Q&A: Alibaba's China Marketplaces Chief Talks Taobao, Tmall

    By | Small Business

    On March 6, Alibaba Group named Jeff Zhang, 41, to head the company’s China retail marketplaces Tmall.com, Taobao Marketplace and group-buying website Juhuasuan. An 11-year Alibaba veteran with a coding and business background, Zhang has held top positions at all three of the online-shopping platforms he now oversees and also led Alibaba’s wholesale marketplace 1688.com.

    In the Alizila Q&A below, Zhang—known as a versatile, detail-oriented manager who has been spotted fixing his own bicycle while on the way to work—explains why small merchants are still beautiful at Alibaba and talks about some of the changes in store for the company's bread-and-butter businesses:

    Q: Thanks for taking the interview, Jeff. First off, what are some of your 2015 priorities when it comes to managing the three platforms?

    A: Our China retail marketplaces have been performing well, pulling in RMB 787 billion in GMV during the October-to-December quarter. My mandate is clear. I want to prioritize merchant quality and customer satisfaction, and increase resource integration across the three platforms. I believe that data is Alibaba Group’s core advantage. By using big data and personalization technology, we can raise the bar to ensure our users have the best possible experience when they visit Tmall or Taobao or Juhuasuan.

    In 2015, we will launch more mobile products and customer service initiatives, and continue our fight against counterfeits. We are also going to push innovation as a main theme. By providing SMEs with market intelligence, we can help drive innovation within China’s manufacturing sector and lead to greater awareness of Chinese brands. We think this will build a more globally competitive Chinese market.

    Q: What was the rationale behind the integration of Tmall, Taobao and Juhuasuan?

    A: In my years at the company, I have worked at Tmall, Taobao and Juhuasuan, working in different functions. Each time I moved into a new position, I relished the challenge and opportunity. The integration was a normal business decision. The company felt we could make it easier for merchants to coordinate with our operations teams. We would communicate more effectively internally and increase cooperation across the board. Being integrated will help the platforms develop because we can now react more quickly and nimbly to changes and not trip over ourselves because of business overlaps. I think it’s a good thing.

    One goal I’m working towards is ensuring my team thinks about Taobao, Tmall and Juhuasuan as integrated businesses. We have to start thinking in terms of how our merchants sell and how our users shop – which is in terms of categories, such as apparel or cosmetics. They are not concerned about the way we segment our business internally. They are looking for a seamless shopping and selling experience. By focusing on categories, we can help merchants sell across our different platforms and develop a better and more comprehensive shopping experience.

    Q:  Are there some platform-specific changes planned that you can tell us about?

    A: For Tmall, we implemented a few changes to the merchant guidelines on March 9. These changes were made to increase merchant quality and to refine our brand offerings to consumers. In some categories like apparel and cosmetics, we now offer a fast track for brands on a preset list to join Tmall. If they are on the list they can apply online. So it’s very convenient. Right now we have tens of thousands of merchants on Tmall; the updated guidelines raise the bar for entry with the aim of attracting only top-quality merchants. We want to help Tmall maintain a competitive environment for merchants to do business and encourage them to provide quality customer service. Our goal is to ensure customers who shop on Tmall get the best shopping experience, best customer service and best quality products compared to anywhere else online.

    For Taobao Marketplace, our ongoing goal is to ensure we support small merchants in their bid to differentiate themselves and provide innovative products to customers. Taobao is full of unique products that cater to a wide variety of people and we want to encourage this. This year we plan to roll out more user interactive features on Taobao to improve user stickiness and we plan to use customer shopping data to create a more personalized shopping experience.

    Juhuasuan is an excellent platform for SMEs looking to launch promotional campaigns and we believe this group-buying model has a long runway for growth. We will spare no effort in supporting Juhuasuan.

    Last but not least, on the mobile front, we plan to push unique products to consumers through our targeting technology. For merchants, we are rolling out a customer-management tool to help them boost their mobile businesses. We are making good progress when it comes to developing mobile shopping across our platforms.

    Q: How do you explain the differences between Taobao and Tmall?

    A: The two platforms are positioned very differently. Taobao is more diverse. Our aim for Taobao is to be “small and beautiful.” This doesn’t mean Taobao is small-scale. It means that Taobao is more focused on long-tail e-commerce where users can find a large variety of products to choose from. We think this is Taobao’s unique selling point, that users from all walks of life can find exclusive and special products on Taobao.

    Tmall is about more established brands, customer service and product quality. On Tmall and on Taobao, we strive to promote innovation and uniqueness. Having thousands of similar products on the platforms will damage the user experience and merchant profitability. We are in the business of fostering innovation across all our platforms.

    Q: How do merchants choose whether they should open up on Taobao or Tmall?

    A: Tmall has more international brands and well-known domestic brands and the merchant-entry requirements are higher. Taobao is perfect for original brands and smaller merchants offering a wide variety of products; users come to Taobao to look for everything under the sun. Our view toward which platform to join is simple: whether Tmall or Taobao, we are encouraging quality merchants to provide quality products and services.

    Q: What is your take on the competitive landscape?

    A: Our main competitors deliver products to limited areas in China and they don’t have as many product categories. We are different because our platforms cover the whole country including Urumqi and we support our logistics partners to provide fast delivery services to all areas. When people shop online they want authentic products and high-quality customer service; on these two fronts we will never rest. At the moment, the millions of Alibaba users who come to our platforms to shop trust our platforms and our commitment to them. This is not something we take for granted. We seek to continually gain their trust and support because there is still a long journey ahead for e-commerce in China.

    Q: After 11 years at Alibaba, what do you think are your biggest insights into the company?

    A: I’m most proud to have witnessed the development of e-commerce in China. With Alibaba, I have experienced different parts of the business, from coding to product design to business operations. When I joined Taobao in 2004, the business was very small. Over the years I have watched Alibaba grow and flourish by supporting small businesses and the growing ranks of middle-class Chinese consumers, and this has helped to transform China.

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