Baidu, Alibaba, and Tencent can either help or hurt Western businesses that aspire to succeed in China. As I noted in a recent blog post, these three companies, collectively known as BAT, are more than phenomenally successful businesses. They are cultural and economic forces shaping the way people live in China, the world’s largest retail market.
As I noted in “Why Baidu, Alibaba, and Tencent Dictate Your Future in China,” BAT operate as complex commerce and lifestyle ecosystems, and it’s not always easy for a business to navigate them. For example, Tencent owns WeChat, the wildly popular app that acts as a walled garden –keeping users inside WeChat to find everything they need and shut out of Alibaba-owned Tmall.
At Moonshot, we believe that succeeding in BAT’s world means navigate these firms through the lens of your people, processes, and platforms – an approach we call the BAT Framework.
A Way Forward with BAT
As I noted in my last post, choosing to experiment within the BAT ecosystems has implications. Therefore, it’s important to know what the options are going into it and evolving as you prove additional layers of fit, like so:
- Problem solution fit: making sure your idea solve a real, human problem
- Product market fit: being in a meaningful market and delivering a product or service that addresses that market
- Business model fit: scaling profitably
Here is where Moonshot’s BAT Framework comes into play. It covers questions such as:
- People: for example, in which ecosystems are my most enthusiastic customers?
- Process: what is the role each ecosystem plays in my customer’s journey?
- Platform: in which platform does my product have the greatest traction?
Here is a broader look at the framework:
The BAT Framework will not help you make an easy “either/or” choice between Baidu, Alibaba, and Tencent. But the framework will help you figure out where to invest the majority of your marketing and commerce spend. That choice, for now, comes down to Alibaba versus Tencent. But as WeChat challenges Baidu’s leadership in search, your ability to navigate the world of BAT will soon become more complicated.
We suggest that you apply the framework to assess the strength of your business foundation with your people, processes, and platforms. For example:
- As we’ve noted in previous blog posts, the Chinese consumer’s journey is not a linear, transactional one but rather a discovery process that encompasses experiences such as virtual reality on platforms such as Tmall. In fact, Tmall offers businesses tools to ensure that their brand sites on the marketplace possess the level of interactivity that Chinese consumers expect. Are you capitalizing on those tools, or does your presence on Tmall look as bland and transactional as an Amazon merchant page? And, as noted, how discoverable are you on Baidu? How strong is your foundation there?
- Consider the existence of capabilities such as the Tmall Genie, which should factor into a retailer/CPG’s decision on how to engage with ecosystems. Since Alibaba appears to be out in front from a conversational AI perspective, if voice represents an opportunity for your customer journey, leveraging Tmall as a path to conversational AI might make a lot of sense.
Bear in mind some important context for doing business in China:
- What works for you outside of China doesn’t matter in China. QR codes, ignored in so many markets outside China, are essential to doing business in China.
- BAT are in a constant state of change, making the notion of business maturity problematic. As noted, BAT are rapidly accelerating the uptake of cashless commerce in China, and now they are redefining the online/offline experience, especially as Alibaba implements its new retail strategy.
In China, you are always learning. So long as you have the right foundation in place, you’ll always be growing, too. And the BAT Framework will help you succeed.
See also these posts as part of our series of insights about succeeding in China:
“Why Baidu, Alibaba, and Tencent Dictate Your Future in China,” April 17, 2018.
“The Rise of the Super App in China,” February 22, 2018.
“How Consumers in China Are Creating an Omnichannel Future,” May 9, 2017.