Alibaba Australia considers selling apartments
5 Feb 2017
Australia’s list of top-selling products to Chinese consumers on giant Chinese e-commerce platform Alibaba could soon include another Chinese favourite: apartments.
The US-listed $328 billion company’s focus for Australia, following the launch of its first office in Melbourne on Saturday, would be on small businesses selling products popular with Chinese consumers, such as vitamins, and dairy and agricultural products.
But Alibaba has considered selling apartments on its platforms as well as facilitating the payment of deposits or settlements of apartments through its payment transactions service Alipay.
“It has been discussed internally,” Alibaba Australia New Zealand business development director John O’Loghlen said.
“This space is [currently] well serviced by the market and the Monika Tus of the world and they do a good job. Our focus is on small businesses but we’ve discussed it [selling real estate]. It is possible, as it is an area that is changing so fast.
“Alipay is the dominant platform for these transactions, but it is important that the Australian and Chinese tax bureaucracies are transparent. We are incredibly aware of the flows of money that it will attract.
“We have been on the front foot … engaging in this conversation.”
Mr O’Loghlen said any plans for apartment sales or online transactions would not be immediate for Alibaba.
If executed, it could resolve the capital restriction problems faced by Chinese purchasers of Australian real estate, which have curtailed a lot of apartment sales in the past two years.
The only competitors to an Alibaba-led platform in Australia, aside from the two dominant local platforms of realestate.com.au and domain.com.au, would be Australia-based Chinese platforms ACProperty.com.au and its sister site Sodichan.com and Juwai.com’s new platform with Chinese internet giant Tencent.
Pure online can’t last forever
In recent times, Alibaba has shown keen interest in real estate, not just in “proptech” but in bricks and mortar.
Last month, the company made a $3.5 billion bid for Chinese department store chain Intime Retail Group. The acquisition of the business means Alibaba can access Intime’s inventory quicker and allow its online customers to pick up orders from physical stores.
Executive chairman and founder Jack Ma who attended the launch on Saturday, said while there were no immediate plans to purchase a shopping centre in Australia he believed there should be an alignment of both online and offline shopping businesses.
“For sure one thing is Chinese people like Australian products, but demand is still huge,” he said on Saturday.
“When we build new retail, we want to combine online and offline together. I don’t believe pure online businesses can last forever. So, while our businesses grew tremendously last quarter, we also saw the decline of traditional retail. This is no good, somebody rich but somebody [else] is poor.”
Westfield Shopping Centre owner Scentre Group’s chief executive Peter Allen also attended the launch.
Other guests at the launch held at Melbourne’s Grand Hyatt included Federal minister for industry, innovation and science Arthur Sinodinos, Victorian premier Daniel Andrews, New Zealand minister for economic development Simon Bridges, Chinese ambassador Cheng Jingye and former Prime Minister Kevin Rudd’s daughter Jessica Rudd, whose business Jessica’s Suitcase is hosted on Alibaba’s Tmall platform.
Mr Ma reaffirmed however Alibaba’s immediate focus in Australia would be to get small businesses on to the Alibaba platform to sell their products to Chinese consumers, especially with Chinese middle class demand burgeoning.
Alibaba plans to visit businesses and introduce courses on how owners can use ecommerce systems at universities, such as Newcastle University, where Mr Ma has just donated a $US20 million ($26 million) scholarship.
“We can work with universities and train the trainers, and put some courses for young people so that they can learn the technology of e-commerce,” he said.
“The next five years is about train[ing] the trainers.”
“Australia has the potential to do business with China. There are 500,000 Chinese [nationals] in Sydney and 300,000 in Melbourne. These people love Australia and Australian products and they also understand the Chinese market. These are the people who can help.”
“We always talk about the fruits, baby products and even Australian honey, there are so many things that Australia can sell to China.”
“Whether a large company with existing links to China or a mum-and-dad run exporter operating out of a garage, Alibaba is here to make it easy to do business anywhere.”
On Saturday, Auspost and Alibaba also signed an agreement to expand Auspost’s online Alibaba shopfronts to the south east Asian platform, Lazada, increasing more traffic exposure.
Mr Ma said he also discussed the Electronic World Trade Platform (eWTP), a global ecommerce platform with reduced trade barriers for small businesses with Prime Minster Malcolm Turnbull in Sydney last Friday.
“Most of the trade zones are designed for big companies, if we can do a free trade zones for the small companies, with 24 hours clearances, quicker inspection, that can help small businesses.”
The eWTP was also one of the topics at the G20 summit in Hangzhou, China last year.
In the long term Alibaba would also establish its cloud provider service, Alibaba Cloud and strengthen its Paypal-equivalent service Alipay in Australia.
“Alibaba’s vision for the Australia and New Zealand region is to build the entire operating infrastructure needed to enable local businesses globally,” Alibaba local managing director Maggie Zhou said.
‘We use it to give back’
When asked how many jobs Alibaba would be able to create in Australia, Mr Ma said: “In China, each business we help online, we create three jobs.”
While he did not provide the exact number of jobs likely to be created, Mr Ma said Alibaba facilitated $US560 billion in sales and created more than 30 million jobs in China last year. Its plans is to create 100 million jobs this year, and make 10 million businesses profitable on its platform.
He also confirmed Alibaba received a grant from the Australian government to expand its businesses but said it was not a “kickback” for Alibaba but a clear acknowledgment from the government for Alibaba to help local small businesses.
“The money goes back to SMEs. The government gave us money to help local businesses, we will use it to give back,” he said. “Now we have more responsibility.”
“If a company ever thought about getting money from the Chinese government, in China, this is a stupid company.”
Alibaba would continue to support globalisation, not just in the trade of goods, but the trade of culture. The way to trounce anti-globalisation sentiments now was to go directly against it, Mr Ma said.
“Globalisation is the future,” he said, “Everyone is concerned about trade wars. Worrying about it won’t solve it, but getting involved in it helps improve trade. When trade stops, war starts.”