If Alibaba starts to be strategic partnered service platform for italian brands are we sure to get ready soon for that?

Last month we got first Matteo Renzi’s institutional mission as italian prime minister during official visit in Beijing. And after France and UK it was our turn to sign specific agreements for mutual development on key sectors, and talking about chinese market, as I’m already teaching for executive master programs in NIBI for Internationalization of Businesses on Eastern Asia Markets (New Institute for International Business in Milan), we need first of all to keep on mind how nowadays is very important the role of online sales for import-brands in China.

That’s why the first interlocutor for our Ministry of Economic Development  Mrs. Federica Guidi was Alibaba, main player for online sales that is boosting two specific platforms like Tmall and Taobao for B2c dynamics also for imported products.

elibaba e iitalia

As clarified in presence of chinese prime minister Li Keqiang, some brands as made in italy’s production, have been already introduced some years ago on Alibaba but comparing with other products and brands they are still few and needs more promotion.

In particular it’s really necessary to develop some specific strategies to make on focus features of italian productive’s excellences cause most of the times even if chinese market is pretty interested to buy foreign high quality’s products online, they are not well aware about brands, own distinctive features as much as they’ve never been in Italy before or well familiar with specific products.

In addition if also we should consider how communications strategy and publicity are on continuous development in China, where recently there’s going on get structured well framed scenario for promotion, marketing and PR than before, but comparing with western professional tools of doing business communication they cannot be used as entry-keys for the market,  to facilitate sales of specific brands with high level’s distinctive features, first of all it’s important for foreign brands to be represented as “available” products. So Alibaba is really good choice to start on doing that.

The hardest point on dealing with big group as Alibaba for small medium company  consist of some barriers on company’s registration and access to its services for manufacturers, cause usually in the past Alibaba allowed chinese distributors or whole sellers only as contractors for own specific online sales platforms for b2C  (like Tmall and Taobao).

We needed political and institutional introduction to sit down at negotiation’s table with Mr. Jack Ma, patron of Alibaba, and the strategy of our government seemed having sense in this step: made in italy means excellent quality, small production comparing with potential of chinese market and companies with familiar or low managerial trust’s asset (cfr Francis Fukuyama’s definition about italian corporate system) so the first way to consider internationalization should be get preliminary access on online sales platform as facilitate dimension of entry as follows

– even if the company is still present in Italy without any particular official JV with chinese whole seller / distributor

– simple contracts to get access to services offered by Alibaba

– dedicated team taking care of italian brands

– cooperation for defense of intellectual property for italian products

Even if the agreement represents a new important step ahead it still remains to understand in which way our SME will be able to join such preferential assistance for promoting on Alibaba, the costs of the service and in particular who will manage selection of brands and in which terms (the agreement specifies particular interest for luxury and  high level’s products).

Personally speaking I think that ITA (Italian Trade Agency) directly linked with Ministry for Economic Development, will have important role about such dynamics  and the key person of this joint-program was first of all Fu Yixiang vice-president of Italian – Chinese Chamber of Commerce in Rome, whom introduced Jack Ma on considering this cooperation’s perspective with our Government.  So the match starts as political / institutional agenda.

I think that “the red card” ( or rather political involvement on boosting business issues with chinese counterpart) is totally good strategy (as whoever works with China well knows the importance of political action on market’s issues) but the matter now is represented by orientation’s scheme for brands and companies that would be introduced on online sales maker in China.

china sales

Indeed doing online business in China is totally different than in Europe, USA or Japan and it needs specific training cause probably most of italian SME still don’t have “fully equipped” departments to realize as this step is really internationalization’s matter.

Some successful companies like YOOX for example, if we think about fashion’s brands, put on feature the lack of skills for our brands on approaching online sales in China from 2008 and prepared the best way to get internationalization’s tools for products before promoting them online. It’s great news to know that by now we’ll be able probably to facilitate the access of more brands in sustainable way on chinese online sales market but it’s urgent to prepare SME making them operatives on right way to develop elements about management, production, communication, research and strategic planning that could match with new perspective of meeting chinese clients online.

Management: International vision is a must, cross cultural skills needed, awareness about chinese social networks and online scenario cause they represent parallel market.

Production: Tmall and Taobao are global markets inside national market with high performance of success for sales towards well framed targets (different regions, different cultures, different styles)

Communications: managing team that operates into online businesses are sometimes really different than usual ex so enterprises or usual main trading companies which we were familiar to do business with, timing of doing business online needs specific attention, tools used to communicate with chinese counterpart (stop email – ok instant massaging) must be well selected

Research and Strategic Planning: publicity, online communities, competitors and  investments for online presence,  (around 10% of annual investments for maintenance and develop of business from companies in China is for online publicity) needs dedicated team to sustain planned objectives.

If will be able to assist italian companies not only on getting sustainable entry for online platforms but also on providing for them specific skills and preparation to manage diversified tools that such scenario constantly involves, in addition with cross cultural  vision that I think will always represent “distinctive  plus” for people whom wanna doing business in China

 

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