst Shaun Rein about the governmental efforts to curtail free-wheeling companies.

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Curtailing tech firms makes the industry more sustainable – Shaun Rein

 

Shaun Rein

Investors got jittery when China’s government started a coordinated action to limit the power of its tech industry. But business analyst Shaun Rein saw how powerful companies made consumers and the government weary. Rein believes stricter oversight of the technology industry will make it more sustainable, with fairer competition that will benefit consumers, he tells AP.

AP:

Until recently, tech firms operated in a regulatory gray zone, with relative freedom to create their business models, demand that merchants and vendors sign exclusive contracts with their platforms and collect user data to better understand their customers.

After China introduced health monitoring and quarantine apps during the pandemic, it became clear that tech companies like e-commerce giant Alibaba and gaming company Tencent controlled huge amounts of data, said Shaun Rein, founder and managing director of China Market Research Group in Shanghai.

“I think it was in the last year and a half that you can start to see just how much power these technology companies have,” said Rein.

Alibaba Group Holding recently was fined a record $2.8 billion over antitrust violations. Other big tech companies have been fined or investigated for alleged anti-competitive behavior and lapses in financial disclosure.

“Two years ago Chinese consumers didn’t care, they thought the convenience of apps outweighed any negative benefits,” Rein said. “But now Chinese people are quite concerned about data privacy, because Alibaba and Tencent have so much data – even more data than the government.”

Rein believes stricter oversight of the technology industry will make it more sustainable, with fairer competition that will benefit consumers.

More in AP.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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How China started to control its tech companies – Shaun Rein

 

Shaun Rein

When China’s authorities cracked down on Jack Ma’s Alibaba, it was only the start of ongoing efforts to control tech companies and manage their data streams, says Shanghai-based business analyst Shaun Rein to WRAL. “Now Chinese people are quite concerned about data privacy because Alibaba and Tencent have so much data – even more data than the government,” he adds.

WRAL:

China’s Communist Party leaders are uneasy with the growing influence of big technology firms. Key issues are monopolistic practices and handling of user data.

Until recently, tech firms operated in a regulatory gray zone, with relative freedom to create their business models, demand merchants and vendors sign exclusive contracts with their platforms and collect user data to better understand their customers.

After China introduced health monitoring and quarantine apps during the pandemic, it became clear that tech companies like e-commerce giant Alibaba and gaming company Tencent controlled huge amounts of data, said Shaun Rein, founder and managing director of China Market Research Group in Shanghai.

“I think it was in the last year and a half that you can start to see just how much power these technology companies have,” said Rein.

Alibaba Group Holding recently was fined a record $2.8 billion over antitrust violations. Other big tech companies have been fined or investigated for alleged anti-competitive behavior and lapses in financial disclosure.

“Two years ago Chinese consumers didn’t care, they thought the convenience of apps outweighed any negative benefits,” Rein said. “But now Chinese people are quite concerned about data privacy, because Alibaba and Tencent have so much data – even more data than the government.”

Rein believes stricter oversight of the technology industry will make it more sustainable, with fairer competition that will benefit consumers.

More at WRAL.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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In China social media and e-commerce are merging into one – Ashley Dudarenok

 

Ashley Dudarenok

The main difference with the rest of the world is that in China social media and e-commerce merged into platforms, says China marketing guru Ashley Dudarenok. When you want to dive into China, you have to pick your platform and realize they are different from what you are used to, she adds. Most likely you have to pick one of them.

Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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