Online alliances that deliver success

Unlike Amazon, however, Royal Mail also has a detailed business model for China, a model that could reap lucrative rewards. The UK postal group is set to take 15 to 20 percent of the retail price of each bike from Brompton, a price the bike maker believes is worth paying for low-risk exposure to China. Royal Mail will also receive shipping costs, paid by the customer.

However, Royal Mail's China expansion plans go way beyond traditional shipping and delivery. Other European service providers seeking to follow on Royal Mail's trail need to be aware that the UK postal provider has a trained network of staff in China to help with customer inquiries, such as how to unfold the Brompton bikes and handle repairs. The group has also struck a deal with national carrier China Post, which will use its network of distributors to deliver goods to customers' homes once they arrive in China.

Not that this is all about Royal Mail and other European service sector players expanding with precision across China. Royal Mail's online Tmall shop should also enable Alibaba and its entire portfolio of brands to expand internationally, and rapidly. This recent tie-up will raise brand awareness of Tmall and parent brand Alibaba across world markets and, in so doing, will also help the tens of millions of Chinese small and medium-sized enterprises expand into ever diverse and lucrative international markets.

So it is no surprise to read recent reports of many more well-known, global retail brands investing in very similar tie-ups. The capital investment and time required to invest in brick-and-mortar stores, even for the likes of such successful global retail brands as Zara, Nike, Estee Lauder, Calvin Klein and Burberry, is far more risky than the sort of Alibaba-like partnership that can promote foreign brands to all corners of the Chinese mainland relatively inexpensively.

It also appears that the enormous Alibaba machine is particularly keen to do business across Europe and promote all manner of brands from this region, hence the mainly UK and other European brands cited above. A similar attitude toward the United States and US brands has not been made apparent.

Of course this is also part of a shrewd strategy for Alibaba, which is characteristic of a number of Chinese Internet brands where innovation and ambition lie at the heart of corporate strategy and culture.

Despite Alibaba's dominance across its domestic market, its leadership remains fiercely competitive and hungry for a similarly dominant market position internationally.

In addition to Tmall, Alibaba's Amazon-like platform, Alibaba owns Taobao, an eBay-like platform. Taobao handled 70 percent of Alibaba's $300 billion sales volume for 2014.

Both platforms are set to benefit immensely from Royal Mail-like tie-ups, and both could emerge as global, and not just Chinese, giants in the near future.

Both, therefore, represent a fantastic opportunity for more and more European businesses to expand into and across China.

But, and it is a big but, even though an extremely speedy and low cost route to China market expansion and penetration via Tmall may now present itself to more and more European businesses - both service and manufacturing sector players - it is and must be a long-term strategy. Continuous learning, understanding and adapting to the diverse and changing Chinese consumer is essential.

Tmall will provide an almost immediate China presence for European companies and their brands, but any immediate profit should be reinvested again and again into long-term brand building.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer at Southampton University. The views do not necessarily reflect those of China Daily.

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