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Alibaba has big plans for small US businesses

By Amy He (China Daily) Updated: 2015-06-11 10:32

Alibaba has big plans for small US businesses

Jack Ma, Founder and Executive Chairman of Alibaba Group addresses the Economic Club of New York at the Waldorf Astoria Hotel in the Manhattan borough of New York City, June 9, 2015. [Photo/Agencies]

E-commerce platforms can empower them to reach millions of consumers in China, Ma says

Alibaba Group Holding Ltd's Jack Ma said that the future of the e-commerce giant is to go global, opening up its platform to enable more small businesses in the United States to sell directly to China's middle-class consumers.

The company's chairman and founder said that Alibaba's goal is "not only to sell more things", but to globalize the infrastructure of e-commerce.

"Why did Internet e-commerce grow so much faster in China than in the US?" he said on Tuesday. "Because the infrastructure of commerce in China was bad. Unlike here, where you have all the (physical) shops: Wal-Mart, K-Mart, everything, everywhere. But in China, we have nothing, nowhere. So e-commerce in the US is just a dessert; it's complementary to the main business. But in China, it's the main course."

Ma made his remarks about the company's future before an audience of about 1,000 members of the Economic Club of New York at the Waldorf Astoria New York. He was introduced by William Dudley, chairman of The Economic Club and president and CEO of the Federal Reserve Bank of New York.

Ma, who founded his company in 1999 out of his apartment in Hangzhou, said that Alibaba is on target to sell $1 trillion worth of goods within the next five years. Alibaba's gross merchandise volume for the year through March 2015 was about $393 billion, an increase of 46 percent over the previous year.

He emphasized that small businesses in the US were the path to growth for the company, luring them toward China's middle class, which today is almost as big as America's entire population, and in a decade will grow to half a billion people.

"The demand for good products, good service, is so powerful, so strong," he said, adding that only 2 percent of Alibaba's business is conducted outside of China and he hopes it will grow to 40 percent.

Ma said that Alibaba can help another 10 million businesses through its e-commerce platform.

"We will empower them, give them the traffic, give them the payment system, give them the logistics, so that they can do business anywhere, easily," he said.

The company wants to provide customers 72-hour shipping for those purchasing from outside of China and 24-hour delivery for those within the country.

China, he said, has been focused on exporting for the last 20 years, but should now focus on importing and making more purchases.

"China should learn to buy. Chinese should spend money. China should buy a lot of things," he said.

According to company figures, cross-border transactions by Chinese online shoppers grew 10-fold between 2010 and 2014, from $2 billion to $20 billion.

There are about 331 million online shoppers in China, and e-commerce is expected to account for more than 20 percent of Chinese consumption by the decade's end.

"In China, e-commerce is a lifestyle. Young people are using e-commerce to exchange ideas, to communicate, to build up trust, to build up a record. It's just like Starbucks, you never go to Starbucks to test how wonderful the coffee is. It's a lifestyle. This is how Internet e-commerce is changing China," Ma said.

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