Getting To the Truth About Alibaba:  Three Whoppers and a Good One

Getting To the Truth About Alibaba: Three Whoppers and a Good One

Author: Tompkins International Staff/Wednesday, January 7, 2015/Categories: Blog

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By Jim Tompkins
CEO, Tompkins International

Three of the leading news and business publications recently wrote related stories on Alibaba. Between November 30 and December 22 three articles on Alibaba were published that are just plain wrong. I let the first one pass, I took exception to the second, but now with the third one I just can't hold back.

In brief:

  • On November 30th, a column on China's Cyber Monday fake sales claimed that Alibaba's sales numbers for 11/11/14 were fabricated. The author believes that the Alibaba Singles Day numbers were inflated through a buy and immediately return scheme, and "Outright fakery." The only source in this article is a research assistant at a capital firm and the report cited is nowhere to be found. So, in my view, the sales as reported by Alibaba of $9.3 Billion during China's 11.11 Shopping Festival are accurate and this article is incorrect.
  • In another column, published on December 1st, a lobbying group of big-box retailers said that Alibaba "may decimate local companies unless Congress closes tax loopholes for online retailers." Don't forget: 1) it has been the big-box retailers that have been putting main street retailers out of business, and 2) Alibaba is not a retailer. So, I understand that big-box retailers want to place a tax on internet sales, but to say that Alibaba is putting local companies out of business is just baloney.
  • The one that pushed me over the top was a December 22nd piece on Alibaba's Tmall Global Site. The writer clearly confuses Tmall with Tmall Global. To set the record straight, Tmall is a highly successful website for companies who are registered as a business in China (Chinese and non-Chinese), whereas, Tmall Global is a site for companies who are not registered as a business in China. The article states that Tmall Global "could be a black eye for China's best known internet company." The priority for Alibaba is Tmall. They began Tmall Global as a secondary route to enter the Alibaba ecosystem last February, but they also have other secondary routes through ePass, Borderfree, ShopRunner, and others. Also more than 100 overseas brands are working to set up stores on Tmall Global. Sales on Tmall have soared since being launched. So, Tmall Global is not a black eye for Alibaba, just a lower priority secondary path.

Just before Christmas, a story was published by a host of leading news and business publications that accurately reported on how Alibaba took down 90 million counterfeit products before its IPO. However, several major sources have yet to report on how Alibaba spent more than $160 million in the last two years to fight fakes. So, credit goes to most major publications on this positive story on Alibaba's pursuit of counterfeit products.

My concern with the three inaccurate claims listed above has to do with educating business executives on the importance of globalization, technology, and supply chain. These three megatrends are changing how business works. As a leader of analyzing these trends, I see Alibaba as a critical company to follow and feel it is important to do so accurately. To help executives understand the impacts of Alibaba, you need to see the The Alibaba Effect video. You can count on me to continue to point out the whoppers, the truths, and the stories that are not covered by major publications.


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