SAN FRANCISCO, Sept 27 (Reuters)
While U.S. companies flock to China in hopes of tapping its vast emerging market, the chief executive of China's biggest business-to-business Web sites has his eye on the United States.
"This is the first time we're aggressively targeting buyers," Alibaba CEO Jack Ma said in an interview with Reuters on Monday.
Last month, Alibaba launched an advertising campaign on the cable news network CNBC as part of its pitch to U.S.-based importers and exporters who want to do business with China but don't know how.
Despite the advertising splash, Ma isn't exactly starting from scratch in the United States. Some eBay PowerSellers - eBay's top sellers in terms of volume and positive feedback - already are tapping Alibaba's network of pre-qualified Chinese suppliers, he said.
Privately held Alibaba, based in Hangzhou in eastern China, was founded in Ma's apartment in 1999. For the time being, China-based suppliers pay fees to use the service, which is free to suppliers and buyers outside China.
The company's three online marketplaces boast more than 7 million registered users and hosted more than $3 billion in trade last year, Ma said.
Alibaba China is China's largest online marketplace for domestic trade. Alibaba International is its English-language site that hosts traders from more than 200 countries.
TaoBao - a consumer site now free to all users - is Alibaba's answer to eBay Inc. which is gunning for the China online auction market through its acquisition of locally grown EachNet.
Ma, who has been dubbed the father of the Chinese Internet, said he chose the Arabian Nights-inspired name for his e-commerce company because it is meaningful to people around the world. He said the name stuck after a San Francisco waitress replied "Open, Sesame!" to Ma's request for her thoughts when he said "Alibaba."
Ma predicted that TaoBao, which means "digging treasure" in Chinese, will bump eBay's EachNet from the No. 1 spot. EachNet, which has fees for sellers, is the only company now charging users.
He dismissed Yahoo Inc.'s online auction venture with Chinese media firm Sina Corp., saying it is not even in the running.
With Web usage among China's more than 1 billion residents rising rapidly, Ma predicts he could have 300 million Chinese users within five years. To put that in perspective, the population of the entire United States is about 280 million.
But as any good Internet company knows, legions of users mean nothing if a company can't get out of the red.
To that end, Alibaba says it is profitable and is forecasting 2004 revenue of $45 million. Meanwhile, its TaoBao operation is a different story.
"In China we think it's almost impossible to make money in C2C," said Ma, referring to the consumer-to-consumer e-commerce market where TaoBao operates.
Ma added that he does not expect to make money from that still immature sector for at least two years.