Live from Shoptalk Europe: Roland Palmer | Alibaba

Speaker 1: Haixia Yu: Hello, and welcome to another episode of the RETHINK Retail Podcast, live from London, at Shoptalk Europe. I’m Haixia Yu and today I’m joined with my guest Roland Palmer. Welcome! Roland Palmer: Thank you, it’s great to be here. Haixia Yu: Roland is a general manager for Alibaba’s UK, Belgium, Netherlands and Nortex. You’re apparently very experienced with European retail market and we share some cross border eCommerce, that business is background as well. So first of all, some background question. So prior to Alibaba, you director for Alipay in Northwest Europe, then a board member and CEO for Blocker Holding and previous management positions at Coca-Cola and Unilever. What was your journey like to Alibaba? Roland Palmer: So, that’s right. I worked in retail, in consulting, fast moving consumer goods and I’ve now been almost seven years at Alibaba. I’m thoroughly enjoying the current challenge, at least in Beijing and constant change. Haixia Yu: So then following to that, can you say a little bit about your current role? Roland Palmer: And in international commerces outside of China, the main ones there on the B2C side are AliExpress, which is a global platform. Then we have Lazada, which is really focused in Southeast Asia. And we have Trendyol, which is primarily focused in Turkey today. And then we have our B2B global platform, Alibaba.com, which was actually the first one we started with. And my role is actually to work with companies in Europe who want to do business with one of those platforms. And in addition to all of those platforms, we have world class infrastructure. So it’s our Cainiao logistics company, and also Alibaba Cloud, providing world class cloud computing services. Haixia Yu: Great, you have a lot on your shoulders. Roland Palmer: Well, I have a lot of great colleagues to help me do it. Haixia Yu: So as GM for UK Netherland, Belgium and Nordics, what perspectives or set of values have helped you execute your role effectively? And what advice might you give others executing strategies on the global level in today’s complex and Omni-Channel landscapre? Roland Palmer: Yeah, so I think the main value within our company is to be agile. We’ve got constant change, you’ll be hit with all sorts of things every day. And all of the different businesses are changing and moving at a very fast pace. The advice I’d give to companies is to embrace innovation, to test and learn. And I think there’s so many exciting new technologies out there, start to use them and bring them into your business as quickly as possible. Haixia Yu: And then, because of your role here, European brands unlock the China export opportunity. You’ll know that there’s big opportunity there and then what’s the biggest perceived barriers and what advice would you give to brands entering China? Roland Palmer: Our mission as a company is to make it easy to do business everywhere, anywhere in the world. And so for us exporting is key. And what we’ve done recently, we commissioned some research in the UK. We asked around 2000 companies, how are you looking at export? Around 75% of them said they’re doing some kind of international trade, but 48%, so almost half said, “Well, we see all sorts of barriers and challenges.” The main ones were things like customs, increased paperwork, payment issues, whether it’s late payment or payment security, and also understanding the cultural issues when you’re exporting to a country which you don’t know anything about. And I think that’s where, the online platform and the online marketplace comes in and really helps because you’ve got suddenly a platform which can make it easy, in terms of the logistics, in terms of the payments, but also in terms of providing a huge customer base to companies they wouldn’t otherwise have had the access to and for the consumers it’s great because it’s a lot of choice and great value. Haixia Yu: Thank you. And in today’s keynote at the Shelter of Europe, you mentioned about live streaming. Live streaming is apparently very big in China, and we’ve seen an uptake of companies testing this out in Europe. So how is this offering evolving for the Europe market? Roland Palmer: Well before we talk about Europe, it’s good to set the scene for people to sort of understand what’s happening in China. Roland Palmer: We’ve got Taobao live streaming, as the largest live stream commerce platform in the world. We did $75 billion of GMV, which is gross merchandising value across our live streaming platform in financial year 21. Now this year in 22, we forecasting 660 million live stream users, around 60% of them are going to be clicking on the product. So there are very high conversion rates and a lot of content being made. 150,000 hours of content every 24 hours, that’s 17 years of content, every 24 hours, it’s mind blowing, isn’t it? So, then the question is, is that going to be the same in Europe? The answer is yes and no. So it’s obviously a big trend. It’s happening already in Europe, but we are in the test and learn phase. Roland Palmer: So you see companies such as Burberry doing in 2020 live stream fashion show, you see in the other sector, which is big on live streaming, it’s beauty, you see companies like Douglas and Germany doing Douglas Live. And some of these European initiatives are seeing very encouraging initial results. So 14 to 15 times the engagement of social media, three to five times the sales, 50% more customers, it’s very, very encouraging. And then there’s always the skeptics, the companies who say, “Well, hold on, despite all of that, why should I do it? Because the ecosystem is different. China is different.” And they’re right, China is different. However, let’s not wait, I would say. Because you can work and partner with companies today, you can already integrate live streaming into your eCommerce platform so you can get started. And there’s a nice startup, for example, in Sweden called Bambuser, who’s doing this with Monkis, a sub-brand of H&M. Haixia Yu: And talking about live streaming, I think it’s related topic, another fancy topic is metaverse. How do you think live streaming play a role in metaverse? Roland Palmer: Well metaverse is one of the trending topics at the moment. I think in the last couple of months, the increase in search in metaverse is over 7000% on search. So everybody wants to know about metaverse. I think more than 75% of business people want to know about it, but only 15% have a clue, even when they start looking into it. Haixia Yu: You’re one of them, right? Roland Palmer: Well, I’m not sure. You can tell me. But I like to start with the definition, and the definition is probably the most difficult because it’s still work in progress. So the definition that I like is that it’s a real evolution of the internet. The internet is now going from us as consumers watching what’s happening, to participating in what they call, being immersed, really getting in there. And for that you need all these new technologies. Roland Palmer: So you’ve got virtual reality, you’ve got augmented reality, you even got mixed realities. All of these technologies we’ve seen in China already, I call them the ingredients of the metaverse. And augmented reality, we’ve seen luxury brands, such as watch brands do a lot of that. Haixia Yu: Gucci. Roland Palmer: Gucci, working on a team or our luxury pavilion and the virtual influencers we’ve seen, now those are influencers who are kind of digital, but they have a huge following amongst young people in China. Now their engagement is three to five times the engagement of a real person. So a real influencer. Roland Palmer: Now, if you take virtual influencers and you take augmented reality, and then the last piece of the puzzle is you yourself, because if it’s about immersive, how are you going to get into the metaverse? And this is where the whole role of avatar comes in. So we’ll see a virtual version of you stepping into the metaverse and it can look like you, or you could choose actually it could look slightly different to you, maybe even a creature, a creature that you like. But that personality, that digital avatar will get in and will start to do the shopping. Roland Palmer: And on the 18th of June this year, we’re launching on Taobao, what we calling the metaverse mall. And this is where everyone can bring their digital avatars, their other person, their virtual self, and start to do 3D shopping. Essentially what we’re doing is experimenting with all of those immersive shopping technologies, which are all part of Web 3. Haixia Yu: Wow, look forward to trying that. Thank you. And changing gear a little bit, in today’s keynote, you also mentioned about online marketplace. So how has the role of the online marketplace changed over the past few years? Roland Palmer: Yeah, so online marketplaces have grown tremendously. If I just look, today we have 1.3 billion annual active consumers. We just hit historic milestone of one billion annual active consumers in China, and then 300 million outside of China. Now, if you look at what’s happening on the marketplaces, most research says it’s here to stay and it’s continuing to grow. So 15% is forecast for the coming years, each 15% growth. So, why are they here to stay? Because they’re great for consumers. There’s a huge amount of choice and there’s value. They’re great for companies because they can reach lots and lots of consumers they wouldn’t otherwise be able to. And what we’re doing at Alibaba is, we’re focusing on a couple of things. Roland Palmer: First of all, we are innovating around the core. So our big platform in China, Taobao, we’ve innovated recently with Taobao deals. And Taobao deals, we get 300 million people involved in that, and 20% of them are totally new to the platform. So, you can innovate and therefore keep providing growth around the core marketplaces. In addition, we have international marketplaces. So we see in Turkey, Trendyol always growing more than 60% year on year, in Lazada in Southeast Asia, the same. And the other pieces obviously are B2B business, the Alibaba.com growing 46% year on year. So all of our marketplaces continue to grow, the whole business of marketplaces continue to grow. And I think it’s definitely a place to be and to join if you haven’t done so already. Team up with us or other players and get on board. Haixia Yu: Sure, thank you. I think it’s enabling a global marketplace for everyone. Thank you. And to wrap up our conversation today, so what is Alibaba’s role in the competitive landscape today and how do you stay ahead? Roland Palmer: So for us to stay ahead, I think first of all, we need to stay key to our mission. Our mission is to make it easy to do business anywhere. Now, how do we do that? First of all, we focusing on high quality consumer base. Now I mentioned we’ve got one billion annual active consumers in China, but of those one billion, there’s 124 million who are spending more than 10,000 RMB. So let’s say $1,500 a year. And I think it’s key for us to keep them engaged, not only the technology that I mentioned, but also all of the categories. So if you see what’s happened during the pandemic, we’ve had a seismic shift towards health supplements towards indoor wear, to- Haixia Yu: Mixed nuts, right? Roland Palmer: Mixed nuts, yeah. Food, essentials, especially for the lockdown cities such as Shanghai and Beijing, our food has absolutely gone through the roof, but also pharmaceutical products. So what we have to do to stay ahead is to make sure that we are really champion at finding the right partners in those categories to ensure that the consumer gets their right products. And then you put all of the technology on top of that and shopping in the metaverse. And then I think, the combination of focusing on the right quality consumer, the right quality infrastructure with our business units, such as our logistics business unit, Cainiao, whether it’s intercity intracity or around the world. And finally, last but not least, in addition to the technology that I mentioned earlier, we’ve also got a great business on Alibaba Cloud. Now that business has innovated beyond standard cloud computing services to offer industry specific solutions. And I think a combination of all of those things is going to ensure that we’re going to stay ahead. Haixia Yu: That’s great. It’s a pleasure talking to you Roland. Roland Palmer: Thank you.