An Unlikely Story. - .: Tea House Hangzhou, China

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/E-
Trade_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 Solutions
Lack of sales prospects or • Online market research
purchasing efficiencies. • User forums/knowledge sharing
• Robust global online company database
Lack of online payment, logistics, • On-Offline partnerships (introducing
etc. 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 • Public-Private partnership
support (TPOs/TAs/IOs) to support e-commerce
• Education campaign s (e-business
champion event etc.) and trainings to
target SMEs directly
5
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 6
Traditional Sourcing Work Flow
It addressed a key “pain point” for many buyers around the
world. . .
Search/
Evaluate Negotiate Transact
Discovery
Average sourcing cycle: 3.3 – 4.2 months

52% of time spent searching for/identifying 20% of time spent on screening/sorting
appropriate suppliers proposals
18% of time spent on RFQ development/ 10% of time spent on contract
RFQ response 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

7
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 public-
private partnership
Alibaba’s 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
Alibaba’s Vision
让天下没有难做的生意
Marketplace
To Make It Easy To Do Business Anywhere
商人都要用阿里巴巴
Community To Be an Essential Partner to All
Businesspeople
Long Term Vision

建立一家持续发展 “ 102 年”的公司
To Build a Company that Lasts “102 Years”
10
SMEs Spend More Marketing Dollars
Online
Growing SME Usage of Online B2B Marketplaces Online Share of SME Marketing Budget
MM
45 25%
41.0
20.4%
36.3
20%
30.6
%
30 5. 0
=4 15%
AGR
C 22.0
10.8%
16.0 10%
15
11.7
8.8
5%
5.4
3.1 2.1%
1.0 1.7
0 0%
2002 2004 2006 2008E 2010E 2012E 2002 2006 2012E
Source: iResearch
11
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
12
World’s 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 Buyers
 Typically  Across more

SMEs than 200
International
InternationalMarketplace
Marketplace countries
 Ten to a few
thousand 4.4
4.4million
millionregistered
registeredusers
(1)
users (1)  Companies
employees of all sizes
 5,000+  Diverse end
product markets
categories in
30+
industries China
ChinaMarketplace
Marketplace
23.2
23.2million
millionregistered
registeredusers
(1)
users (1)
Note:
1. Company data as of Dec 31, 2007
A Premier Global Brand
Recognition by Global Thought Leaders In a Different League from Its Peers…
US Entrepreneur Magazine “Best sites for global entrepreneurs”
“Best Website for

Entrepreneurs”
June 2004
Forbes Magazine
“Best of the Web”
2000 - 2006
 Business for Diplomatic Action
 CIA’s World Fact Book
Far Eastern
 Economist Intelligence Unit
Economic Review
 The World Bank’s Doing Business
“Best Global B2B
HBS Case Studies Marketplace” Database
2000 and 2001 2000
 U.S. Department of Commerce’s
International Trade Administration
•14
Alibaba.com’s International Marketplace
With over 4.4 million registered members from 200

countries & regions, it’s truly a global community
UK 6% EU 9% India China 7%
8%
Canada 3%
US 18% South East

Asia 13%
South America 3% Middle East 4% Australia 3%
15
Integrated eCommerce Platform
Search
Alibaba China - B2B Taobao – C2C & B2C

Shop
Overseas
Alibaba Buyers/Importers
International - B2B Consumers
Choose
Transact
Exporters China Wholesalers Retailers/ Power Sellers
Pay
China Wholesalers
One Stop Services for SME Exporters
www.alibaba.com www.alibaba.com.cn
(International Marketplace) (China Marketplace)
Export to Export to
Globe China
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.
19
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]
20
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.
21
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
22
Roadshow video “I’m an Alibaba member!” –
2mins
•12/07/21 14:55 •23

Thank you!
[email protected]
24

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An Unlikely Story. . .

 Big SME* market

 Critical to global economy and trade

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

SMEs are the driving force in many economies…

 Positive role in poverty alleviation;

 Cover almost all (productive) sectors;

 Are a main source for new products;

 Diversify the economy and introduce flexibility

UNCTAD Information Economy Report 2007-2008

The advent of eMarketplaces has helped to address many of

Lack of trust • Introducing trust building mechanisms

. . . and Alibaba.com developed a particularly unique (yet

Average sourcing cycle: 3.3 – 4.2 months

Traditional Sources of Supplier Information

Source: The Aberdeen Group

The eMarketplace Value Proposition:

eMarketplaces empower SMEs to become global players

Goal 8: Develop a Global Partnership for Development

Long Term Vision

A truly global network for importers and exporters of raw

e-marketplace Global Buyers

 Typically  Across more

Recognition by Global Thought Leaders In a Different League from Its Peers…

US Entrepreneur Magazine “Best sites for global entrepreneurs”

“Best Website for

With over 4.4 million registered members from 200

US 18% South East

South America 3% Middle East 4% Australia 3%

Alibaba China - B2B Taobao – C2C & B2C

(International Marketplace) (China Marketplace)

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

“With Alibaba, we are worldwide!"

Member: Mr. Hammad Kanwal

• Amazingly, I got orders within five days

“80% of Our Business Comes From Alibaba!

Member: Mr. Moola Ram Potalia

Alibaba.com Holds Private Sourcing Event for Woolworths Limited

"I have also posted buy leads attracting quick

 "I have discovered Alibaba.com at

 I find Alibaba very professional and

•12/07/21 14:55 •23

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