Alibaba Cutting Out The Middle Man?

[AgainstAllOdds]

Hey guys.

So I got this email from Alibaba a week or so ago:

Dear {My Name},

This is Xenia from Alibaba User Research Team. I am glad to tell you that there is a user research project available in the following weeks and we are inviting you to shape the project together with us.


In this project, we hope you can conduct an interview with us, letting us know how you normally do business with suppliers and your feedback on Alibaba.com. It will last for about 1.5 hours. As a token of appreciation of your time, you will receive a US $150 Amazon gift card after the interview.​

I don't really import anything, but have always done research by posting on Alibaba to get a feel for different costs.

I also stay up late, so thought "Screw it. I'll sign up for the interview, and if I don't like it, I'll just quit." I signed up, and forgot about the interview until an hour ago.

And then I got a call on Skype. I felt bad since I forgot about the interview, and thought "Huh, there's other things I rather do, but let's start this interview. I'll just tell her about my friend's business, not give away too many key details, and see where this goes. After all, I am the jerk that offered to be interviewed."

And then she started asking questions.

Very specific questions.

• What do you import exactly?
• What's your company name?
• What's the website?
• Can I look it up?
• Tell me who you sell to.
• Tell me how you get your customers.
• Do you have a physical location?

And so I started telling her. And within a few minutes I wondered: "Where are the Alibaba related questions?"

And then I started thinking some more.

And I remembered my friend talking about the future of Amazon. How Amazon is already sourcing products itself and cutting out the middleman. How in the future, Amazon will own the markets.

An that's when it hit me!

"Why the F*ck are they offering $150 for 'market research', and not asking any questions about how I find suppliers? Isn't that what Alibaba does?"

So I flat out asked ...

"Hey, sorry if this sounds weird ... but why are you asking me these questions? Are you trying to take Amazon's model of cutting out the middleman and steal my business? Are you interviewing me so that you can take what's mine?"

And then the call went quiet. Dead F*cking quiet.

And then I came here.

 

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[Berters]

Damn. That's a bit shit.

 

[Walter Hay]

It is almost certain that you have been contacted by someone using fake Alibaba contact emails. Such questions are far too intrusive to be a genuine Alibaba survey.

As a matter of interest, Alibaba's feedback system has been questioned by China's State Administration for Industry & Commerce. For a long time I have known how corrupt the feedback system is and I have posted warnings about relying on feedback, not only on Alibaba, but on most Chinese B2B sites. I plan on posting a detailed report soon on my AMA thread dealing with the latest revelations about Alibaba's troubles with the SAIC.

 

[RazorCut]

"Hey, sorry if this sounds weird ... but why are you asking me these questions? Are you trying to take Amazon's model of cutting out the middleman and steal my business? Are you interviewing me so that you can take what's mine?"

And then the call went quiet. Dead F*cking quiet.

Don't go spending that Amazon gift voucher just yet.

For a long time I have known how corrupt the feedback system is and I have posted warnings about relying on feedback, not only on Alibaba, but on most Chinese B2B sites.

It's not just Alibaba and China though is it. People have been gaming Amazon's feedback for years and I always take all website customer references with a sack of salt.

 

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[Ecom man]

My guess is the email was never from Alibaba and neither was the person you were talking to. Click on the name in the email you received and I would bet money that it is either a slightly different spelling of alibaba or a completely different email. Sounds like someone is doing some market research the slimy way. They want to know how and where to get products, who to sell them to, and how to get customers. Sounds like someone is looking to start a business and wants a step by step on how to do it from other people's experience.

 

[jazb]

Wasn't Alibaba.

But lets be honest, its only a matter of time before China starts setting up/using fulfillment centres....learning our copy then cutting all of us out!

 

[DrkSide]

But lets be honest, its only a matter of time before China starts setting up/using fulfillment centres....learning our copy then cutting all of us out!

They are already doing this. However, from the attempts and feedback that I have seen there is one thing that they can't compete on at the moment and that is customer service. That alone separates my company from 90% of my competitors both foreign and domestic.

 

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[Walter Hay]

Don't go spending that Amazon gift voucher just yet.

It's not just Alibaba and China though is it. People have been gaming Amazon's feedback for years and I always take all website customer references with a sack of salt.

@RazorCut is quite right. Sellers on Amazon and eBay have been gaming the feedback system for years. Add to that the fake review sites that are affiliate sites in disguise, and feedback is not worth the bandwidth it uses up.

I am one of the very rare individuals who declare that originals of testimonials on my site and in my posts are on file and available for checking by fair trading authorities, but there is no doubt that a lot of the feedback, reviews, and testimonials that I see published are provided by friends, relatives, or professional reviewers.

They are already doing this. However, from the attempts and feedback that I have seen there is one thing that they can't compete on at the moment and that is customer service. That alone separates my company from 90% of my competitors both foreign and domestic.

@DrkSide has a good point, and any Chinese competition just might encourage sellers in the west to sharpen up and learn the benefits of giving good service. I started importing from China because I needed better quality and better service than I had been getting from local manufacturers. If sellers in the west don't provide good value and good service, buyers will accept what Chinese sellers offer at a much lower price.

By the way I mentioned in my post above that I intended posting a detailed report on China's consumer watchdog's revelations about Alibaba. Here it is: Sharing my lifetime experience in export/import. Product sourcing specialist.

 

[edward222]

Wondering how the interview goes if you didn't answer those questions, and asked
this question in the first place:

"Hey, sorry if this sounds weird ... but why are you asking me these questions? Are you trying to take Amazon's model of cutting out the middleman and steal my business? Are you interviewing me so that you can take what's mine?"

 

[xmartel]

Wasn't Alibaba.

But lets be honest, its only a matter of time before China starts setting up/using fulfillment centres....learning our copy then cutting all of us out!

Just to add to this idea. I believe it is happening.

Just South of Saskatoon a company purchased a quarter of land to build a large mall complex on. It's a Chinese company. The idea is Chinese companies purchase a space at this mall to directly showcase their products and there is warehouse space attached. So instead of people from North America having to travel to China to source products and meet suppliers, they can just come here now.

Why did they choose this location of all that was available? I'm still not totally sure, but they say it was because of the cheap land, nearby international airport, and a rail line right near the land.

To us locals it still seemed out there that they'd build this here. But the land is purchsed and signs are up.

And then to top it off I started hearing rumors that the CEO of Alibaba was building a home here in Saskatoon. There was no doubt someone very wealthy was. The home is over 17,000 sq ft and somewhere in the neighourhood of $17million. Easily taking first place in Saskatchewan for largest, most expensive home. It's still being built and I've been by it a number of times to check on progress.

A few more rumors surfaced from people unrelated to each other saying the same thing, and that it had something to do with the mall that's supposed to be built South of here.

And then I got confirmation from one of my subs that's doing work on the home. He personally met the CEO of Alibaba. It is his home.

Why would he build here of all places? It doesn't make sense unless there was something financially to gain. He isn't here for the sites. And his home in resale won't make him back 1/3 of what he's putting into it.

Guys like him aren't the type to piss away money, and more importantly time, on setting up a base here if the mall wasn't going to happen.

Here's the website for the mall.
http://www.nadiec.com/

 

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[Walter Hay]

Just to add to this idea. I believe it is happening.

Just South of Saskatoon a company purchased a quarter of land to build a large mall complex on. It's a Chinese company. The idea is Chinese companies purchase a space at this mall to directly showcase their products and there is warehouse space attached. So instead of people from North America having to travel to China to source products and meet suppliers, they can just come here now.

Why did they choose this location of all that was available? I'm still not totally sure, but they say it was because of the cheap land, nearby international airport, and a rail line right near the land.

To us locals it still seemed out there that they'd build this here. But the land is purchsed and signs are up.

And then to top it off I started hearing rumors that the CEO of Alibaba was building a home here in Saskatoon. There was no doubt someone very wealthy was. The home is over 17,000 sq ft and somewhere in the neighourhood of $17million. Easily taking first place in Saskatchewan for largest, most expensive home. It's still being built and I've been by it a number of times to check on progress.

A few more rumors surfaced from people unrelated to each other saying the same thing, and that it had something to do with the mall that's supposed to be built South of here.

And then I got confirmation from one of my subs that's doing work on the home. He personally met the CEO of Alibaba. It is his home.

Why would he build here of all places? It doesn't make sense unless there was something financially to gain. He isn't here for the sites. And his home in resale won't make him back 1/3 of what he's putting into it.

Guys like him aren't the type to piss away money, and more importantly time, on setting up a base here if the mall wasn't going to happen.

Here's the website for the mall.
http://www.nadiec.com/

This is a very large scale and more sophisticated version of what many Chinese companies have been doing for years. For a long time Canada has been a favorite place for setting up branches of Chinese businesses and competing directly with their former distributors or reseller customers.

It has also happened a lot in other western countries, and I saw it begin in the 90's in the UK, Australia, and the USA as well as Canada. In many cases they failed, because they lacked the Western mindset, and could sell only on price.

This operation is different, not only being supported by the Canadian and Saskatchewan governments, but the Chinese owners have also enlisted the aid of locals who help present the whole thing in a Western way.

The mall will be very much like a permanent exhibition center, but with a lot of supporting infrastructure, both economic and physical. The nearest equivalent I know of in China is the vast Yiwu Markets. A permanent exhibition comprising about seven floors of showrooms has also operated for many years in the Taipei World Trade Center.

While there may be hundreds of suppliers permanently exhibiting at Dundurn in Saskatchewan, that is only a drop in the ocean considering the millions of businesses in China. Many of them will be traders, and who knows how many will compete with their North American wholesale customers. It is certainly the intention to attract retail buyers.

They will undoubtedly take a big market share, with the biggest losers probably being importers who act as wholesalers, but those who sell retail will suffer less provided they learn to do it better than many are doing now. Real, old-fashioned service, and a generous attitude towards complaints and returns will help weather the storm.

While I am not an online marketing expert, (I only sold B2B) I can tell you that my success in the 2 big businesses that I started from scratch was due to providing:

• Quality. i.e. Value for money.
  
• Service that exceeded expectations.
  
• "The customer is always right" attitude.
  
• No quibble returns, even when I had supplied precisely what the customer ordered, and it was faultless.
• Superior marketing. (B2B)

Walter

 

[Bouncing Soul]

It has also happened a lot in other western countries, and I saw it begin in the 90's in the UK, Australia, and the USA as well as Canada. In many cases they failed, because they lacked the Western mindset, and could sell only on price.

This operation is different, not only being supported by the Canadian and Saskatchewan governments, but the Chinese owners have also enlisted the aid of locals who help present the whole thing in a Western way.

The mall will be very much like a permanent exhibition center, but with a lot of supporting infrastructure, both economic and physical. The nearest equivalent I know of in China is the vast Yiwu Markets. A permanent exhibition comprising about seven floors of showrooms has also operated for many years in the Taipei World Trade Center....

Big news in my corner of the world for the motorsports community was the purchase of Miller Motorsports Park by a Chinese company, Geely. They bought it to try and copy the culture of an American racing facility.

Wilson said Miller Motorsports Park will serve as a campus for drivers, mechanics and track personnel who work for Geely — or aspire to work in China's emerging automotive racing industry.

"This is the ideal place for us to train people," said Wilson.

Along with operating the track, plans for the new Miller Motorsports Park include a hotel-like residence for those being mentored in Utah, as well as an oval test track and a drag strip.

http://www.sltrib.com/news/2852778-155/chinese-company-buys-tooeles-miller-motorsports

 

[jazb]

I wouldn't worry about it for now. a long way to go. if anything it probably makes it better for fastlaners because of the barriers it sets up for newbs.

 

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[Walter Hay]

Here's an update on the proposed Dundurn International Exhibition Center.

As of Feb this year, the company hasn't purchased all of the land, a different company has bought some of the land earmarked for the mall, and some local politicians say the project is "dead in pretty much everybody's eyes".

Walter