Alibaba has an ambitious goal: becoming the first company to exceed $1 trillion in gross merchandise value in the next five years. To accomplish this, Alibaba is looking to expand in emerging markets, as developed markets like North America and Europe are mature and have high barriers to entry. Emerging markets with rapidly growing smartphone penetration, relatively poor offline retail experiences, challenging logistics environments, and limited online payment infrastructures are ideal targets for Alibaba’s expansion.
The mobile marketplace is a huge opportunity. Forrester expects mCommerce in India to top $19 billion by 2019— an attractive opportunity for players like Paytm, which currently counts more than 25 million users. Forrester expects that the number of online buyers in India will rise from 36 million in 2014 to 125 million by 2019.
The two most noteworthy recent events in China are obviously the APEC Summit and the Singles’ Day shopping festival. Since its creation five years ago, Singles’ Day has become the online shopping feast that almost every Chinese consumer expects.
The shopping event was created by Alibaba in 2009 as a promotion to drive sales on Tmall and Taobao on the November 11 Singles’ Day holiday. Alibaba uses the event to reward consumers and reinforce its eCommerce influence in the Chinese market. Now the most influential eCommerce event in China, Singles’ Day is no longer Alibaba’s monopoly — almost all e-tailers and even offline retailers are getting involved.
Compared with past years, the Singles’ Day 2014 campaign has several new features:
Global reach. Top eCommerce players such as Alibaba, Amazon, Jingdong, and Suning have all announced “globalization” plans and activities around this year’s event; these plans include offering a broad selection of discounted products, preferential tax rates, free or low-cost international shipping, and speedy delivery.
Big data. According to Alizila, Alibaba will apply predictive analysis to Tmall transaction data to project order volume. The Cainiao smart logistics network and its delivery partners can use this information to allocate resources and respond to demand more precisely.
Interactions between online and offline. To expand the impact of online retail to offline businesses, Alibaba conducted offline-to-online promotional activities for home renovation and home decoration projects. It also rallied more than 300 department stores in 18 cities to join the event by offering special discounts to shoppers who buy store-value cards online and use them to redeem goods in physical stores.
2015 is upon us: in Forrester’s just-released “Predictions 2015: US B2C And B2B eCommerce Players Will Struggle To Keep Up With Customers” report, we predict a number of key issues will challenge B2C eBusiness & Channel Strategy professionals in the coming year, while a number of new and exciting—but not pressing—topics will circulate. B2C eBusiness & channel strategy professionals ought to know which key issues to watch and which over-hyped trends to ignore.
What Will Happen: Flexible Fulfillment is the new term for omnichannel
Previously, when CIOs and enterprise architecture professionals talked about “business-to-business” (B2B) commerce in China, most people thought of third-party B2B marketplaces like Alibaba.com or HC360.com. Very few companies use professional B2B solutions internally, instead relying on a combination of order management systems, customer relationship management, and third-party B2B marketplaces to trade with their business partners.
This is going to change. We have observed a few trends in the Chinese market that will become major drivers for the adoption of enterprise B2B solutions. These trends were further validated during the SAP summit last week in Shenzhen.
The legacy application architecture on the market won’t address the challenges of the age of the customer. Most of the companies currently doing business in China’s B2B market are small and medium-size companies with low IT systems maturity — many of them still exchange business information by emailing Excel files. These firms must rely on third-party marketplaces for business collaboration.
Ten years ago, open source software (OSS) was more like a toy for independent software vendors (ISVs) in China: Only the geeks in R&D played around with it. However, the software industry has been developing quickly in China throughout the past decade, and technology trends such as service-oriented architecture (SOA), business process management (BPM), cloud computing, the mobile Internet, and big data are driving much broader adoption of OSS.
OSS has become a widely used element of firms’ enterprise architecture. For front-end application architecture on the client side, various open source frameworks, such as jQuery and ExtJS, have been incorporated into many ISVs’ front-end frameworks. On the server side, OSS like Node.js is becoming popular for ISVs in China for high Web throughput capabilities. From an infrastructure and information architecture perspective, open source offerings like Openstack, Cloudstack, and Eucalyptus have been piloted by major telecom carriers including China Telecom and China Unicom, as well as information and communication solution providers like Huawei and IT service providers like CIeNET. To round this out, many startup companies are developing solutions based on MongoDB, an open source NoSQL database.
Familiarity with OSS is becoming a necessary qualification for software developers and product strategy professionals. Because of the wide usage of OSS among both vendors and end users, working experience and extensive knowledge with OSS is becoming a necessary qualification not only for software engineers, but also an important factors for product strategy professionals to establish appropriate product road maps and support their business initiatives.