In this episode of The Negotiation, we speak with Rick Watson, CEO, and Founder of RMW Commerce Consulting, a strategic commerce consulting company based in NY. We kick things off talking about the difference between Alibaba and TMall, a difference Rick refers to as eyes open vs eyes closed, a reference you’ll soon understand. We talk at length about the differences between Amazon and the Chinese platforms, getting into how Amazon could learn a thing or two from Alibaba or JD in improving its product selection and whether or not Alibaba or JD would ever start their own white-label brands of products similar to Amazon Basics. We talk about how different sectors work well or not in the different markets like apparel, luxury or cosmetics, and we discuss some of the other up-and-coming platforms that are making their marks in the Western world of eCommerce. We also dive into the future of eCommerce, discussing the potential or lack thereof for the Asian platforms to band together or stay independent, and whether social commerce will ever take hold in America as it has in APAC. Enjoy!
Today on The Negotiation, Todd speaks with Rick Watson, founder, and CEO at RMW Commerce Consulting. With over 20 years of experience in the eCommerce industry, Rick shares his thoughts on industry giants in China and the U.S.
Asked how different Alibaba is from Amazon, Rick starts off by addressing the Western notion that these two eCommerce companies essentially share the same business model—the only difference being that they were founded in different countries. It is inaccurate to assume that Alibaba is simply “China’s Amazon”. Relating Alibaba to the West, he refers to the company as a combination of Facebook, Google, and Amazon. Even then, this would only be an approximation of Alibaba’s true scale.
Not only is Alibaba a more “expansive” e-commerce company than Amazon, but it is also “pure to the marketplace model as opposed to Amazon who is developing its own products and buying inventory.” Alibaba considers it a huge risk to buy inventory. The fact is that third-party sellers are taking home more profit than the platform provided to them by Amazon—a fact acknowledged by Jeff Bezos himself.
Different eCommerce platforms offer different experiences for both buyers and sellers. Customers need to be particularly cautious on Alibaba as buyer protections are said to be lacking. Tmall is described as the “eyes closed experience” since there is very little chance of being defrauded on the platform. You are also expected to invest in your brand on Tmall. On the other hand, sellers on Amazon are basically “paying rent” to host their products on the platform, which means that you are Amazon’s customer, not the seller’s.
“You are replaceable.” This is an unspoken motto that Amazon abides by. Since Amazon sellers have few options in the way of marketing, their products may be buried by the search engine, which is wholly influenced by customer activity at any point in time. “Sellers are lucky to be there, at the blessing and bidding of Amazon,” says Rick.
What is The Negotiation?
Despite being the world’s most potent economic area, Asia can be one of the most challenging regions to navigate and manage well for foreign brands. However, plenty of positive stories exist and more are emerging every day as brands start to see success in engaging and deploying appropriate market growth strategies – with the help of specialists.
The Negotiation is an interview show that showcases those hard-to-find success stories and chats with the incredible leaders behind them, teasing out the nuances and digging into the details that can make market growth in APAC a winning proposition.