Bad Bad Day for Alibaba – Jack Ma’s House Under the Microscope

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As part of China’s World Consumer Rights Day, Jack Ma’s Alibaba was under the microscope.

In what in becoming somewhat of a tradition, special TV reports focused on the country’s top Internet companies – particularly the issue of fake services.

A key focus of reports was Alibaba’s food delivery service – Ele.me – with claims made that deliveries were made from unlicensed and unsanitary food outlets.  Also Allibaba’s C2C and O2O platforms – Taobao and Meituan-Dian Ping, were hit with criticism that vendors are providing fake products and also inflating their vendor figures.

Faced with the allegations, Alibaba was quick to react, thanking critics – including China’s official TV network CCTV –  for highlighting the problem.  Food delivery service ele.com promised a task force to crack down on problems.  This furthered the stance made by Jack Ma, about Alibaba’s crusade to end C2C ecommerce fraudsters.

elema

Alibaba’s Food Delivery Brand – Ele.Me

Why is this important to brands in China?

From the repeated mentions of about digital fraud in China Central TV’s “New Year Gala ” event over New Year to this latest series of reports on Consumer Rights Day, we see that ecommerce is now firmly, and officially, defined as part of consumer culture.

This means that a brand in China – whether you are Alibaba, or Zara – is now understood as both a real and digital entity.  That is all consumer touch points are equal in China 2.0, cracks in any aspect of presentation will expose your brand to critique, bad PR and, maybe, abandonment.

Reports this week suggest international retailers are closing stores in China (H&M as an example).  However in the context of ecommerce concerns in China, stores provide a powerful expression of consistency and reassurance for local consumers taking their first steps with brands.

In the context of China, it is important to rethink the importance of physical stores beyond transactional sites.  They provide an important representation of the brand within the local consumer journey, and compared to ecommerce, you, the brand, are in control, not a third party under the microscope, a la Alibaba.

Look out for Director of SMART, Jerry Clode’s column for Branding in Asia next week focused on understanding “Do you need stores in China?”.

Stay tuned, Be SMART, because NORMAL is not enough in this market.

About Author

Jerry Clode

Jerry Clode is Head of Digital & Social Insight at Resonance. He leads Resonance SMART, providing leading-edge research, strategy and naming for brands in China using bespoke methodologies. Jerry also produces Resonance's popular China Social Branding Report, a bi-weekly publication covering modern marketing methods of the world's top brands.

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