The East Is Driving Innovation

With artificial intelligence, livestreaming and ultra-fast logistics, innovation is driving e-commerce, albeit at different speeds around the world. But to understand where new developments are emerging and where digital commerce is heading, you have to look East, at least from an Italian perspective. In this sense, Rodrigo Cipriani Foresio, a Bocconi alumnus who is now General Manager of Alibaba Group for Southern Europe, has a privileged vantage point. He has one eye on what is happening early in China and the other on the landscape of the Old Continent.

What are the main drivers of global e-commerce development today?

There is not just one answer, it depends on where we are talking about. In China, e-commerce is the cutting edge of commerce, accounting for almost 50% of all retail, and Alibaba has one billion customers. In the United States it is 25%, in Europe 20%, in Italy it stops at 10%. In China, not only is the market the largest, but also the most cutting edge, suffice it to say that 95% of transactions take place on a mobile device.

What are these innovations that we still haven’t seen in Europe, or barely?

Two or three years ago there was a livestreaming boom in China: today it is almost impossible to sell a product without showing how it is used. Influencers have become central figures, capable of intercepting young audiences on behalf of brands — even super luxury Italian brands — and can really affect sales numbers. Another key driver is logistics. In the East there is very fierce competition on ultra-fast deliveries, now the benchmark is to be able to deliver anywhere in 30-40 minutes. For this reason, alliances have been created within our group between companies that provide different services. This ensures that, for example, the same delivery person can deliver both a pizza and perhaps even a bag purchased online.

Alibaba, however, remains a pure marketplace. Is it a model that holds up well even in a changing context?

Absolutely yes. Being a pure marketplace means that companies that open a digital storefront have full control over pricing, shipping and promotions. We provide the platform, access to a billion consumers and supporting data, but the store remains the brand's. This model, created in China, is popular precisely because it does not interfere with the strategies of individual brands and leaves companies in full contact with the customer.

How are Italian companies reacting to this approach? Are they ready for it or would they prefer a "turnkey" service?

This is a sore point because, for years, I have been asked by European companies when we would open the marketplace in Europe. Now that we are doing it, we realize that there is a lack of preparation. Those who do e-commerce in Italy, in particular, have the Amazon model in mind, in which they sell stock to an intermediary who does everything else. Our model requires direct management, a dedicated team or an external partner. A change of mentality is needed that involves more effort, but I believe also more long-term benefits. There is greater awareness of this in medium and large companies, and today more than 500 Italian companies successfully sell in China. But if we look at SMEs, we still notice big gaps, especially due to the lack of key professional figures such as export managers, logistics experts or digital e-commerce managers.

Where is AI already being applied today and what potential does it hold for the development of e-commerce? 

In China, AI is already pervasive. It is used to generate marketing content, creating complex videos even from a simple photo. It offers highly personalized purchase recommendations, based on the user's browsing and purchase history. It is crucial in customer service and the optimization of advertising investments, suggesting the most effective keywords for example.

Is Made in Italy still attractive to Chinese consumers?

Chinese consumers today are young, very focused on sustainability and eco-friendly products. But they are still not loyal to brands. They are increasingly better prepared, they read labels and their trust has to be earned every day. Ten years ago, they were hungry for Western products in the country, today they have begun to develop local alternatives of the highest quality. In the beauty sector, Chinese, Japanese and Korean products are already eroding market share from Western products, and this trend will soon arrive in fashion as well. Competition is higher than ever.

What is the advice you would give to an Italian company that wants to enter the Chinese market?

The question I hear most often is: "If I invest x, how much will I earn?" Here, this is not the right approach. A platform like Alibaba is not just a sales channel, but a strategic partner. It is a tool for communicating, for dialoguing with young people, for understanding the trends that will come. It is a huge door on an equally gigantic market that, Alibaba or not, must still be overseen. In 2022 we published a SDA Bocconi study coordinated by Professor Carnevale Maffé, relating to the impact of Alibaba in the first 10 years in Italy. Around 500 companies were operating on the platform and exported €5.4 billion to China. Considering that there was €18 billion in Italian exports to China, this means that almost a third passes through Alibaba. Now we are updating the data, which we will publish shortly, and everything is growing. They are still small numbers, however, considering that it is less than 5% of Italy's global exports and that China is the second largest market in the world. In short, there is ample room for growth. The commitment on the part of Italian companies, however, must be long term, with a horizon of at least three years. And it is not enough to manage everything remotely, because Chinese partners show that they appreciate those who invest in their country with a physical presence and dedicated human resources more. In short, it’s time to plant the seeds: the ground is fertile, the Chinese appreciate our history and the quality of our products — but we need to prove that we’re as ready and capable as they are.