E-commerce giants lack brand strategy

A recent myth, after Uber selling its stake to a Chinese competitor, is that foreigners always lose in the Chinese internet market. Must it always be the case? Perhaps not.

It may sound convenient to say those who lost all did so because of poor strategy. But strategy does occupy an important place in any business in a large country. So, if Amazon, seemingly the lone foreign warrior fighting in a market dominated by Alibaba and JD.com, can have a China strategy and manage it well, it may not have to beat a Uber-ish retreat.

Think about it. Which woman in this country (and you don’t have to know any Chinese language to tell) would like to wear an Alibaba summer dress or hold a JD handbag?

It is not easy to develop either Chinese e-commerce company’s name into a brand of consumer goods. In fact, neither company has done that. Nor have they developed their own lines of products.

They are both, for all their differentiations, what people call platform companies, offering themselves as online marketplace for other offline businesses. Alibaba is trying to offer an ever-increasing variety of goods and services while JD is spending huge money building its own logistic and delivery services.

By comparison, Amazon is obviously playing a different game in its home base.

Bloomberg recently reported that Amazon is already the biggest online seller of clothes in the US, whose apparel sales totaling $16.3 billion in 2017.

That’s second only to Walmart in overall apparel market share, according to financial analysts.

Amazon has launched its own private-label clothing brands over the past couple of years, and this year, is sponsoring the first ever New York Men’s Fashion Week.

These are the things that Chinese e-commerce companies have still to learn. Nor do they seem to have a strategy to develop in that direction.

Even if they do, the biggest two, Alibaba and JD, don’t seem to have the right brand names to leverage on.

So why, one may wonder, must Amazon continue to compete in China by selling basically the same items as other e-commerce sites do?

Maybe, a same mistake is being repeated in which the China market is simply taken as part of the dull periphery of a central market, even though the central market can no longer serve as a central driving force for the overall market, and something rather interesting is happening from the periphery.

And if this is the case, who can say there’s a strategy?

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Greg Fountain is a copy editor and occasional presenter for China Daily. Before moving to Beijing in January, 2016 he worked for newspapers in the Middle East and UK. He has an M.A in Print Journalism from the University of Sheffield, a B.A in English and History from the University of Reading.