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Empowering SMEs Worldwide:The Alibaba Story
Brian A. WongSenior Director
International Business Development and Marketing
WSIS follow-up and implementation:Action Line Facilitation meeting "E-business
May 2008
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An Unlikely Story. . .
Tea HouseHangzhou, China
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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.
All About SMEs!
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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
The Importance of SMEs in DevelopingCountries
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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
Challenges in Developing Countries forEcommerce
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 TPOscanvassed indicated a specific e-trade component in their national
export development strategies.
But are they fully utilizing the technological tools available toprosper in the global economy?
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A New Gateway to Global Trade
5
Challenges Solutions
The advent of eMarketplaces has helped to address many ofthese issues. . .
Lack of sales prospects orpurchasing efficiencies.
Online market research
User forums/knowledge sharing
Robust global online company database
Lack of online payment, logistics,etc.
On-Offline partnerships (introducingrelevant third party services in the exportvalue chain)
Lack of trust Introducing trust building mechanisms(authentication and verification,inspection services, etc.)
Lack of awareness and limited TPOsupport
Public-Private partnership(TPOs/TAs/IOs) to support e-commerce
Education campaign s (e-businesschampion event etc.) and trainings to
target SMEs directly
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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
E-Marketplaces: The Alibaba Approach
Jack Ma
Chairman ofAlibaba.com
. . . and Alibaba.com developed a particularly unique (yetsimple) model
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Traditional Sources of Supplier Information
Referral (colleagues, associates)
Trade shows
Industry magazines, trade journals
Industry associations
Trade directories
Existing suppliers
Search/Discovery
Negotiate TransactEvaluate
Average sourcing cycle: 3.3 4.2 months
52% of time spent searching for/identifyingappropriate suppliers
18% of time spent on RFQ development/RFQ response
20% of time spent on screening/sortingproposals
10% of time spent on contractnegotiations
Source: The Aberdeen Group
Traditional Sourcing Work Flow
It addressed a key pain point for many buyers around theworld. . .
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Low entry barrier
Reduce business costs and time, particularly search
Streamline supply- and export-distribution chains
Brand building using cost effective media
eMarketplaces: a Window ofOpportunities for SMEs
The eMarketplace Value Proposition:
eMarketplaces empower SMEs to become global playerswithout the resources of a multi-national corporation
. . . and in the process helped empower SME suppliers allover the world
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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
Aligned objectives within public-private partnership
Alibabas objective is consistent with the UN MillenniumDevelopment Goals (MDGs)
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Alibabas Vision
To Make It Easy To Do Business Anywhere
To Be an Essential Partner to All
Businesspeople
102 To Build a Company that Lasts 102 Years
Marketplace
Community
Long Term Vision
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SMEs Spend More Marketing DollarsOnline
Online Share of SME Marketing BudgetGrowing SME Usage of Online B2B Marketplaces
1.0 1.73.1
5.4
8.8
11.7
16.0
22.0
30.6
36.3
41.0
0
15
30
45
2002 2004 2006 2008E 2010E 2012E
MM
Source: iResearch
2.1%
10.8%
20.4%
0%
5%
10%
15%
20%
25%
2002 2006 2012E
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Global network at your fingertips
e-marketplace
e-marketplace
Retail shops
Manufacturers
Trading agents
Global Buyers
Manufacturers
Trading agentsGlobal Suppliers
Export
Import
A truly global network for importers and exporters of rawmaterials, component parts and finished goods
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Worlds No.1 Online B2B Marketplace
for International & Domestic Trade
Note:1. Company data as of Dec 31, 2007
Alibaba.com represents a phenomenon which is changing theway SMEs around the world conduct business
Sellers
International Marketplace
4.4 million registered users(1)
China Marketplace
23.2 million registered users(1)
Across morethan 200countries
Companiesof all sizes
Diverse end
markets
TypicallySMEs
Ten to a fewthousandemployees
5,000+
productcategories in30+industries
Buyers
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Recognition by Global Thought Leaders In a Different League from Its Peers
Forbes MagazineBest of the Web
2000 - 2006
US Entrepreneur MagazineBest Website for
Entrepreneurs
June 2004
Far EasternEconomic ReviewBest Global B2B
Marketplace2000
HBS Case Studies2000 and 2001
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
Best sites for global entrepreneurs
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A Premier Global Brand
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Alibaba.coms International Marketplace
South America 3%
India 8% China 7%
South EastAsia 13%
EU 9%UK 6%
US 18%
Middle East 4% Australia 3%
Canada 3%
With over 4.4 million registered members from 200countries & regions, its truly a global community
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Search
Alibaba International - B2B
Alibaba China - B2B Taobao C2C & B2C Shop
Choose
Transact
Pay
Integrated eCommerce Platform
China Wholesalers
Overseas Buyers/Importers Consumers
Exporters China Wholesalers Retailers/ Power Sellers
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One Stop Services for SME Exporters
SMEs
www.alibaba.com
(International Marketplace)
Export toGlobeExport toChina
www.alibaba.co.jp
(Japan Marketplace)
Export toJapan
www.alibaba.com.cn
(China Marketplace)
New
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Alibaba.com partnerships
and is looking for more partners including public-private partnership!
Alibaba.com cooperates with leading organizations all over theworld. . .
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Success Story: Pakistan Seller
Amazingly, I got orders within five daysfrom Europe after joining! I was reallysurprised to see such quick results withAlibaba
After joining TrustPass, I startedgetting about 20 per week.
Now, our customers cover from Italy,France, China, America, Ireland andSpain.
Member: Mr. Hammad KanwalCompany: FASHIONS CAREType: ManufacturerSize: 11-50 peopleCountry: [Pakistan]
Products: T-shirts, polo shirts, denim jeans,cotton gloves
With Alibaba, we are worldwide!"
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Success Story: Sellers(TrustPass members)
We have been associated with Alibaba for two years,and since that time we have had a significant amountof serious enquiries. There is not a single day thatgoes by when we don't get enquiries routed throughAlibaba. Alibaba's service is also an invaluable sourceof commercial news that not only provides information
but also forecasts the rising trends in the globalmarket. Being a TRUSTPASS member has seriouslyadded more credibility to our business and increasedour number of fraud-prevented customer inquiries.
As a TrustPass member from India, we are extremelyhappy with the services Alibaba provides. Wereceived our first buyer form Alibaba and there havebeen many more since. Today, we receive 80% of our
business through Alibaba and we believe that this willonly increase in future.
Member: Mr. Moola Ram PotaliaCompany: TOWN AARTCountry: [India]
80% of Our Business Comes From Alibaba!
http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/ -
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Success Story: Big Buyers
The Woolworths China Sourcing Event was a great success. Itallowed the Woolworths sourcing team to meet many quality newsuppliers. Alibaba was very professional in its preparation andmanagement of the day, leveraging its extensive knowledge of qualitysuppliers to target the right companies to meet our long-term sourcingneeds.
Alibaba.com Holds Private Sourcing Event for Woolworths Limited
Woolworths Limited is the largest retailer in Australia, serving customers across the nation forover 80 years. Woolworths is one of Australia's top companies by market capitalization, with salesreaching A$42.5 billion in the 2006/2007 financial year.
http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/ -
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Success Story: SME Buyers
"I have discovered Alibaba.com atAmbiente 2004 where the Alibaba
team introduced me the company. Ihave since been using the website ona regular base (at least once per week)and I think it's a great sourcing tool.
I find Alibaba very professional andeasy to use. I searched and foundmany suppliers and I have also postedbuy leads attracting quick and goodquality responses from the suppliers."
Customer: Mr Fernando LomelyCompany: Genesis Ferran S.A. De C.V.Country: Mexico
"I have also posted buy leads attracting quick
and good quality responses from the suppliers."
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Roadshow video Im an Alibaba member! 2mins
http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/ -
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Thank you!
http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/