David Lloyd, Director, Alibaba Group UK
1. What is the greatest opportunity for your business?
Digital technology is creating something close to a borderless world, opening up new markets and new customer groups for the first time. As an e-commerce company, our biggest opportunity is bringing those new customer groups online and introducing brands to those they’ve never previously been able to reach.
There is a real growth opportunity for e-commerce in rural China. An increasing number of Chinese consumers away from the core urban centres are joining the digital revolution, and this is creating a new target group for retailers. To serve these consumers and the brands that want to reach them, we plan to have opened 100,000 Rural Taobao centres by 2020, bringing e-commerce to 600 million new Chinese consumers.
Foreign brands are beginning to understand how to seize the opportunity a geographically diverse and burgeoning Chinese middle class offers. For almost all the international brands we work with, this is the first time they have been able to effectively reach Chinese consumers. Continuing to help brands access the Chinese market is an enormous opportunity and I feel like we are only at the beginning of that journey.
2. What is the biggest challenge to your business?
The biggest challenge that we currently face is in enabling consumers and partners to understand how Alibaba works and what our e-commerce ecosystem can offer them in delivering a seamless and personalised experience to their customers in China. The common misconception is that Alibaba is just a platform through which people can buy and sell products. Although we do have a fantastic platform that connects millions of buyers and sellers and facilitates trade across the world, there are many other exciting facets to Alibaba. We are a global e-commerce ecosystem comprising a robust logistics infrastructure (Cainiao), payments platform (Alipay), and cloud and data services (Alibaba Cloud).
3. With the benefit of hindsight what would you have done differently so far?
Alibaba offers me the fantastic opportunity to spend a good deal of time in China. My previous role at Google largely kept me in the UK and Ireland, and so the opportunity to get to grips with Chinese culture and doing business there is hugely exciting. But I wish I spoke the language! I’ve just started learning Mandarin from scratch, and I really wish I’d learned it when I was younger.
4. What is the future of the physical store and the high street?
While the dynamics of in-store versus online retail are continually changing, I certainly see digital as an enabler of the physical shopping experience rather than being a direct threat. We are firm believers in omni-channel retailing and we showcased this at our recent 11.11 Global Shopping Festival. In the lead-up, we helped connect 80,000 physical stores to their respective Tmall and Taobao storefronts, making omni-channel shopping simpler for consumers. We also introduced our Buy+ virtual-reality technology into the event for the first time, enabling shoppers to explore digital stores around the world and select apparel and accessories with the help of a 360-degree panoramic view and assistance from a robotic shopping assistant. Gamification was also part of our shopping experience and we developed an augmented reality game that enabled customers to collect discounts at certain high-street restaurants in China, such as KFC. This kind of integration between physical stores and internet retailing will be the key for businesses moving forward, with mobile as the driving force.
At their best, stores and online are perfectly complementary. As a consumer I love the way that Argos can use its store network to enable same day delivery, 7 days a week. It’s a service I use all the time because it makes everything quick and easy.
5. What technology-related plans have you got for the next 12 months?
All our plans are technology-related! We are always exploring new ways of connecting businesses with consumers, and making it easier for businesses to reach new markets. In that respect, launching Alipay in the UK has been a big focus for our affiliated business, ANT Financial Services. Chinese consumers love UK products and the quality they offer. Now, thanks to the introduction of Alipay in-store at British brands such as Harrods, The Body Shop and Holland & Barrett, we are moving even closer to that mission.
The next year is going to be focused on continuing our European expansion, enabling even more UK businesses to reach Chinese consumers – both in the UK and in China – using various types of technology, be it cloud, payments or e-commerce. Cloud is a big focus area for us at the moment – we recently announced the launch of four new data centres across the world, including a co-location with Vodafone in Germany, our very first European data centre.
6. What other retail business do you admire?
Two retailers I love to shop with are Mr Porter and AO.com. Mr Porter makes buying clothes – something I haven’t always loved doing – a real pleasure. The site looks great and is easy to use, and they’re great at recommending brands they know I like – as well as suggesting new brands and items. There’s same and next day delivery, and no fuss returns. They also embraced cross-border from the start, just like we’ve done at Alibaba.
AO.com, meanwhile, is revolutionised buying large home appliances. I think most people found that a chore in the past, but from my first purchase a few years ago, I’ve always found everything about them top-notch. They have an amazing range and great customer service; the site is incredibly informative with tons of videos and reviews; and to top it off, every time I’ve ordered from them the delivery teams have been really friendly and helpful. End-to-end, it’s a great experience to buy from them, and their growth over the last few years has been incredible to see.
7 .If you hadn’t been a retailer what would you have liked to do?
I would probably have become a teacher. I spent a year during my university degree teaching English in France which was hugely rewarding but also challenging. Both of my parents are teachers and I really like the idea of sharing knowledge. This is one of the attractions of working for a digital company and I’ve quickly learnt that the desire to share information runs right through the heart of Alibaba, perhaps based on the fact that founder Jack Ma started out as a teacher himself.
8. Who would you place in the Top 25 Multi-channel/e-commerce Movers & Shakers?
I’d say Nitin Passi from Missguided. He’s a genuinely nice guy who’s built a very cool, £150 million pure-play fashion business more or less from scratch; now that he’s moving into stores both in the UK and the US, he’s showing that you can start in online and move into omni-channel, and you can do so internationally.