Sourcing Soul Mates

Although millions of singles have turned to the Internet to find their romantic soul mates, until recently, "matchmaking"  for businesses remained a face-to-face proposition. For a society that’s quickly become accustomed to the fast pace of digital communications, the lag time in manufacturing and sourcing has been a surprise. The tide is about to turn, though, if Alibaba.com has its way.

Just like its fictional namesake, Alibaba.com has quickly learned the magic words that have opened up a cave of treasures. In eight short years, the corporation has become an international powerhouse. Not only is it known as the world's largest business-to-business marketplace for importers and exporters, the entity also operates AliPay (China's leading online payment system), TaoBao (China's top consumer-to-consumer website), and Yahoo! China (no explanation necessary, I'm sure).

Jack Ma, Founder of Alibaba.com

Alibaba.com was founded by Jack Ma in 1999 in Hangzhou, China. The English-language website primarily serves small-to medium-sized businesses, including many in the intimate apparel industry. The portal boasts over 3 million members from more than 200 countries and territories, and has in excess of 500,000 visitors daily. Simply stated, Alibaba.com introduces businesses to one another.

          Alibaba's Trade Manager feature allows companies to conference, buy, and sell in real time.

What  Are the Magic Words?

With the company's roots in Hangzhou, it’s no surprise that many of Alibaba.com's sellers are located in mainland China. The site quickly realized that not only was there a language barrier for many of its users, but also a deep concern about how two unacquainted companies on opposite sides of the world would be able to trust one another. To add another level of assurance, Alibaba offers a paid service to mainland Chinese exporters that distinguishes them with "Gold Supplier" status. In order to qualify, users not only have to pay a $5,000 - $ 10,000 membership fee, they also must undergo a "rigorous authentication and verification procedures by third-party credit reporting agencies," intended to boost their credibility in the online marketplace.

For companies headquartered outside of mainland China, there is the "TrustPass" ranking, which signifies a paid membership that starts around $589 per year. It also requires a verification process. According to the website, the background check pays off. "More than 85 percent of buyers on Alibaba.com prefer to do business with TrustPass members only." For nervous North American buyers, the assurance that a company truly exists and that the contact person listed on the website is indeed an employee can open up a whole new world of suppliers. "In the intimate apparel [business] especially, there are a lot of niche designers and manufacturers that have their label, their own design – and so a lot of these entrepreneurs find Alibaba very useful". Porter Erisman, vice president of marketing, notes.

Once two companies have chosen to do business with each other, Trade Manager can eliminate the communication barrier. The free, downloadable chat tool allows members to conference, buy and sell in real time. Since it's often difficult to coordinate contact times between North America and Asia, Alibaba programmed Trade Manager to put users in touch whenever both parties are online – even if they're away from the office. Members can also archive trade records to keep track of their leads and inquires.

Trade Manager also offers live audio and video functions – making it easy to hear and see colleagues around the globe – and allows users to send documents and photo files without size limits.

For many small businesses, travel to Asia is cost-prohibitive… as is the cost of not doing business overseas. For just that reason, the ability to utilize live chat, audio, and video communications are a huge part of Alibaba.com's worldwide success.

It's Time to "Open Sesame"!

Even so, it's not all electronic. Recognizing the value of human interaction, Alibaba has begun hosting mixer events in the United States. For the past five years, the company has hosted similar events in China, but only at recently broadened the idea globally both to provide educational opportunities for people interested in the site and "open door" or like-minded businesspeople.

"You might meet online, but you get married offline."
-Porter Erisman

Many of the networking events are held during exiting trade events and expos.

Although large trade show (like MAGIC) already offer a lot of exposure to untapped businesses resources, the aptly named "Open Sesame" events offer a more congenial atmosphere and seem to be a welcome break from the hustle and bustle of the show floor. Without having to set up appointments, attendees have an opportunity to get workable advice from others in the industry and to meet new people with whom they may otherwise have never connected.

IAB attended one of the websites "Open Sesame" parties at MAGIC in 2006. Designed to bring members face to face, a group of diverse attendees mingled for a while and then participated in a lively business card swapping icebreaker game designed to encourage unlikely business connection. After a well-appointed cocktail hour (complete with live music and hors d'oeuvres), an Alibaba.com rep got the short presentation underway. Attendees listened attentively to an overview of the website and several testimonials from Alibaba.com members.

One user,Valerie Bent, founder of  Big Feet Pajama company, was happy to share how Alibaba.com enabled her to find a manufacturer in China-even as a start-up with little experience in the overseas sourcing. After a successful production run, Big Feet Pajama Company took off. Bent's rooted Pajamas for adults were even featured in a popular awards show's swag bag that same year.

How Do I Avoid Getting Trapped Inside?

In spite of the site's rankings, all members of Alibaba.com are reminded to put forth their due diligence. Communication is vital to make sure that both parties are comfortable and can conduct business that will be satisfactory to one another.

Some users have called Alibaba.com an "eBay for business- to –business transactions."

Erisman likens it more to be the matchmaking analogy.

"We are more like a dating site,"he says. "We can help buys and sellers meet each other online. We even help them with communication tools online, which are all free, so they can chat with each other and show products on live video. But, in terms of arranging the meetings and these offline activities, that's something that the buyer and seller really should work out on their own. They know best what they want and who they want to be with. You might meet online, but you get married off-line."

 Reprinted with compliments of Intimate Apparel Business magazine