30 January, 2011

Alibaba casts a spell

Alibaba.com is the global leader in e-commerce for small businesses under the flagship company of Alibaba Group. Founded in 1999 in Hangzhou, China, Alibaba.com makes it easy for millions of buyers and suppliers around the world to do business online through a global trade platform or market place known as www.alibaba.com for various importers and exporters. Alibaba group forms a community of more than 53 million registered users in more than 240 countries and regions. Alibaba.com also offers business management software and international infrastructure services targeting business across China, and provides educational services for enterprise management and e-commerce professionals. Alibaba.com has offices in more than 60 cities across Greater China, India, Japan, Korea, Europe and the United States. Alibaba.com is the No. 1 supplier market outside mainland China and the 2nd largest buyer market. India accounts for 11% of all registered users on Alibaba.com’s international marketplace as of June 30, 2010. We speak to Mr. Sandeep Deshpande, Country General Manager, India, Alibaba.com about the past achievements and future plans for this innovating and growing organization in the field of fashion and apparel.

Apparel: How was Alibaba group formed? Tell us about its inception.

SD: Jack Ma, founder and chairman of Alibaba.com who was previously an English teacher, set up his first Internet business completely by accident. In 1995, he felt a need to set up a business platform for Chinese small business. He decided to start an Internet company to make Chinese businesses searchable by foreign companies. He founded Alibaba.com with 17 other people in 1999 with a dream of helping small businesses grow their business through e-commerce. Alibaba.com was started as trading platform for small manufacturers to sell their wares. Since then, Alibaba.com has grown into the premier online marketplace for small companies around the world to identify potential trading partners and interact with each other to conduct business online. In India, where Internet penetration is still relatively low, there are already more than 1.45 lakh businesses using Alibaba.com.

Apparel: How is Alibaba.com helping the Apparel industry in particular? What is the contribution to e-commercial value from the point of view of apparel industry?

SD: Smaller enterprises in the apparel industry have traditionally looked within their own borders, and often just within their own province, to find trading partners. A study conducted by Alibaba.com in collaboration with Synovate Business Consulting found that 40% of SMEs in the apparel sector did not yet made use of the opportunities in international trade (as on December, 2009). Alibaba.com provides an efficient, trusted platform connecting small and medium buyers and suppliers from around the world. It makes global sourcing available 24/7/365 and removes barriers of geographies and time zones. Alibaba.com has witnessed tremendous growth in inquiries for Indian apparel manufacturers on the site. SMEs on Alibaba.com are seeing a higher rate of growth in global inquiries. For instance, Q2 2010 saw inquiries in Apparel increase by 48.9% as compared to 2009 Q2. We also provide a wealth of information related to international trade to keep our users abreast of the latest trading resources, industry news, upcoming trade shows, and trade trends.

Apparel: With the advent of internet, apparel sales have started to move online. How did Alibaba.com help to shape the growth of sales and fashion in the apparel industry?

SD: Apart from the leading organized players in the industry, several small and medium sized apparel manufacturers have also become significant contributors to the total apparel exports of the country. The site analytics shows that Indian SMEs manufacturing products such as T-Shirts, ethnic clothing, garment accessories, underwear and men's shirts are more popular amongst international buyers (as of Q2 2010). Many small companies in the Indian apparel industry cannot afford to have expensive marketing strategies such as trade shows, magazines and sales offices. This is where B2B e-commerce platforms like Alibaba.com play a vital role as they can offer great benefits to Indian suppliers with limited or no investment. Suppliers can establish a virtual storefront on our platform and gain access to an active international buyer community – all without the hassle of traveling, making long-distance calls or hiring a marketing agency. Moreover, we provide a wealth of information related to international trade to keep our users up-to-date on the latest industry news and trends. Buyers can use Alibaba.com to view supplier storefronts and product listings in more than 40 industry categories and over 3,500 product categories by keyword searching or browsing through our online industry directory. Both international and domestic suppliers can host their company profiles and catalogues in standardized “online storefronts” and post trade leads on our platform. This helps companies especially small businesses save a lot of resources from building corporate websites to promoting products and services online.

Besides aggregating a huge online community, a comprehensive e-commerce platform like Alibaba.com will also be equipped with real-time communication tools and
Third-party services like authentication and quality control.

Apparel: What are plans for future growth and business prospects? Which markets do you want to explore and why?

SD: India is a very important market for us because it has a large smaller enterprise population, a robust domestic consumption market and a rapidly growing export sector. With about 26 million SMEs in India, we believe we still have a lot of room to grow. It is now our largest supplier market after China and our commitment to our Indian members is stronger than ever. Our priority will be to continuously educate Indian SMEs about the power of the Internet so more of them will turn their business online. The e-commerce ecosystem in India is growing in sophistication, which raises the awareness and acceptance of e-commerce by sellers and buyers in large cities as well as smaller towns. An increasing number of SMEs even from smaller cities like Jamnagar and Bhavnagar have also registered on Alibaba.com in the past year. Through our extensive sales and customer services force in India, we are committed to further growing the market and helping more SMEs in small towns to get online. Commenting on the Indian operations, David Wei, Chief Executive Officer at Alibaba.com, said, “The growth of the Indian marketplace has been impressive. Indian small businesses are savvy and they understand the advantages that the internet can bring to them both in domestic and foreign trade. India is one of Alibaba.com’s largest markets and we wish to enhance our customer service and support for our Indian members in line with their evolving needs. The local customer service operations will enable Alibaba.com to work with our customers more closely, helping them grow faster, providing new jobs and fostering economic growth.”

Parimita Chakravorty

1 comment:

Kerry said...

One other bit of trivia that I thought was quite interesting was that one of the reasons the name "Alibaba" was chosen because it's easy to pronounce in most languages.

You don't tend to think about that kind of thing, at least I don't, but it's actually quite important. For a platform that aims to connect manufacturers and suppliers with buyers across international boundaries, the name has to be catchy and easily pronounced in dozens of different languages, not just one.