crowdSPRING Pairs 200,000 Designers & AliExpress Suppliers
This August, China-based Alibaba Group Holding Ltd., a seller of promotional and various other products, has announced that its fiscal first-quarter revenue soared 56% to $7.4 billion, surpassing analysts’ estimates. The company has also been investing in the markets outside of China to expand its footprint across the world. With that goal in mind, AliExpress, the e-commerce giant’s online retail service aimed primarily at international buyers, partnered with Chicago-based crowdSPRING in an effort to target new merchants in Russia and the U.S. Following the partnership newly announced between AliExpress and crowdSPRING, our media reporter Laura Myers got a chance to catch up with Jason Byer from crowdSPRING to learn more about the ins and outs of the company and what this new partnership means to the e-commerce game:
How Does crowdSPRING Work?
First things first, what is crowdSPRING? Well, the company acts as a crowd-sourcing matchmaker connecting all sizes of businesses with over 200,000 talented creatives from Australia to Zimbabwe, to offer solutions for businesses’ creative needs at a reasonable price. The company was founded in 2008 and since then, the startup has helped over 15,000 businesses with creative services like company naming and product naming, as well as graphic design services such as logo design, print design, and site design. Besides the graphical side, the company also helps with designing physical products as well.
“Unlike a traditional model of design agency or a freelancer, crowdSPRING offers dozens of different final designs that are fully thought-out,” says Jason and continues: “Businesses are able to see all the final works and select the best fit among them while paying only for the design they have chosen.” Once you have chosen the design you’d like, you’ll review design proofs and make refinements. In the end, the full intellectual property rights of that design get transferred over to you, meaning you actually own the design.
As a business, if you want to post a job on the platform, you are offered three packages as silver, gold, and elite. The silver account costs $299 which includes the $200 minimum fee for the winning designer. If you want to get top-notch work, obviously you need to allocate more budget which comes down to $899 so you can buy an “elite” account where customers have more control and probably more appealing design suggestions made by more seasoned creatives.
What Does crowdSPRING Bring to AliExpress?
“AliExpress approached us looking for a solution to deliver to their customers and they had two types of customer in mind,” said Jason. One is expectedly the end user who individually makes purchases on the platform, while the other one is an individual supplier who uses the platform to sell to that end user. Unlike Amazon, AliExpress acts only as an e-commerce platform and doesn’t sell products directly to consumers. “Having these two customer types in mind, what they wanted was some creative talent or in other words, to be able to showcase some creative designs, which are unique to AliExpress and their suppliers, on their platform,” further explained Jason. While being on the lookout for a solution that can make this connection happen, one aspect was mission critical to Alibaba - which is scalability. As Jason puts it, “You don’t become one of the world’s biggest companies by not thinking of years down the road in terms of how something would scale.” Therefore, crowdSPRING and its 200,000 talents being able to offer hundreds of unique names, designs, or other creative needs that resonate with end users in just a week were one of the most appealing sides of a partnership with crowdSPRING.
For large enterprises like Alibaba, scalability is almost a table stake, and obviously, crowdSPRING met that requirement. However, to become a partner with one of the fastest growing e-commerce behemoths, you must be offering something that at least creates an additional value. With that question in mind, we dug deeper and we found out that there is also another offering of crowdSPRING that excited Alibaba the most which is the ability that the creatives on the platform can actually design a physical product for suppliers on the platform and, the supplier receives full intellectual property rights to the design through a non-disclosure agreement. What that means to Alibaba is that now suppliers can have brand new products come out on AliExpress while they don’t exist anywhere else in the world as they have been created specifically for AliExpress. To circle back to those two customer personas that Jason mentioned, thanks to crowdSPRING bringing this value proposition to the table, AliExpress would be able to provide more services to more suppliers and ultimately, offer end users a better product selection.
How crowdSPRING May Help Alibaba Expand Overseas?
China’s rigid restrictions for foreign companies along with the savvy of local operators has given rise to the domestic e-commerce players like Alibaba in the market. Every day, Amazon’s market share in China is getting dwarfed by Alibaba in the face of fierce competition. Its sales represented just 1.1 percent of China’s online gross merchandise value in 2015, and by 2016 that figure had dropped to 0.8 percent, according to an ICBC note that cited iResearch. Alibaba’s valuation has reached to $400 billion while Amazon.com has a valuation of about $470 billion. To put them into perspective, Facebook’s valuation is at about $490 billion.
At end of the day, both companies are striving for the same goal; expanding their businesses overseas. To prevail in the U.S. and China markets among others, the two companies keep expanding themselves far beyond mere retail sales. Amazon, for instance, is hiring by the hundreds in China to fill jobs ranging from internet software engineers to designers for Alexa, positioning the company to regain some of the market share it lost to Alibaba.
There is, on the other hand, a booming but untapped growth opportunity for Alibaba in China which is a mushrooming demand for small-scale imports of authenticated goods. If Alibaba can put small American businesses in touch with that growing consumer in the world’s largest online shopping arena, then it could make substantial progress in the U.S. market, while benefiting everyone. To do so, the e-commerce giant has to offer more services, and this is where partnering with companies like crowdSPRING comes into play. “One of the reasons that Alibaba reached out to crowdSPRING is that they wanted their suppliers to stand out - not only stand out on their platforms but all platforms across the world,” said Jason during the interview.
He believes, as a business, first competing online, then standing out relies on how strong your branding is. However, strong branding is not a destination, yet it is a continuous journey, and every stage requires a different level of authenticity. According to Jason, crowdSPRING can help businesses on every stage of branding. He elaborated on that with an example: “If you are a brand new company, we can help you create a differentiator with your unique company name in the market place, or if you are an existing business and launching a new product line, then we can create that product name for you or at least give you those hundreds of suggestions.” What’s fascinating about the integration between Alibaba and crowdSPRING, Jason believes, is the fact that both organizations are able to work simultaneously at a very fast speed which is mandatory to survive and remain competitive in the e-commerce space considering speed has always been one of Amazon’s fundamental differentiators that influence consumers’ purchasing decisions.
As far as globalization goes, branding takes a different turn as it may require refraining from some certain colors or patterns. Jason made a good point in that regard by saying that crowdSPRING has creatives all around the world and when organizations want to expand their business outside of their origin, typically they tend to look for a designer only from that market but he said that there might be a more talented or like-minded designer who is not native born but has an expansive experience in that culture so in that case, using crowdSPRING would help businesses avoid missing out on that potential.
crowdSPRING seems to bring a high value not only to Alibaba and AliExpress but also to the talents who lack credentials and connections. For all of its advantages, crowdSPRING's business model is something of a double-edged sword as some believe leveling the playing field may undermine all the work put into the profession. Now, I am not a designer or running a design agency, but to me, the system seems to work mostly in favor of suppliers, which also means end users of AliExpress. On the other hand, there might be an exchange of profitable benefit to top creatives for a little bit of risk being taken and effort being given away.