Tea on Alibaba
Alibaba’s first large-scale piloting of delivery by drone was for packets of tea shipped to 450 homes in three cities.
CHINA
Alibaba is the largest e-commerce firm in the world. It is naturally compared to Amazon but is more like eBay in that its main base of growth is as a logistics platform for businesses to reach consumers. Its business-to-consumer Tmall has close to 400 million active customers.
More and more tea companies are seeing it as a vehicle for gaining a presence in China’s notoriously complex market. Examples include the negotiations by the Sri Lanka EDB to distribute Ceylon teas, Tata’s contracting to sell Tetley tea bags, and the small British luxury brand, Whittard, using Tmall to highlight its “Britishness” in the Chinese market.
Tata sees Alibaba as a key part of its strategy for targeting “white spaces,” markets like China and Malaysia where it has no presence. “People [in China] are getting bored with that green tea and the hugely ritualistic aspect of making tea. In fact, they are now wanting tea bags, which is considered aspirational. The Britishness and expertise of our blenders are the two hooks that we will use in China.” An industry commentator endorses “the ‘British’ and ‘affordable luxury’ angle as a good brand positioning strategy.” (Tata spokesperson)
Whittard of Chelsea, the luxury tea, chocolate, and coffee firm, illustrates the strategic appeal of Alibaba’s platform. Its analysis showed that Whittard had 200 resellers on Tmall drove a very large fraction of visits to its own website. Now, it sells direct with all physical fulfillment, payments and logistics handled technology, logistical support, and wholesaler and partner networks.
An executive comments that the Alibaba opportunity is “insane” and asks why larger companies are still waiting.Waitrose has not waited. The supermarket chain sells its Earl Grey tea and digestive biscuits on Tmall.