Barry Li’s Q&A session at the Australia-China E-commerce Forum

Event background

This forum, jointly run by Macquarie University and the Chinese Academy of Social Sciences (CASS), aims to provide a platform for industry practitioners, and Australian and Chinese academic scholars, and to demonstrate thought leadership through the mutual exchange of innovative ideas and practical recommendations for the future of trade between China and Australia.

The forum will examine contemporary issues related to international trade and e-commerce in view of the impact of technology and global geopolitical developments. A series of topics will be covered, including: environment finance and professional services in free-trade areas, international business relations between Australia and China, blockchain technology, accounting and finance for cross-border e-commerce, international logistics and supply chain management, and other interdisciplinary themes.

Questions for panel 2 (Micro) for Jonathan Wang (Alibaba) and Barry Li (Author)
1. In analysing the use of e-commerce platforms for cross-border purchase, 84% of consumers used domestic e-commerce platform. Judging from the massive amount of tourists, and also the development of in-house platforms, how do you see the trend of C2C, or Daigou, in cross-border e-commerce? Will it affect the more traditional B2C purchases? (both)

Barry Li: first, I found it is fascinating that we are discussing “e-commerce” here today. When I first heard this concept, it was in 2000 when I started university. Back then, e-commerce was a brand new concept. Back then, it meant that you should email people about your commerce, not sending fax or writing letters. It has evolved incredibly over the past 18 years. So I believe today, we should stop using the concept “e-commerce”, just because everyone is using email and much more. It’s just commerce. Commerce can’t exist today without technology. New technologies around commerce, e.g. mobile payment are now available even in remote villages in China, thanks to innovative business – like Alibaba. Now, back to the question – would C2C affect B2C? Of course, it will. It already did. These are ancient terms as well, big ten years ago. Today we mostly talk about P2P (peer-to-peer) and O2O (online-to-offline). A translation for this question would be: why are business increasingly impacted/interrupted by individuals? (like Daigou) The answer is, innovative companies like Alibaba has changed the game. They have provided individuals (including Daigous) amazing infrastructures and tools to enable/empower then to interrupt traditional business. These infrastructures include communication technologies (e.g. WEChat), transaction platforms (e.g. Taobao), payment systems (e.g. Alipay) and easy global logistics and fulfilment systems. Traditional B2Cs have two options. They can either ignore these new infrastructures and lose the competition, or they can get embrace this change and utilise these new infrastructure built by innovators, and continue their success.

2. We understand that the highest proportion of Products that online shoppers buy through Haitao are: Fashion (22%), beauty and cosmetics (20%), grocery (19%), sports and leisure products (18%). Why do you think this is the case and do you think Australia has a comparative advantage over these products? (Barry Li)

Barry Li: Sadly, I know nothing about fashion, nor beauty and cosmetics. I don’t have any figure, but I heard Japanese beauty and cosmetics products are more popular in China. I’m not familiar with sport and leisure products either, as this is my audit busy season I have pretty much no time for sports and leisure. I do believe Australia has excellent comparative advantage over some mineral resources and some agriculture products, but I don’t think the comparative advantage is a pre-requisite for transactions of goods. Sometimes, it is about choices and diversity. As China’s mid-class population grow, they want to try things from other countries, and they don’t even have to be better. They need to be exotic. Chinese people always prefer Chinese food, even for those who have lived overseas for decades. However, no one mind having burgers from time to time, because that it’s good to have a different flavour now and then.

3. Barry, in your book you impress us that Chinese consumers are changing Australia’s culture, not only in e-commerce. How is it so and would you like to comment on the behaviours of Chinese consumers that tend to be different from Australian or western consumers for e-commerce? What might be the next big thing for e-commerce?

Barry: That sounds like a false impression you got there “Chinese consumers are changing Australia’s culture”. I have never implied that in my book. It is tough to discuss Chinese consumer’s behaviour within a few minutes. It’s not one Chinese consumer, but 1.5 billion Chinese consumers and everyone behave differently according to their income/wealth/age/profession/location and a million other factors. You are asking what the next big thing for e-commerce is? This is the answer – big data. Before we had big data, we had to category consumers into a few very inaccurate categories to analyse their behaviour. But with today’s technology, especially the big data like Alibaba has collected, we can almost have a tailored experience for every consumer. Example, my login to Taobao shop would look completely different from my wife’s login. The first screen we see, and the recommended products would be based on our private data, which hopefully are secure, and not shared with other people for other purposes. However, it is not really the next big thing, it is happening today in China. In Australia, we have strict laws on how data are collected and used. So it will be the next big thing in Australia.

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