With the intension to enable SMEs grow their business via e-commerce, Jack Ma founded Alibaba.com in the year 1999 along with 18 other founders. The platform serves millions of buyers and suppliers from more than 240 countries and regions
Can you elaborate the journey of Alibaba.com? When and how it started?
Jack Ma, Alibaba Group’s founder and current Chairman has launched Alibaba.com in 1999 along with 18 other founders, with a dream of helping small businesses grow their business through e-commerce.
Since then, Alibaba.com has grown into a leading global online marketplace for small companies around the world to identify potential trading partners and interact with each other to conduct business online. Today, no other online B2B marketplace can compare to Alibaba.com in terms of size, scale and global reach. The platform, which now serves millions of buyers and suppliers from more than 240 countries and regions, showcases products ranging from raw materials to finished goods in more than 40 industry categories.
We have set up our independent operations in India a few years back to offer better on-the-ground support and more educational opportunities to our customers, and have quickly expanded to four local offices in Mumbai, Delhi, Chennai and Ahmedabad. In India, Alibaba.com has more than 3.3 million small businesses registered as of June 2013 and is the platform’s biggest supplier market outside of China.
What is the significance of e-commerce to SMEs in India? What are the opportunities for Indian SMEs on the e-commerce platform?
The internet has opened up a large range of opportunities for entrepreneurs of all ages, income levels and expertise – particularly small businesses. We have seen that SMEs who embrace the internet are growing faster and adding more jobs than those that don’t. E-commerce has made it possible for SMEs from large cities to rural villages to connect and trade with buyers from across the world.
B2B e-commerce platforms like Alibaba.com provide small businesses with opportunities to establish their presence on the internet by providing them a one-stop shop, identifying potential trading partners, learning more about global trade, sharing trading experience and interacting with each other to conduct business online. Because of their huge scale, these virtual marketplaces can provide great benefits to users with limited or even no investment and minimum time.
It also helps small business to explore new markets and diversify its risk by expanding the customer base effectively. The geographical reach of potential customers that an online marketplace like Alibaba.com can bring to small business is beyond what traditional marketing efforts can offer, for instance, millions of buyers are sourcing products on Alibaba.com every day and this provides suppliers in any country a chance to sell to the world. What once used to be challenging for businesses to reach out to new customers and markets, is now easy with e-commerce and the internet.
What is the size of the SMEs e-business market in India? How about the traction of e-commerce in India among SMEs?
India is a unique and very important market for us because it has a large MSME population (more than 26 million) and has both a robust domestic market and growing export sector. It is the second largest supplier market (after China) on the portal.
As manufacturing costs across the world continue to rise, more buyers from overseas are looking for sourcing options from countries with distinct, quality products at competitive prices. With the incredible number of growing enterprises in India, the country is increasingly being recognized as a hub for manufactured products for export.
With increasing Internet penetration and the availability of more payment options, Indian SMEs who have traditionally been focused on domestic trade are now well poised to develop export trade through e-commerce. Because of its global reach, Alibaba.com can provide great benefits to Indian SMEs over traditional marketing efforts with limited or even no investment and much more targeted use of their time.
What are the challenges for Indian SMEs on the e-commerce platform?
As with any market, there are both challenges and opportunities. We believe the opportunities for local SMEs have yet to be fully explored but that the internet will help them reach new heights. SMEs are considered as the engine of economic growth in both developed and developing countries as they assist in regional and local economic growth. With more than 26 million SMEs in India, there is enormous potential.
One of the most critical elements to e-commerce in India is the broadband infrastructure. A boost to this industry will enable Indian SMEs from all corners of the country to be competitive in the international marketplace. While 3G spectrum has enhanced internet usage, it hasn’t filtered down to the general population. The solution to this would be to boost internet infrastructure, particularly in Tier II and Tier III cities. It is among the major contributing factors to the lack of widespread adoption of e-commerce by local businesses.
We continually have to overcome the perceptions of SME owners, who are the ones driving the engine of economic growth around the world, to enhance their exposure through the Internet in order to export overseas through e-commerce websites like Alibaba.com. Sadly, the myth of being too small to trade globally still permeates but we remain confident that with training, exposure and the growth of e-commerce in India, small business owners will see the benefits of listing through our platform.
Over the last two years, we have conducted training workshops in more than 20 cities across India in the last two years. We have trained a significant portion of our Gold Supplier members on how best to leverage e-commerce and how to make the most of their Alibaba.com account.
We remain confident however, that e-commerce has a bright future in India. As the industry continues to develop, the bigger the potential for local SMEs to reap the benefits of online platforms like ours to grow their business.
Alibaba.com has rolled out a series of tools and programs to train Indian SME members; can you throw some light on this? What kind of initiatives have you taken in the last year to accelerate SMEs e-business?
Because of our global reach, Alibaba.com can provide great benefits over traditional marketing efforts with limited or even no investment and minimum time. Alibaba.com offers Indian small businesses an online presence 24 hours a day, 365 days a week to an existing network of potential global trade partners.
We also drive various local initiatives to raise the competitiveness of our members. The Verified Membership initiative allows non-paying supplier members in India to establish trust with potential buyers. The Verified Membership program is aimed at helping Alibaba.com’s non-paying supplier members establish trust with potential buyers undergoing basic background checks to confirm that they are legitimate businesses. The India Leading Supplier programme is another initiative that trains and educates active members on Alibaba.com to further enhance their online profiles.
Over the last year, we conducted workshops in more than 10 cities, where we trained our supplier members on how best to leverage e-commerce and how to make the most of their Alibaba.com account. Additionally, we do online trainings and events such as Open Sesame (monthly events) for suppliers to understand how the platform works. Recently we arranged these events at smaller towns such as Kanpur, Moradabad, Ludhiana. We also offer help to our Indian suppliers by occasionally organizing offline big buyer sourcing events, which enable them to meet and interact with major global buyers face-to-face and better equip them for global trade opportunities.
What will be your market strategy for this year in India?
At Alibaba.com, our mission is ‘to make it easy to do business anywhere.’ It is our responsibility to uphold that mission and we make it accessible for all small business owners to reach a global audience for global trade.
We recognized that global buyers are looking for supplier partners who are innovative, proactive and that they feel they can trust with long-term business relationships. Buyers are more likely to engage with suppliers they recognize as sophisticated, committed and trustworthy. It is, therefore, imperative that suppliers on an e-commerce platform, such as Alibaba.com, create an online profile that is clean, comprehensive and showcases expertise and product differentiation clearly.
In India, Alibaba.com’s strategic focus is clear: grow the pool of quality suppliers from India, encourage local suppliers to increase the number of unique product listings on the site and encourage suppliers to be more active on the site to help them reach global buyers looking for long-term supplier partners.