A report from Bloomberg on Wednesday described how Chinese conglomerate Alibaba Group Holding Ltd used its customer data to sell new product ideas to food producer Mars Inc and personal care products company Unilever NV. Alibaba could accomplish this thanks to its involvement in so many aspects of the consumer market, including online retail services and payment services, the report said.
With the shifting focus of Taiwanese companies toward the services industry, and the growing importance of ASEAN countries and India as part of the government’s New Southbound Policy, Alibaba’s strategy should be emulated by companies.
The countries targeted by the policy are increasingly interested in the automation and data exchanges brought about by Industry 4.0. Collecting and analyzing big data to improve market products benefits consumers and companies alike, as long as the data collection is in line with data privacy laws.
As the article said, privacy is less of an issue in China, but Taiwanese laws are stricter about selling the personal information of consumers, particularly since July and the launching of the Personal Data Protection Office, which follows the EU’s General Data Protection Regulation, a set of guidelines for how personal information should be used.
If Taiwanese companies could collect and use data with the knowledge and permission of online consumers, the potential benefits would be tremendous. A poll conducted by the Market Intelligence & Consulting Institute in May showed that 4.5 of 10 purchases made in Taiwan were ordered on the Internet, with the number of online consumers in their 20s increasing the most.
Another survey the institute conducted in July found that most online purchases by Taiwanese were through China-based platforms such as Taobao and Tmall, which could imply that Taiwanese are fine with some personal information being collected by retailers for the convenience of shopping online.
It showed that Taiwanese online retailers are failing to satisfy the purchasing needs of local consumers, as consumers are willing to overlook the risks associated with shopping on Chinese platforms, such as the prevalence of counterfeit goods and the possibility of electronics hiding malicious software.
To emulate Alibaba, retailers must acquire more consumer data. Alibaba has its own payment service — Alipay — enabling it to acquire information on shoppers’ spending habits from their payment data.
The biggest challenge for Taiwanese shopping platforms, such as PChome Online Inc, would be to convince consumers to adopt whatever payment service they develop, as well as promoting the widespread adoption of the method by numerous retailers.
An article published on Web site TechNode on March 26 said that only about 13 percent of the Taiwanese population uses mobile payment services, compared with 61.2 percent in China.
It said the problem was that small businesses in Taiwan — which account for one-third of all registered businesses in the nation — are reluctant to adopt mobile payment methods for fear that they will evolve into larger businesses required to pay higher taxes.
To make Taiwanese shopping platforms more competitive with those in China, the government might consider granting a subsidy to companies that adopt mobile payment services. Taiwanese companies could become pioneers in consumer data analysis and product development in the ASEAN and Indian markets, where Industry 4.0 development strategies are being adopted.
Taiwan is known for quality over quantity — the opposite of China — in South and Southeast Asian markets, and is a leader in information technology products and services. Taiwan must use its strengths to dominate in e-commerce and product development.
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