On Friday, He Jian, Founder and CEO of Ezbuy, posted (on WeChat) an open letter to Jack Ma, founder of Alibaba Group.
In the post, titled An open letter to Jack Ma: you are such a bully, we should not allow such tactic, He used more than 3,000 words to describe the hardship he and his team endured in their startup journey, their sense of helplessness while facing ‘a big bully’, and protest against Alibaba’s destructive competition tactics.
The letter aimed at Alibaba’s closure of Ezbuy’s Taobao buyer accounts and steps to limit Taobao sellers from trading with Ezbuy.
As entrepreneurs ourselves, we feel him. Seeing the company you built being destroyed by someone else, and not being able to do anything about it, anyone has the right to be angry.
However, business is business. As aggressive as Alibaba is, the root cause of Ezbuy’s problems is not with Alibaba. Also, the very success of Ezbuy was largely thanks to Alibaba’s Taobao platform.
Coincidentally, not long before He’s open letter, we posted an article on the Low Down, precisely describing the failure to make improvements, especially in product and tech, that led Ezbuy into today’s conundrum.
A few weeks earlier, seeing the moves of Alibaba and its subsidiary Lazada, we published two pieces of analysis on the Low Down. Both pointed out that Ezbuy needed to face a new reality and quickly adjust its strategy before it is too late.
Alas, as much as we are experienced in Southeast Asia’s e-commerce sector, we are just observers in the Ezbuy saga, and could not force anything upon Ezbuy management.
In fact, after the publication of the first article, Ezbuy management reached out to us, asking us to take it down because ‘it was defamatory’.
Well, we all know that good medicine always tastes bitter. We expected that in the interest of Lazada, Taobao will hit Ezbuy sooner or later, but we did not expect it to be so soon – only two months after our first article.
Also, it seems public relations has always been a weak link for Ezbuy. When thousands of customers complained about not receiving the goods, Ezbuy refused to answer a media query, nor did it issue any statement to address customer concerns.
The same happened (ironically same time) last year when IT problems caused Ezbuy to delay millions of orders. The management just refused to use any public communications channel.
Only until 8 December, they issued a PR statement. The statement, which was full of grammatical mistakes, was as bitter about Taobao as He’s open letter was. However, it did not say anything meaningful about customers’ concerns – to get their orders delivered.
Coming back to the open letter, we failed to understand what is the purpose of this: gaining sympathy from the public to give pressure to Alibaba? Revealing the hardship to the public before throwing in the towel? Or a clean cut from Alibaba in order to strategically align with someone else (say JD.com or Amazon)?
One thing certain is that the article failed to point out the current landscape of e-commerce in Southeast Asia. Whoever understanding this landscape would know why Alibaba is coming down hard on Ezbuy.
To put it simply, Ezbuy is not a downstream distributor of Alibaba (i.e. part of the ecosystem). To the contrary, it is a direct competitor of Lazada, which is 83% owned by Alibaba.
We do not know whether the management failed to understand this reality, or they were too confident (and arrogant) about their past success.
It has been seven years since the company was founded – they have had plenty of time and opportunities to solidify their market position and reduce reliance on Taobao. But they did not do it. It is a big shame that we have described a few times in our previous articles.
We do not want to give a further blow to Ezbuy; instead, we would like to remind all founders, those of Ezbuy included, to be very careful about the path you choose.
That is what we call strategy.
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