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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

http://www1.istockphoto.com/file_thumbview_approve/842499/2/istockphoto_842499_shrimp_cartoon.jpghttp://www1.istockphoto.com/file_thumbview_approve/842499/2/istockphoto_842499_shrimp_cartoon.jpghttp://www1.istockphoto.com/file_thumbview_approve/842499/2/istockphoto_842499_shrimp_cartoon.jpghttp://www1.istockphoto.com/file_thumbview_approve/842499/2/istockphoto_842499_shrimp_cartoon.jpghttp://www1.istockphoto.com/file_thumbview_approve/842499/2/istockphoto_842499_shrimp_cartoon.jpghttp://www1.istockphoto.com/file_thumbview_approve/842499/2/istockphoto_842499_shrimp_cartoon.jpghttp://images.google.com/imgres?imgurl=http://www.smfc.k12.ca.us/class/brewerisland/brown/Whale_-_Cartoon_4.jpg&imgrefurl=http://www.smfc.k12.ca.us/class/brewerisland/brown/project.html&h=225&w=215&sz=8&hl=en&sig2=KjLMancQUtKermF55fgxpQ&start=2&tbnid=e-GAPUglgv8yBM:&tbnh=108&tbnw=103&ei=AUmuRbDANLiQJICZ1dUL&prev=/images%3Fq%3Dwhale%2Bcartoon%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DGhttp://www1.istockphoto.com/file_thumbview_approve/842499/2/istockphoto_842499_shrimp_cartoon.jpghttp://www1.istockphoto.com/file_thumbview_approve/842499/2/istockphoto_842499_shrimp_cartoon.jpghttp://www1.istockphoto.com/file_thumbview_approve/842499/2/istockphoto_842499_shrimp_cartoon.jpghttp://www1.istockphoto.com/file_thumbview_approve/842499/2/istockphoto_842499_shrimp_cartoon.jpghttp://images.google.com/imgres?imgurl=http://www.mutantfrog.com/albums/Shanghai2003/teahouse.sized.jpg&imgrefurl=http://www.mutantfrog.com/gallery/slideshow.php%3Fset_albumName%3DShanghai2003&h=470&w=640&sz=122&tbnid=KMy0L1LkIaIJ:&tbnh=99&tbnw=135&hl=en&start=6&prev=/images%3Fq%3Dteahouse%26svnum%3D10%26hl%3Den%26lr%3D%26newwindow%3D1%26sa%3DG

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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

14

A Premier Global Brand

http://money.cnn.com/magazines/fsb

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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

http://help.alipay.com/support/help.htm

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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

http://www.alibaba.com/http://www.alibaba.co.jp/http://www.alibaba.com.cn/http://www.alibaba.co.jp/http://www.alibaba.com.cn/http://www.alibaba.co.jp/http://www.alibaba.com/

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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. . .

http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.chinapost.gov.cn/http://www.infomediaindia.com/index.phphttp://images.google.co.uk/imgres?imgurl=http://www.capenergies.fr/images/membres/institutions/logoUBIFRANCE.jpg&imgrefurl=http://www.capenergies.fr/index.php%3FMembresinstitutions&h=220&w=591&sz=32&hl=en&start=1&sig2=n6KBQ4BVVTcqL4MR-6ciIw&um=1&tbnid=w0vL7MVVXSWR1M:&tbnh=50&tbnw=135&ei=uxULSMiSH4XIwQG-s7GhDA&prev=/images%3Fq%3Dubifrance%26um%3D1%26hl%3Den%26sa%3DNhttp://www.aig.com/gateway/homehttp://www.xe.com/fx/?AdTracking=/alibaba/partnerservices/

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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.

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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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4/27/2012 11:33 PM 23

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!

Brian@alibaba-inc.com

http://www.alibaba.co.jp/http://www.alibaba.co.jp/http://www.alibaba.co.jp/