Maggie Zhou, Australia and New Zealand Managing Director of Alibaba Group, is the inaugural Victorian Government Honorary Business Ambassador, which enlists high-performing business leaders to help promote trade and investment. Her company has a strong connection to Australia: in 2016, Alibaba Cloud launched here, enabling over 8000 retail outlets to accept Alipay and currently, Alibaba Group has over 1300 Australian brands on its Tmall and Tmall Global platforms – many of which have entered China for the first time.
What do you love most about your ambassadorial role?
Helping to promote Victoria and Australia as places to do business. I’ve seen first-hand what local businesses of all sizes have to offer, so I’m thrilled to use my experience to provide insights.
How is your company’s presence helping to transform Victoria’s economy?
It’s an exciting time for Victorian businesses. With a presence in Melbourne, we’re helping to grow opportunities for local businesses to access China and other markets around the world through our online channels.
Over the past few years, the government has taken “Brand Victoria” to the world, attracting more leading global companies to invest in the state’s booming tech sector. How is that approach being received in China?
The Victorian Government has demonstrated it’s eager to promote the strengths of local businesses, especially SMEs, and is committed to ensuring they have the opportunity to access global markets. This is good for the local economy and jobs, and it also creates benefits for the millions of consumers in China and across Asia eager to access products of Australian businesses. For our part, Alibaba Group is continuing to travel across all of the Australian and New Zealand region to assist businesses and explore opportunities to engage with new partners who want greater access to global customers.
What are the state’s key strengths for doing business?
Victoria offers a strong economy that is consistently growing. Its world-class infrastructure supports robust export markets. Its location means Victoria is uniquely placed to service the Asia Pacific, even sharing several time zones. And it has a diverse, vibrant business community committed to engaging with global markets. These strengths are underpinned by initiatives such as the Asia Gateway program, which helps local companies access the huge opportunities of Asia’s fast-growing economies.
Victoria has long-been renowned for its multicultural identity. Why is diversity good for business?
Australia’s migrant communities play an important part in connecting places like Victoria to the world: one example is Victoria’s Chinese community and its role in growing exports to China and promoting the state as a destination for tourism and education.
Why is Victoria a perfect location for Alibaba to set up regional headquarters?
A presence in Victoria puts us in proximity to a number of our existing customers, and also allows us to service the entire ANZ region. Australia and New Zealand are a core part of Alibaba’s goal to serve two billion customers and support tens of millions of small businesses globally by 2026.
Advice to Victorian business seeking to break into the Chinese, South East Asia or Indian markets?
E-commerce rules and regulations in China, and around the world, are still new and evolving, so businesses need to continue to adjust their strategies. However, we don’t see this as an ongoing problem for Victorian businesses. Australia’s excellent reputation for ‘clean and green’ and quality products throughout China, and the rest of Asia, means local products will continue to be in high demand throughout Asia.
China, with a rapidly expanding middle class, is anticipated to overtake the US economy by 2032, according to London’s Centre for Economics and Business Research. This economic strength is already translating into a growing consumer appetite for local products. Can you share an example?
During our 11.11 Global Shopping Festival last November, Australia ranked as the third highest selling country into China, up from fourth place in 2016 and fifth place the year before. In particular, Chinese consumers have responded exceptionally well to Australian products in categories such as mother and baby, health supplements and vitamins, cosmetics, food and beverages, homewares and apparel. There will continue to be enormous opportunities for Victorian exporters to take advantage of the significant demand for their products in China.
China’s strong economic growth and rising per capita income (evidenced in the emergence of second-tier markets and wealthy coastal cities beyond the bustling hubs of Beijing, Shanghai and Guangzhou) is increasing export opportunities for Australian companies. In 2016, Australian beef exports to China were worth $670.4 million, dairy exports were worth $705 million and demand for our food and beverage sector is also surging.
To what extent could Australian food businesses adapt more rapidly to expand their reach and sales volume in China by using e-commerce?
Australian brands are performing well in China due to their ‘clean and green’ image and the demand in China for quality products. Nowhere is the quality of Australian products clearer than in categories like fresh food and agriculture, so the potential for Australian food businesses to export to China through e-commerce is enormous. In fact, we’re already seeing many Australian food businesses export to China via our channels. One example is Tmall Fresh, Tmall’s fresh food channel, which is creating opportunities for Australian companies that export dairy, meat, seafood, fruit and other fresh foods to China.
Biggest challenge facing e-commerce businesses in 2018?
A major challenge will be how to respond to the convergence of ‘offline’ and ‘online’ retail – what we call ‘New Retail’. We anticipate internet technology and big data analytics will continue to open up opportunities for ‘bricks and mortar’ business models to harness the advantages of e-commerce. Alibaba Group CEO Daniel Zhang describes New Retail is “the new animal in the retail market”, but adds that like any animal in a dark room, it’s impossible to describe what it actually looks like right now. No one is quite sure how this technological disruption will unfold, and a major challenge and opportunity for e-commerce businesses going forward will be how they respond to New Retail.
Use of artificial intelligence, augmented reality (AR) and robotics is increasing in our daily lives. How do e-commerce businesses need to adapt?
With advancements in technology, consumers are increasingly looking for a retail experience that combines both online and offline shopping. Alibaba is responding to these changing consumer expectations with our New Retail strategy. For example, during our 11.11 Global Shopping Festival last year, we converted nearly 100,000 stores across 334 cities in China into ‘smart stores’, which featured a range of New Retail experiences, including facial recognition payment and scan-and-deliver 020 shopping, when customers in a physical store scan a product and have it delivered offline. We even showcased augmented reality technologies that allowed customers to digitally experience different types of lipstick. And more broadly, we’re partnering with retailers across China to develop Hema supermarkets, which bring to life a range of our New Retail technologies within a traditional retail experience, such as a mobile app that allows customers to research and purchase products in store. Currently there are 20 Hema locations in China.
How do you build a strong team?
Through shared values. From Alibaba Group’s humble beginnings in Jack Ma’s Hangzhou apartment in 1999, to our 18th birthday last year when we reached over 50,000 employees across the world, our shared company values have remained the same and are the key to a great team culture. Our six values are: putting interests of consumers and merchants first; teamwork that enables ordinary people to achieve extraordinary things; embracing change and adapting to new business conditions; upholding the highest standards of honesty and integrity; approaching everything with passion; and commitment to demonstrating perseverance and excellence.
Where do you see the company in a decade?
We’ve grown beyond our e-commerce roots into a fully-fledged technology company: this is essential to understanding what we’ll look like in 10 years’ time. Alibaba has developed its own digital ecosystem of new and interconnected businesses, which includes everything from cloud, logistics, payments and artificial intelligence, to digital entertainment and media. To paraphrase our CEO Daniel Zhang, Alibaba is now an economy unto itself. We’re working to build the entire infrastructure to make it easier for all participants in this economy to do business.
Maggie Zhou on how to be globally successful
Tip 1: Put people first. “At Alibaba, our customers, partners and employees will always remain at the centre of our success.”
Tip 2: Build a prosperous ecosystem. “We pride ourselves on operating an ecosystem where all participants – customers, merchants, employees – can prosper.”
Tip 3: Remember what makes you successful in the first place. “Have a clear mission to make it easier to do business anywhere. This has remained our core focus, even as we continue to innovate and invest in new businesses areas.”