Up for grabs: Alibaba's secret sauce for winning Chinese retail
A supermarket in Alibaba's hometown of Hangzhou. Photo: AFP/Getty Images
As the debate over whether Amazon is monopolizing retail presses on, we pointed to a lurking data question for the e-commerce behemoth: Will regulators question the mountain of behavioral data Amazon has about its hundreds of millions of customers' shopping habits?
But on the other side of the world, China's homegrown e-commerce king is getting ahead of that question. Alibaba actually offers its data to the companies that sell on its platform, so they can tweak their products to better entice Chinese shoppers.
Driving the news: Alibaba is sharpening its data-sharing feature, which it offers to big-name brands — like Unilever, L’Oréal, Mars and Samsung — that sell on its Tmall app, by partnering with data-crunching companies.
- The Chinese giant announced last week that it will work with massive market research firms like Nielsen, Kantar and Euromonitor International to give companies deeper analysis of how to please Chinese consumers.
- One success story that's already come from the data-sharing is the 麻辣 (mala) Snickers bar. Alibaba told Mars, Snickers' parent company, that Chinese snackers were consistently buying food with a classic Szechuan spicy flavor called 麻辣 (mala). Snickers used that to develop a spicy chocolate bar for China that's been wildly popular.
The backstory: The key difference between Amazon and Alibaba is that Jeff Bezos' company is itself a retailer, whereas Jack Ma's firm is only a platform. So, Amazon is debuting private-label products to compete with the brands that sell on its own site, while Alibaba has no dog in the fight for customers.