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Empowering SMEs Worldwide:

The Alibaba Story


Brian A. Wong
Senior Director
International Business Development and Marketing
WSIS follow-up and implementation:
Action Line Facilitation meeting "E-business
May 2008

An Unlikely Story. . .

Tea House
Hangzhou, China

All About SMEs!


Big SME* market
In China : 42 million SMEs
In Europe: 23 million SMEs
In US: 22 million SMEs

Critical to global economy and trade


In China: 58% of GDP, 68% of import and export volume, 75% of employment
In Europe: over 50% of GDP, 60% of employment, over 100 million jobs
In US: over 50% of GDP, 67% of export volume, 67% of employment

* SME means all employer firms, self-employment nonincorporated and incorporated.

The Importance of SMEs in Developing


Countries
SMEs are the driving force in many economies

Engine for job creation;

Positive role in poverty alleviation;

Cover almost all (productive) sectors;

Are a main source for new products;

Diversify the economy and introduce flexibility

Challenges in Developing Countries for


Ecommerce
But are they fully utilizing the technological tools available to
prosper in the global economy?

Few fully utilize Internet and e-commerce: ICT not used in sales
prospects or purchasing efficiencies.

Lack of online payment logistics: perceived difficulties in introducing


online financing and payment, and customs collection and taxation
applications.

Lack of trust on demand side.

Lack of awareness even among TPOs: less than half TPOs


canvassed indicated a specific e-trade component in their national
export development strategies.

Source: International Trade Centre www.tradeforum.org/news/fullstory.php/aid/234/ETrade_Opportunities:_Are_Developing_Countries_Ready_.html


UNCTAD Information Economy Report 2007-2008

A New Gateway to Global Trade


The advent of eMarketplaces has helped to address many of
these issues. . .
Challenges
Lack of sales prospects or
purchasing efficiencies.

Solutions

Online market research

User forums/knowledge sharing

Robust global online company database

Lack of online payment, logistics,


etc.

On-Offline partnerships (introducing


relevant third party services in the export
value chain)

Lack of trust

Introducing trust building mechanisms


(authentication and verification,
inspection services, etc.)

Lack of awareness and limited TPO


support

Public-Private partnership
(TPOs/TAs/IOs) to support e-commerce

Education campaign s (e-business


champion event etc.) and trainings to
target SMEs directly
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E-Marketplaces: The Alibaba Approach


. . . and Alibaba.com developed a particularly unique (yet
simple) model
A Hangzhou Teahouse
A marketplace provides the cups, tea and scenic
surroundings to facilitate match-making between
buyers and sellers
Customers bring the products and ideas
User generated content (Web 2.0)
For members, by members, of members
Small is beautiful

Jack Ma
Chairman of
Alibaba.com

Traditional Sourcing Work Flow


It addressed a key pain point for many buyers around the
world. . .
Search/
Discovery

Evaluate

Negotiate

Transact

Average sourcing cycle: 3.3 4.2 months


52% of time spent searching for/identifying
appropriate suppliers

20% of time spent on screening/sorting


proposals

18% of time spent on RFQ development/


RFQ response

10% of time spent on contract


negotiations

Traditional Sources of Supplier Information


Referral (colleagues, associates)

Industry associations

Trade shows

Trade directories

Industry magazines, trade journals

Existing suppliers

Source: The Aberdeen Group

eMarketplaces: a Window of
Opportunities for SMEs
. . . and in the process helped empower SME suppliers all
over the world
The eMarketplace Value Proposition:
Low entry barrier
Reduce business costs and time, particularly search
Streamline supply- and export-distribution chains
Brand building using cost effective media

eMarketplaces empower SMEs to become global players


without the resources of a multi-national corporation

Aligned objectives within publicprivate partnership


Alibabas objective is consistent with the UN Millennium
Development Goals (MDGs)
Goal 8: Develop a Global Partnership for Development

Target 18: In cooperation with the private sector, make available the
benefits of new technologies, especially information and
communications

Alibabas Vision

Marketplace

To Make It Easy To Do Business Anywhere

Community

To Be an Essential Partner to All


Businesspeople

Long Term Vision

102
To Build a Company that Lasts 102 Years

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SMEs Spend More Marketing Dollars


Online
Growing SME Usage of Online B2B Marketplaces

Online Share of SME Marketing Budget

MM

GR
A
C

.0%
5
4

Source: iResearch

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Global network at your fingertips


A truly global network for importers and exporters of raw
materials, component parts and finished goods
Manufacturers

Export
e-marketplace

Global Buyers

Trading agents

Manufacturers
Import
Trading agents

e-marketplace

Global Suppliers

Retail shops

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Worlds No.1 Online B2B Marketplace


for International & Domestic Trade
Alibaba.com represents a phenomenon which is changing the
way SMEs around the world conduct business
Sellers

Typically
SMEs
Ten to a few
thousand
employees
5,000+
product
categories in
30+
industries

Note:
1. Company data as of Dec 31, 2007

Buyers

International
InternationalMarketplace
Marketplace
(1)
4.4
4.4million
millionregistered
registeredusers
users (1)

China
ChinaMarketplace
Marketplace
(1)
23.2
23.2million
millionregistered
registeredusers
users (1)

Across more
than 200
countries
Companies
of all sizes
Diverse end
markets

A Premier Global Brand


In a Different League from Its Peers

Recognition by Global Thought Leaders

Forbes Magazine
Best of the Web
2000 - 2006

HBS Case Studies


2000 and 2001

Best sites for global entrepreneurs

US Entrepreneur Magazine
Best Website for
Entrepreneurs
June 2004

Far Eastern
Economic Review
Best Global B2B
Marketplace
2000

Business for Diplomatic Action

CIAs World Fact Book

Economist Intelligence Unit

The World Banks Doing Business


Database

U.S. Department of Commerces


International Trade Administration

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Alibaba.coms International Marketplace


With over 4.4 million registered members from 200
countries & regions, its truly a global community
UK 6%

EU 9%

India
8%

China 7%

Canada 3%

US 18%

South America 3%
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South East
Asia 13%

Middle East 4%

Australia 3%

Integrated eCommerce Platform


Search

Alibaba China - B2B


Overseas
Buyers/Importers
Alibaba
International
- B2B

Taobao C2C & B2C

Shop

Consumers

Choose

Transact
Exporters

China Wholesalers

China Wholesalers

Retailers/ Power Sellers

Pay

One Stop Services for SME Exporters


www.alibaba.com

www.alibaba.com.cn

(International Marketplace)

(China Marketplace)

Export
to
China

Export to
Globe
SMEs

Export to
Japan
New
www.alibaba.co.jp
(Japan Marketplace)

Alibaba.com partnerships
Alibaba.com cooperates with leading organizations all over the
world. . .

and is looking for more partners including public-private partnership!

Success Story: Pakistan Seller


With Alibaba, we are worldwide!"
Member: Mr. Hammad Kanwal
Company: FASHIONS CARE
Type: Manufacturer
Size: 11-50 people
Country: [Pakistan]
Products: T-shirts, polo shirts, denim
jeans, cotton gloves

Amazingly, I got orders within five days


from Europe after joining! I was really
surprised to see such quick results with
Alibaba

After joining TrustPass, I started getting


about 20 per week.

Now, our customers cover from Italy,


France, China, America, Ireland and
Spain.

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Success Story: Sellers(TrustPass members)


80% of Our Business Comes From Alibaba!
We have been associated with Alibaba for two years,
and since that time we have had a significant amount
of serious enquiries. There is not a single day that
goes by when we don't get enquiries routed through
Alibaba. Alibaba's service is also an invaluable source
of commercial news that not only provides information
but also forecasts the rising trends in the global
market. Being a TRUSTPASS member has seriously
added more credibility to our business and increased
our number of fraud-prevented customer inquiries.
As a TrustPass member from India, we are extremely
happy with the services Alibaba provides. We
received our first buyer form Alibaba and there have
been many more since. Today, we receive 80% of our
business through Alibaba and we believe that this will
only increase in future.
Member: Mr. Moola Ram Potalia
Company: TOWN AART
Country: [India]

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Success Story: Big Buyers


Alibaba.com Holds Private Sourcing Event for Woolworths Limited
The Woolworths China Sourcing Event was a great success. It allowed
the Woolworths sourcing team to meet many quality new suppliers.
Alibaba was very professional in its preparation and management of the
day, leveraging its extensive knowledge of quality suppliers to target the
right companies to meet our long-term sourcing needs.

Woolworths Limited is the largest retailer in Australia, serving customers across the nation for
over 80 years. Woolworths is one of Australia's top companies by market capitalization, with
sales reaching A$42.5 billion in the 2006/2007 financial year.
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Success Story: SME Buyers


"I have also posted buy leads attracting quick
and good quality responses from the suppliers."

"I have discovered Alibaba.com at


Ambiente 2004 where the Alibaba team
introduced me the company. I have
since been using the website on a
regular base (at least once per week)
and I think it's a great sourcing tool.
I find Alibaba very professional and
easy to use. I searched and found
many suppliers and I have also posted
buy leads attracting quick and good
quality responses from the suppliers."
Customer: Mr Fernando Lomely
Company: Genesis Ferran S.A. De C.V.
Country: Mexico

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Roadshow video Im an Alibaba member!


2mins

09/01/15 15:43

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Thank you!

Brian@alibaba-inc.com
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