Alibaba: Going Where Amazon Has Not Gone

  • 2019-08-15
  • Medium

If you were to ask people who live outside China if the Chinese economy is competitive, most people will likely say no. As evidence, they would point towards state-owned enterprises and high barriers to entry for multinational organizations. However, the Groupon story is a perfect illustration of the contrary. When Groupon launched in the US around 2008, entrepreneurs across China saw an opportunity to build the next multi-billion dollar business. By the time Groupon IPO-ed in 2011, there were already over 5,000 different companies in China with similar business models.

Today, I want to talk about one such war — the war to bring the 6.8 million mom-and-pop convenience stores around China into the digital era.

These mom-and-pop convenience stores offer products that are not too different from your local gasoline stations in America. However, besides refrigerators and freezers, many stores do not have much technology.

Historically, brands have a hard time breaking through to third and fourth tier cities in China. Brands want to be able to develop consumer habits as people become richer. However, now with a platform connecting the two parties, brands can now communicate with mom-and-pop shops and provide them directly with promotions or customized products.