Web Presence in China Reveals Big Data's Power to Win

Beijing, July 22, 2015 (Newswire.com) - ​Speaking on program Thoughtful China, Web Presence In China CEO Jacob Cooke explained how big data can be utilized to give western companies an edge in entering China’s massive ecommerce market, worth an estimated $1.6 trillion in 2014.  The interview was conducted by Trevor Lai, whose following questions yielded answers from Cooke essential for western companies seeking to leverage big data for a business advantage in China.

Lai: “How does big data apply to businesses in general?”

"So we're using data science to get all sorts of personal information on the counterfeiters: phone numbers, ICP numbers, and the like, and use the data for a clear case to expedite having them delisted from search engines and kicked off of Alibaba. "

Jacob Cooke, CEO

Cooke: “One of the advantages China has over the West is the number of third party portals that conduct transactions and then leave the reports of those transactions live for people to see. So we can use data science to gather all those transactions and record them, and really analyze them to look at revenue & inventory projections, to see at what prices products are moving off the shelves.

We scrape the transaction records ourselves, which can easily number half a million data points. We can take a look at Nike or Adidas, for example, how many small medium or large product sizes they’re moving, and forecast how much inventory would be needed to keep similar products in China, for example. Once you compare that to the pricing, and your own manufacturing costs, you can see if China is going to be an option for you, if you’ll be able to compete at the price points people want.”

Lai: “Is programmatic scraping something you developed or something that is industry practice?”

Cooke: “Technically what we do is not very complicated, but execution can get tricky. Alibaba wants to put their revenue numbers out at what they are, so they can restrict IP addresses and use other methods which require ingenuity to get access to what is essentially public information.”

Lai: How can smaller startups leverage data to get information to grow their business?

Cooke: “Startup companies are doing it all the time, that’s another reason Alibaba doesn’t necessarily want the data to get out there. We’re seeing the rise of so many third party platforms in China: Miyabaobei for baby products, Jiuxian for wine and liquor sales, which can offer price advantages. When we look at the statistics, the giants such as Alibaba are losing market share, even though the overall market is going up. But the little guys are gaining quickly.”

Lai: “One of the biggest challenges for smaller players is where to start with big data. Your thoughts?”

Cooke: “From the point of view of a company wanting to enter the market, Alibaba’s numbers are huge, but there are quite a few economists who question the profits of the participants. When we have a degraded brand experience, as we do on JD, Tmall, or Taobao, and others, it’s hard for marketers to get the value add.

For example, compared to the experience on a stand alone site like L’Oreal’s, for example, being able to virtually try on make up, the third party sites are never going to be able to do that. Their software just isn’t capable of that.”

Lai: “So if you’re a smaller player, and you have a specialty, an area you’re truly strong in, you can leverage technology, to play that up as a differentiating point?”

Cooke: “Absolutely.  Find out where people aren’t. Find out where the opportunities are. And look at the transactions, because the price points are the big thing. If we discover you can’t compete at the price points similar products in the market are competing at, then we’re going to save you millions of dollars. China ecommerce isn’t right for everybody.”

Lai: “If a foreign company came to you, and said ‘We’d like to expand our business to China, and we’d like to know how your analytics will be able to help us land in China and start to scale in a smarter way, how would you advise them?”

Cooke: “Use two things. For most of the people coming into the China market, digital will be the answer for scaling quickly. You’re going to want to take a look at your competitors before you come in here, find out where they’re not advertising, find out where they are, take a look at your customers.  Are they on social media? Are they on bulletin boards?

Your strategy depends on your sector, of course. Medical and life sciences right now is booming, while apparel is saturated and can be very tough to move into. You can’t just look at China as a trillion dollar market and think, ‘OK, I come here and open up and I’m good.’”

Lai: “But with so many metrics and data available, how do you determine for your client what to filter out and what to focus on?”

Cooke: “In terms of market entry, transactions are number one.  Not just what the industry numbers are, but what is actually transacting. How much of those famous Alibaba 11/11 Singles Day sales were deeply discounted and sold at a loss?  What is the real price point? What price are the products actually moving at, with coupons and other discounts, rather than MSRP. “

Lai: “Does the gray market make your job more difficult – the counterfeits?”

Cooke: “We’re using data science a lot right now for counterfeits in the pharmaceutical industry, to detect fake drugs. It is still rampant, so you can get into trademark infringement and file claims. But if Alibaba or Baidu aren’t going to deal with you, you’re hamstrung. So we’re using data science to get all sorts of personal information on the counterfeiters: phone numbers, ICP numbers, and the like, and use the data for a clear case to expedite having them delisted from search engines and kicked off of Alibaba.

The laws in China are actually more protective for online transactions than in the U.S. For example, Google doesn’t take liability for someone selling a fake product with their advertising services. But in China, search engines like Baidu must. So once you notify them with clear data, they take very quick action to remove that.”

For more information, contact info@web-presence-in-china.com,

Or call 1-604-336-3899

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