Great record sales for Alibaba and yet investors don’t seem to be impressed. The stock actually fell and Baird now saying that sales saw a meaningful deceleration from 2018 levels. What’s your take?
It’s definitely a deceleration compared to previous years, but the key is that if you look at the growth since they started pushing on Singles Day, it’s absolutely incredible.
We shouldn’t be too impressed with the dollars, the big story here is the data: how they’re able to do it and when you look on comparison – when you look at the number of people that Alibaba shoppers have and you compare that to the US population, Prime Day and Black Friday it is actually not that far behind. The numbers with Alibaba are much much larger, but there’s so many more people.
The big story here is the data and what happens with the data for retailers in the US.
I’m curious when you talk about that data. Give us a sense of why that’s so valuable to Alibaba especially in the growing field here of e-commerce players. What does that kind of data give them that someone like an Amazon for example might not get through prime or do they get that through Prime Day?
They do get it through Prime Day. The key here is understanding how that data has an impact for advertisers. There’s a lot of advertisers here in the US and a lot of big companies that traditionally don’t have access to that data. For example, CPG companies – like a cleaner
or soap company – they don’t have access to that data and advertisers are finally waking up and that’s why you’re seeing that a lot of advertisers are now jumping onboard and realizing that in
order to get that data they need to have a relationship with the consumer.
If you look at Tide for example – they have gone and started acquiring cleaners around the country so they can actually have that ‘one-to-one’ relationship.
For a lot of people in this country, their local cleaner is now called Tide Cleaners.
The other side to that data and why it’s so important, is that consumers today want a curated
experience. Consumers don’t want to just walk into a mall and have everything that’s for sale there and that’s why we’ve seen companies like Stitch Fix start to explode like crazy.
This idea that you can get exactly what fits you, exactly what you need, what’s made for you, to come to your home every single month – that’s what consumers today want and that’s where retailers really seem to kind of miss the message.
If you walk into a mall today – you’re really walking into a graveyard of brands that have not
caught up and are not taking advantage and looking forward with business intelligence.
When it comes to Alibaba though, there’s always some questions about what the Single’s Day sale means for their bottom line. There has been some accounting scrutiny over Alibaba here in the US, so what do we know about how much this actually contributes to their business?
That’s a great question – because at the end of the day in order to get that many consumers to purchase that large number of goods, there’s a lot of deep discounting that goes on. Across the world, consumers all still want one thing – they want a huge bargain and that’s why sales are so big. That’s a big question that we’re not going to find out today in terms of what it’s going to impact their bottom line – but believe me there’s a lot of discounting that went on there.
You talked a lot about making sure that this experience for consumers is moving towards this idea of being personalized. How do you kind of align that with what we’re seeing from social platforms like an Instagram or a Pinterest that’s trying to be both spontaneous and also personalized at the same time?
Social platforms are a whole different aspect in terms of data. The big problem that these platforms have is they can personalize as much as they want but they’re not actually selling anything so they’re missing that link between commerce. Think about it in terms of Facebook – the only thing they’re selling are ads. They’re really just selling your information. Google
themselves are also not selling anything at all – all they’re selling is your information. They’re missing that link that Amazon actually has.
Amazon is in an amazing and powerful situation because not only do they have that data, not only
are they selling ads, but they also have goods that they’re able to sell.
It wouldn’t surprise me when you start to look at Facebook and Google with the amount of cash they have, that they would be looking to make an acquisition for some shopping platform. They need to have a direct connection to commerce in order to really take full advantage of all the data they have.
How are we expecting the Singles Day performance to help when it comes to that Hong Kong IPO share sale of 15 billion dollars that could come any day now for Alibaba?
Investors should be somewhat impressed with those numbers. They probably aren’t that impressed that the growth wasn’t as high as the years before, but I think what’s going to be interesting more than even what happens with Alibaba is how does this impressive number with Singles Day – what does it do for the economy here in the US and what what’s going to happen in Q4 as we move towards the shopping season here?
Are we gonna see a 25 percent jump? We should.
If we don’t see as much of a jump what that tells us is that Alibaba is really taking better advantage of their data than the retailers here in the US.
It’s all about that data and analytics and Jeff thank you so much. That was Jeff Greenfield joining us from C3 Metrics. This is Bloomberg.