The strategy of Alibaba Group Holding sounds deceptively simple and it’s hard to see how Americans wouldn’t eat it up.
Here it is in a nutshell: “We want to make it easier for small American businesses to sell stuff to Chinese people.”
Alibaba’s billionaire founder Jack Ma is traveling around the U.S. this week to outline his company’s global ambitions. But the best part is, he’s inviting Americans to join the party.
Oh, and what a party!
Alibaba, China’s largest online marketplace, wants to more than double last year’s sales of $440 billion and sell $1 trillion of goods through its platforms by 2019, surpassing Wal-Mart Stores. That’s just four years from now.
“Our vision is in 10 years, we will help two billion consumers in the world shop online,” Ma told members of the Economic Club of New York Tuesday at a Waldorf Astoria luncheon. “Our globalization will still be focusing on helping small businesses and helping them do business in the most efficient way.”
Alibaba seeks to generate 40% of revenue from outside China, compared with 2% today.
“The opportunity and the strategy for us is helping small business in American go to China sell their products to China,” said Ma. “In 10 years, more than a half billion Chinese people would be in the middle class.”
Middle-class Chinese are eager to buy goods from abroad, he said. Cross-border purchases by China’s online shoppers have grown tenfold since 2010, from less than $2 billion to more than $20 billion in 2014, he said.
“Chinese consumers shop online for high-quality goods of all kinds, including fresh food, baby products and cosmetics — and they want these products from places like the U.S. and Europe,” Ma said in an piece he wrote for The Wall Street Journal to introduce his American trip. “They buy seafood from Alaska, pork from Iowa, children’s toys from Rhode Island and sports gear from Oregon and Maryland.”
“We’ve already seen some early cross-border successes,” wrote Ma. “I am especially proud of our work with American farmers. In 2013, for example, farmers in the Pacific Northwest sold 180 tons of cherries to China via Alibaba’s platform. It set off a cherry frenzy in China, and sales in 2014 more than tripled, to 600 tons. This success can be replicated for other everyday purchases.”
Alibaba has more than 350 million annual active buyers on its ecosystem; in March there were 94 million monthly active users on its mobile platforms. Ma said the Chinese middle class is as big as the entire population of the U.S.
While often compared with Amazon, Ma said, “the difference between us and Amazon is we don’t buy and sell. We help small businesses buy and sell every day. We do not deliver our packages ourselves, though we have two million people who help (deliver) over 30 million packages per day … we don’t hold inventory, but we do have 350 million buyers.”
“We need more American products to go to China,” Ma said. “We have 100 million hungry people coming to buy every day.”
For videos of Ma’s talk go to