Branding Lessons From China's Alibaba
When it comes to establishing strong international brands, Chinese companies are struggling to crack the code. Three of the top five smartphone makers globally are Chinese, yet how many Western consumers can name one? (Cheat sheet: They're Huawei, Lenovo and Xiaomi, according to Strategy Analytics shipment data for the second quarter of 2014.)
Stronger branding would help with Chinese consumers too, as competition is cutthroat among local brands vying for the attention of the country's 1.36 billion population.
Chinese e-commerce giant Alibaba, already uber-famous at home, is becoming more well-known abroad too, partly thanks to the publicity blast surrounding its record $25 billion initial public offering in New York last week.
Alibaba isn't a household name outside China yet. But it's building its global brand fast, well before most foreign consumers actually buy something from one of its platforms. And in many ways it's already doing better than Chinese companies that make electronics and appliances, products that global consumers might already have in their homes. Here's a look at what other Chinese brands can learn from it.
It helps to have a charismatic leader
Company founder Jack Ma isn't your typical exec in a suit: He once wore a nose ring, dark lipstick and a long blond wig to an Alibaba rally, singing "Can You Feel the Love Tonight?" An English teacher-turned-tech entrepreneur, he dreamed big, daring to take on eBay in China, and people called him "Crazy Jack." Today, the company he built is worth more than Amazon and eBay combined. EBay shut its China site long ago. And Mr. Ma is China's richest man.
"A lot of people look at him and say, 'he's Steve Jobs reincarnated, he's got so much personal charisma," said John Holton, Asia partner with branding strategy agency Prophet.
That charisma has helped build trust with foreign investors, and within his company too, Mr. Holton said.
"There are a bunch of people inside the organization who will do anything for Jack Ma, and that has translated into an amazing experience for customers and consumers," he said.
Mr. Ma stepped down as CEO last year, though he remains executive chairman. If Mr. Ma ever decides to leave, that will be a big challenge for the brand, Mr. Holton said.
Cultivate the brand's story
Most Chinese brands stick to corporate-speak when telling their story, but Alibaba weaves a tale as compelling as that of any Silicon Valley tech giant. News stories tend to mention that Mr. Ma and his co-founders started Alibaba in his living room in the city of Hangzhou in 1999. Mr. Ma often highlights the company's modest beginnings, recalling how he once tried to drum up money from Silicon Valley venture capitalists and came away empty-handed. And he mentions how the founders had no powerful relatives to help them succeed in China, where guanxi, or connections, rule.
Think global from the start
Look at the names of some of China's top brands – non Chinese-speakers are baffled by how to pronounce Huawei (telecoms), Haier (appliances) and Tsingtao (beer.)
Mr. Ma chose the name Alibaba "because it is well-known around the world and it can be easily pronounced in many languages," the company's website says. Ali Baba, a character from "One Thousand and One Nights," used the term "open sesame" to enter a cave filled with treasure -- just as Alibaba the company can "open a doorway to fortune for small businesses," the website says.
Mr. Ma also speaks fluent English, something that helped him reach out to Western media and has reassured investors. That recognition abroad has impressed people inside China too.
Making money isn't enough
"CEOs in Asia continue to be almost entirely motivated by one thing only: the need to 'make money,'" said Joseph Baladi, head of consulting at the Leo Burnett Institute of Behavior in Singapore, who is also working on a book about Chinese brands.
Mr. Baladi said that "making money" was the common response when he interviewed more than 100 CEOs and CMOs from Asian companies and asked about the purpose of their business. He argues that Asia's business leaders need to be more ambitious about their company's goals -- as Mr. Ma has been.
Mr. Ma, by creating his B-to-B and B-to-C e-commerce empire, was "able to recognize and harness the momentum created by global business growth with a business model that exploits a fundamental human need: to connect," Mr. Baladi wrote in an email.
He called Mr. Ma a "quintessential visionary – a key and important trait other Asian business leaders would do well to take note of."