Jack Ma, Alibaba, and the New Global Market

Reading the news recently, I saw that Alibaba broke its own record for one-day sales by doing over $14 billion in sales on Singles Day, China’s, and therefore the world’s, biggest online shopping day. By comparison, the U.S. version, Cyber Monday, netted around $2 billion last year. It’s not missing some decimal places. Singles Day sales were nearly seven times larger.

But that’s not what really struck me about Singles Day or Alibaba. The revenue is staggering, yes, but what’s more critical, for me, is the realization of how operating in the global space is no longer a luxury for American organizations – it has become essential.

Jack Ma, Alibaba’s founder, clearly understood the necessity of going global when he visited the U.S. in 1995 and was determined to bring online business to China. And, he succeeded by bringing American goods to Chinese consumers.

Rather than wait for a U.S. retailer to break into the market, Ma used his savvy understanding of China’s culture to create a better service for Chinese consumers than the bigger, but less adaptable, eBay, which went into China using its standard U.S. model just over 10 years ago. Soon enough, he outsmarted eBay at its own game, and the American online giant learned a big lesson in its miscalculation of the local market. (eBay shut down its Chinese site in 2007.) Now, Ma is looking to influence American consumers with his online retailing model.

Ma’s, and Alibaba’s, success is a great primer in how the old “analog” rules no longer apply in today’s digital world: You can’t take the concepts that worked in the West and just push them into every market and expect success. We are all connected to each other, and the smart operators realize that to succeed in the digital future that they not only need to work with global and local teammates, vendors and customers, they need to understand those cultures. People have said for some time that “America’s greatest export may be its popular culture,” but we have to recognize why, and how, our global customers will use it. Ma came to the U.S. to get his inspiration, but he used his innate knowledge of Chinese culture to adapt it into a model that works for China. American companies can learn from this.

This doesn’t just apply to retailers, either. Most organizations – which means practically every organization – have to operate globally nowadays. Whether you’re opening an office in Caracas, Tokyo or London, you can’t just pick up your best American performers, drop them in a new city and expect them to hit the ground running. You need local partners to help you navigate the differences in culture, language and geography. Your product or service is only as valuable as your ability to sell it to those around you. And you will be far more successful if you have a team that speaks the vernacular.

Of course, relying solely on a local team is not necessarily a path to success, either. A good team is a diverse team – and not just diverse in a “United Colors of Bennetton” way. I mean diverse in talents, strengths and, most importantly, perspectives. Because the closer you can get your team to a 360-degree view of your offering, the more likely you are to not only finding a winning formula but also to finding your potential pitfalls.

Culture is a difficult thing to discuss because, by its very nature, it means different things to different people. To paraphrase former Supreme Court Justice Potter Stewart, we may not be able to adequately define “local culture,” but we “know it when we see it.” And the organizations that approach the new globalization as a partnership, as a way to work together and bridge those cultural gaps, are the ones that will be well positioned to sustain themselves in the new, global market.

This article first appeared on Keith’s Linkedin blog. To get the latest from Keith, follow him on Facebook, Twitter, and YouTube.

Image of Jack Ma courtesy of World Economic Forum/Flickr

Keith Ferrazzi

Keith Ferrazzi

Chairman

New York Times best-selling author, speaker

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