Live Issue... Alibaba looks overseas as competition builds

Not so long ago, the idea of a Chinese internet brand advertising in the US around high-profile coverage of a presidential election would have seemed far-fetched. But last month that is exactly what happened, as e-commerce giant Alibaba embarked on a US$30 million international campaign to bolster its brand in 20 key markets during the slowdown.

The bold campaign, which will primarily target Australia, Europe, Hong Kong, the UK and the US, could make Alibaba China’s first internet company to extend from a national to an international brand.

Alibaba, founded in 1999 by Jack Ma (pictured) and backed by Yahoo, plans to achieve this using online, television, print, radio and outdoor elements as well as live events. The campaign launched on major US news channels around election coverage and will extend online. As one company spokeswoman put it, internet users “from Russia to Vietnam” will see banners on Google, Yahoo, MSN, Ask.com, Facebook and other localised sites.

The timing is significant. The global economic slowdown could impact Western demand for Chinese-made goods, which is a key driver for Alibaba’s B2B commerce platform.

However, Lawrence Wan, general manager of OMG Digital in China, which handles Alibaba’s media account, argues that the demand for cheap goods all over the world could increase. That view is shared by Alibaba. “We see the current difficult environment as a chance to strengthen our market leadership position and attract more users to our global import and export marketplace,” says a spokeswoman.

It is also significant because Alibaba is being challenged for the first time at home. Recent months have seen a growing rivalry between the company and search giant Baidu, one of China’s other major home-grown internet players. Baidu has launched a consumer-focused e-commerce service to rival Alibaba’s Taobao site, and recent reports in China suggest it is planning a B2B platform to compete with Alibaba’s core service. Alibaba has responded by blocking Baidu from conducting searches on its sites and cancelled its search ad contract with Baidu.

“I’m a firm believer in securing one’s base at home and for most companies, I’d ask if there is really a need for this bridge into the global spotlight while there’s still a job to defend home turf,” says David Wolf, CEO of Wolf Group Asia.

The question Alibaba faces, then, is whether its $30 million will allow it to make the leap to become an international brand. Most of the investment will be spent with Alibaba’s in-house advertising department, which has traditionally handled Alibaba’s marketing domestically. While some observers say Alibaba assigning its creative duties to an in-house team is a gamble, Devin Beringer, relationship marketing director at TBWA in China and the customer management director for Alibaba until a year ago, said this is just part of Alibaba’s style.

“In the past, it has hired high-quality creatives from international brands for its in-house team and I can’t imagine these guys wouldn’t pay attention to every detail of this global campaign,” he says. “ I know it’s always been difficult for them to find an agency that understands Alibaba. Speaking to small-business people across the world is tough and it’s a difficult group of people to talk to. Alibaba gets this.”

Yet a word of warning is sounded by Rodion Yudasin, senior digital strategist at Wieden & Kennedy Shanghai, who arguesthat Alibaba needs to be careful about the type of message it sends out.”

“There is a misperception among Western audiences that a Chinese company will come and take over the world,” she says. “It’s very sensitive right now.”

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