No Olé’s yet at Alibaba
Chinese consumers keen to buy Mexican goods, but more firms need to join the fiesta
Mexico’s deal with China’s biggest e-commerce company, Alibaba, to increase online business for exports such as avocados and tequila, needs the participation of dozens more companies to make it successful, says an official at Mexican trade group Promexico.
So far 24 companies have been approved to export to businesses in China and other countries as paying members on business-to-business platform Alibaba.com, Carlos Alvarez, a project co-ordinator at government trade and investment group Promexico, told Reuters this week. Alibaba is waiting for 100 Mexican vendors to join before launching a country-specific site known as a "pavilion" on its wholesale platform that would showcase Mexican products on a single web page, Alvarez said.
The Mexican government signed a deal with Alibaba in September 2017 to help small and midsized businesses enter Mexico’s nascent e-commerce industry alongside megaplayers such as Wal-Mart de Mexico and Amazon Inc.
Alibaba said in a statement that it was committed to "helping them participate in global trade through e-commerce and the use of technology". Part of Promexico’s task is convincing companies that gaining access to Alibaba is worth taking on complex logistics and high shipping and insurance costs, Alvarez said.
"They’re scared of coming because it’s expensive. But once they’re there, they can take off," he said.
Unfamiliarity among Mexican businesses with Alibaba’s wholesale platform or e-commerce in general, and seller membership costs, have been other barriers, Alibaba said.
Alibaba offered a half-price promotion from November 2017 to March 2018, putting the annual cost at $1,500 a year, Alvarez said. Promexico is negotiating with Alibaba to renew the promotion.
A web page dedicated to Mexico would be Alibaba’s first to focus on Latin America and would join pages for 17 other countries, including the US, India and Japan.
"They want the Mexico pavilion because they know that Mexico has products of quality, and products that distinguish it," Alvarez said, naming cowboy boots, tequila and mezcal liquors, cactus cooking ingredients and avocado-based cosmetics and soaps as examples of high-demand items in China.
Just as coveted are avocados that can be wrapped with bows and given as gifts, Alvarez said.
Companies on board include home goods business Vianney, sugar producer Panelami, shoemaker Altura Siete and coffee farm Argovia.
Grupo Evans, which sells industrial equipment such as electric generators and water pumps, was approved but decided to hold off until gathering more internal resources to handle greater sales volume it expects from new markets.
"We needed a bit of preparation," said Ana Goytia Martinez, Evans head of digital marketing. "But we’re looking for new markets and we think with e-commerce we can reach them."
Alibaba reported its strongest yet quarterly revenue growth on Thursday, partially boosted by an increase in paying members on its wholesale platform.