Leadership

Three lessons for entrepreneurs from inside Alibaba's Taobao University

Jack Ma, executive chairman of Alibaba Group Holding Ltd., receives an honorary degree from the University of Hong Kong
Bloomberg | Getty
Jack Ma, executive chairman of Alibaba Group Holding Ltd., receives an honorary degree from the University of Hong Kong

When it comes to business advice, there are few people better placed to bestow their wisdom than Jack Ma, the billionaire founder of Chinese e-commerce giant Alibaba.

Good job, then, that he set up a university to share tips on the meteoric rise of one of the group's leading companies, Taobao.

Situated in Hangzhou, China, Taobao University is made up of a faculty of senior management from the online marketplace and offers lectures on building a digital business.

CNBC Make It met one woman who attended the university. She said it revealed just how far ahead the company is in its e-commerce strategy and the insights it holds on its almost 600 million monthly active users.

"I was there a week and I learned so much," said Genecia Alluora, who is founder of Soul Rich Woman, an advice platform for female entrepreneurs across Southeast Asia.

"They are really educating China and Southeast Asia about what it means to be digital today," she said, citing the company's expertise in consumer psychology and behavioral patterns.

"We're still very Western in our strategy: we need to tie together Eastern and Western strategies."

Thirty-five-year-old Alluora was selected to attend the university as part of an e-commerce program led by Singapore's Nanyang Polytechnic. Typically, students of the university are Taobao merchants or aspiring entrepreneurs, who attend courses of anywhere between a few weeks and months.

Here are her three key takeaways.

1. It's all about creating the brand

Online retail may seem like a more anonymized version of the brick and mortar stores of old. But as the e-commerce market grows, it's becoming increasingly important to have a brand that consumers can identify with.

"People no longer buy immediately," explained Alluora, highlighting the growing tendency for consumers to look to social media for reviews before making purchases.

"Customers want to be familiar with the brand and see that you have credibility," she said. "These days, that's more than just having a Facebook page, it's about knowing how to promote yourself more broadly."

2. Then you need to market it

Once you've created your brand, it's all about promoting it to the right people. That may seem obvious, but as technology evolves it's about understanding how you can use it to help you.

"To boost yourself to the top, you need to generate traffic," said Alluora. The best way to do that is to focus on digital strategies like prioritizing keywords in your product description.

The image is also important, Alluora noted: "You need to sell the lifestyle, not just the product. You need to connect emotionally."

3. Data analytics is crucial

To maintain momentum and generate repeat sales, you need to know your customer. That means having access to customer data.

Given Alibaba's dominance in China — its online payment system, Alipay, accounted for more than half of the country's digital payments in 2017 — the company boasts one of the world's most sophisticated data sets.

Alluora said that the company claims to have some 4,000 metrics on each user. When contacted by CNBC, Alibaba said it could not confirm that number, but it referred to a popular Chinese phrase — "thousands of people, thousands of faces" — which implies that data levels vary from customer to customer.

"They have very detailed analytics so they can tailor their offering to each individual," noted Alluora. "If you're looking for baby stuff, for example, the following year they will target you with clothes for one-year-olds."

Nearly 500 heads from different counties across China attend the first anniversary of Taobao University's Electronic Commerce Class for county heads
VCG | Getty
Nearly 500 heads from different counties across China attend the first anniversary of Taobao University's Electronic Commerce Class for county heads

Alluora said the experience had prompted her to alter the advice she gives other entrepreneurs.

"I learned some of women's shortcomings," said Alluora. "E-commerce has evolved massively and a lot of women are still using traditional methods," she continued, noting that many of her clients in Southeast Asia still rely primarily on offline techniques for marketing and sales.

"We're planning now to reorganize Soul Rich Woman's content to help educate our entrepreneurs."

Alibaba's Ma, himself a former English teacher, has long been an advocate of improving education for the next generation.

In 2017, local media announced that Taobao is to launch its first elementary school in Xinjiang to get children familiar with the online world. Then, earlier this year he called on other entrepreneurs to join his efforts and invest in China's rural schools.

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