South China Morning Post - Hong Kong, 18 February 2008, By David Wei, CEO of Alibaba.com
As a major facilitator of globalisation, the internet is levelling the playing field and creating new opportunities for businesses at the grassroots level. It has made the world flat, as author Thomas L. Friedman argues, and in my opinion, fairer. It is tipping the balance towards small and medium-sized enterprises (SMEs) and away from big corporations, and it is happening in emerging markets such as China as well as established economies such as the United States.
Traditionally, buyers found a trading partner by digging through trade catalogues and magazines or attending expensive trade fairs. Large firms might choose to set up sourcing offices in Asia and use trading agents, yet this was not affordable for most SMEs. Online marketplaces have changed all that by bringing buyers and sellers together to trade on the internet.
Companies looking to partner with low-cost manufacturers can now search in these virtual marketplaces to find suppliers, and contact them easily.
Today, SMEs in Germany can source products from India just as easily as they can from Frankfurt.
And it's not just about sourcing: online marketplaces help SMEs expand their market too. I recently learned of a small Spanish manufacturer of cleaning products which broke into the lucrative French market after discovering e-commerce - a market just on the doorstep of Spain that it had been trying for years to break into using traditional marketing channels.
It is no surprise to find companies that manage their business entirely on the internet. An example is a machinery and tool manufacturer in Zhejiang province. The firm receives 100 per cent of its orders online, and exports to Europe, America, Africa and Asia - all from a small office near Ningbo. E-commerce has made it possible for firms in remote rural areas to trade with customers from places they have never been to.
It has allowed the emergence of a new breed of entrepreneurs, such as Jane Ivanov, a mum-turned-entrepreneur from Indianapolis.
Three years ago she saw a market for fashionable maternity lingerie, and decided to launch her own brand, Eve Alexander. Her dream was realised after she found the right manufacturer from Hong Kong through the internet and e-commerce. The Eve Alexander brand is now sold through more than 100 maternity boutiques, hospitals and online stores in the US, Canada, Europe, Australia and South Africa.
The next breakthrough in e-commerce will be services beyond trade, services that can help SMEs solve almost any business issue. For example, in November last year, Alibaba.com entered into a partnership with Industrial and Commercial Bank of China and China Construction Bank to provide cheap and efficient business loans to SMEs on the mainland.
The programme has given hundreds of SMEs more than 150 million yuan worth of loans based on their online transaction record.
Globalisation is no longer just the realm of big business - it is for everyone, from every country. By embracing e-commerce, these SMEs are growing their business, hiring local staff and making money, and this in turn benefits their local communities and economies.
The internet opens new doors to trade without regard to geography or distance or even language. It helps SMEs take advantage of globalisation and turn it into a good word for everyone.
As in previous years, anti-globalisation supporters took to the streets at the just concluded World Economic Forum in Davos. They think globalisation benefits multinationals at the expense of small businesses, developing countries and the poor.
I disagree because I have seen the rise of entrepreneurs and SMEs who are benefiting from globalisation and the internet.
