alibaba presentation

The B2B eMarketplace:Empowering your SME Members

6th World Chambers Congress

Kuala Lumpur, Malaysia

June 2009

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!

SMEs are the engines of growth around the world

Contributing in many ways to the economy

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 Developing Countries

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eCommerce remains limited in developing countries.

Source: UNCTAD Information Economy Report 2007-2008

Enterprises in Developing Countries in Ecommerce

How « online » are European SMEs?

And while a majority of European SMEs are connected, and most even have their own websites. . .

•Business use of the Internet and websites, as a percentage of businesses with 10 or more employees•Source: OECD Science, Technology and Industry Scoreboard 2007 •http://dx.doi.org/10.1787/118144527771

European Enterprises in e-Commerce

. . . most are still not fully utilizing the power of the internet to promote themselves and products

In the EU, on average, only 15% of enterprises receive the order online, and 23% purchase online.

Source: UNCTAD Information Economy Report 2007-2008

Crisis or Opportunity?

• 75% of Americans surveyed believe new entreprenuers and SMEs will be the key to economic revival

• 4 out of 5 considered starting their own business

• 44% who considered starting their own business said not understanding where to find the right suppliers was the top reason for not moving forward

With the recent downturn an Alibaba survey shows that this recession will serve as a catalyst for economic revival. . .

. . .and those who embrace disruptive technology, will survive and thrive while those who do not will die

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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/identifying appropriate suppliers

• 18% of time spent on RFQ development/ RFQ response

• 20% of time spent on screening/sorting proposals

• 10% of time spent on contract negotiations

Source: The Aberdeen Group

Traditional Sourcing Work Flow

With the internet, B2B sourcing and selling is much easier

A new gateway to global trade

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Challenges Solutions

The advent of eMarketplaces has helped to address many of these issues

Lack of foreign market knowledge Online market research

User forums/knowledge sharing

Robust global online company database

Lack of confidence in doing international trade

On-Offline partnerships (tradeshows, buyer-seller matching events)

Public-Private partnership (TPOs/TPAs)

Limited capital and resources Cost effective online marketing tools

Low cost communication tools

Alibaba.com B2B

11 Strictly Confidential

International Marketplace Facilitates global trade between China and

international suppliers and buyers 8 mm registered users as of Dec 31, 2008 59,000 paying customers as of Dec 31, 2008

International Marketplace Facilitates global trade between China and

international suppliers and buyers 8 mm registered users as of Dec 31, 2008 59,000 paying customers as of Dec 31, 2008

Alibaba.com B2B Marketplaces | Anatomy of the Marketplace

China Marketplace Facilitates domestic trade between China suppliers and

buyers 30 mm registered users as of Dec 31, 2008 372,000 paying customers as of Dec 31, 2008

China Marketplace Facilitates domestic trade between China suppliers and

buyers 30 mm registered users as of Dec 31, 2008 372,000 paying customers as of Dec 31, 2008

Suppliers Buyers

International SMEs

China SMEs

International Buyers

China Buyers

• Keywords & premium placement

• Third-party authentication & verification

• Trust profiles

• Tools to manage CRM and trade info

• Search

• Directory

• Inquiry RFI/RFQ forms

• Post buying leads

• Tools to manage CRM and trade info

Community + Marketplace platformServices /

Products to suppliersServices /

Products to buyers• Close to 4.2 mm storefronts of suppliers

• Instant messaging

• Trade negotiation

• Over 200 online community forums for user groups


Alibaba.com B2B Marketplaces | Two Major Components of Alibaba.com

1. Marketplace 2. Community


Alibaba.com B2B Marketplaces | International Marketplace

Key features on product listing page:

2. Supplier/Product Information• Company Products• Company Profile• Company Video

2. Value-Added Services (VAS)• Keyword Search• Premium Placement• Virtual Showroom

4. Real-time Communication &Inquiry

• Trade Manager • Email

1. Search Engine• Keyword Search• Product Category

14 Strictly Confidential 14

Global network at your fingertips

Alibaba e-marketplace

Alibaba e-marketplace

Retail shops

Manufacturers

Trading agents

Global Buyers

Manufacturers

Trading agents Global Suppliers

Export

Import

A truly global network for importers and exporters of mechandise, finished products, component parts and raw materials


United States, 16%

India, 11%

European Union(excluding UK), 9%

Others, 51%

Canada, 2%

United Kindgom,5%

China, 7%

Alibaba.com B2B Marketplaces | International Marketplace

More than 8 million users have registered on Alibaba international B2B marketplace. US, India, Europe (excluding UK), China, UK and Canada are the key countries that the users come from…


6.011.0

19.827.6

38.0

05

10152025303540

2004 2005 2006 2007 2008

Note:1. Company data as of Dec 31, 2008

6401,295

2,0732,957

4,600

0500

1,0001,5002,0002,5003,0003,5004,000

2004 2005 2006 2007 2008

CAGR = 59%

MM

‘000

# of Registered Users # of Storefronts

# of Paying Members

#1 E-Commerce (Marketplace) Website #1 International Business & Trade Website (Import and Export in China)

CAGR = 64%

Alibaba.com B2B Marketplaces | Key Operating Metrics

‘000

CAGR = 53%

77.9141.6

219.1305.5

432

0

100

200

300

400

2004 2005 2006 2007 2008


Complementary strength of Alibaba with TPOs and trade associations/chambers

Key Success Factors of SME online promotion

Associations/ Chambers

Alibaba

Global Reach

• Size of global buyers and suppliers

• Traffic (critical mass on the B2B e-marketplace)

• Cost effective marketing channel

Local Knowledge

• Local language and culture

• Understanding of local trade policies

• Local database of SMEs

Trade knowledge

• Deep domain expertise in int’l trade practices, laws and regulations

• Broad offline network

Technology Skill

• Internet technology (website, search, SEO, etc.)

Combining the core strengths of chambers/associations with the marketing reach of an eMarketplace creates new opportunities for members


Partner: Korea International Trade Association (KITA: www. KITA.org) – A major business association in Korea with over 65,000 members

Partnership Model: KITA and Alibaba.com jointly provide KITA member SMEs with a special package which include Alibaba.com International TrustPass membership and KITA’s tradeKorea e-portal. Each SME would be eligible to a subsidy which could only be used against subscribing value-added services to facilitate their listing, such as Korean-to-English translation services. Educational courses on e-commerce and online marketing would also be provided to participating companies for their better utilization of the Internet and Alibaba.com.

Practice Sharing – Trade Association program in Korea


Partner: Taiwan External Trade Development Council (TAITRA, www.taitra.org.tw) – A non-profit trade promotion organization in Taiwan which is jointly sponsored by the Taiwan government, industry associations, and several commercial organizations

Partnership Model: Alibaba formed partnership with Taiwan Trade Association, and provide for Taiwan SMEs a bundled package which includes membership of both Alibaba.com Gold Supplier and TAITRA’s Taiwan trade e-Portal. Those who joined the bundled membership would get a NT10,000 discount off the original total price of the two memberships. Alibaba and TAITRA also jointly host road shows and seminars to help SMEs breakthrough in the downturn of int’l trade situation.

Practice Sharing – TPO program in Taiwan


Partner: İHRACATI GELİŞTİRME ETÜD MERKEZİ (IGEME)IGEME is the government run Export Promotion Center for Turkey (http://www.igeme.org.tr/indexe.cfm - in Turkish)

Partnership Model:IGEME approved Alibaba on a list of B2B marketplaces that are all qualified for subsidies. Provided you submit the necessary paperwork, IGEME will reimburse you 50% of the membership fee (up to an amount I think of US$3K). SMEs can apply for multiple memberships from different websites until they reach the cap.

Practice Sharing – Government support program in Turkey


Practice Sharing – Government subsidy program in Chile

Partner: Country of Chile

Partnership Model:

The program with the Chambers of Commerce of Santiago in CHILE is a 3-way deal to be complete by mid-June.

The Chambers of Commerce will work with the Yellow Pages of Chile to compile and provide Alibaba.com with the database of Chilean products. The Chamber of Commerce provides excellent data control and legitimacy in the SME field, and already has the dataset of companies in Chile with product references. The Yellow Pages Company will provide support through their massive outreach program to encourage the integration of additional products to the Chambers Database by SMEs.

Overall about 30,000 companies and 120,000 products are expected to be presented within the program.


Partner: State of Washington, United States

Partnership Model:Individual States in the US have created economic development organizations to promote direct investment as well as companies within the State itself. The logic is simple and practical: the more revenue made by companies within the state, the more tax revenue these companies will be able to generate.

The State of Washington is aware of their state’s value as a brand, and the need to support as well as develop this value to promote commercial activities, which is what the State Your Product program hopes to accomplish. Alibaba.com provides the State of Washington an opportunity to promote their companies via the Transfer Express product integration process to help them bolster the impact of Washington State companies in the global marketplace.

Practice Sharing – Government subsidy program in Washington, US


Partner: As part of the ICC, the WCN portal officially links the virtual online commerce space to the dynamic and only truly global physical business network of over 14,000 registered Chambers of Commerce and Industry (CCI) that in turn represent over 40 million member businesses worldwide.

Partnership Model: Alibaba and the WCN today announced an MOU to cooperate on a number of activities and projects including but not limited to the promotion of WCN’s members on a global basis on the Alibaba marketplace, exchanging relevant trade information between the two parties and explore the possibility of increasing the level of trust within the communities by exploring collaboration with Chamber Trust for WCN and Trustpass for Alibaba.com

Practice Sharing – The World Chambers Network


Thank you!

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