When people ask me how I first decided to start Alibaba.com, I tell them the story of the conference I spoke at in Singapore in 1999. I arrived at a conference on the Internet in Asia expecting to learn from others working in the Internet industry in Asia. So I was surprised to learn that all of the other speakers were from western Internet companies and all the talk was about the Internet in the US.During my talk on the panel, I said to the crowd, "Wait a minute! Asia is Asia. The US is the US. The US model will not always work in Asia. And the Asian model will not always work in the US." I still believe this today. Take the Olympics as an example. Teams from the US play basketball. Teams from China play ping-pong. At the end of the day, no matter which sport you play, the prize is still the same. A gold medal is a gold medal. We believe Alibaba.com has grown out of an Asian business model. From the day we started Alibaba.com we wanted not to be the largest B2B site in China. We wanted to be the largest B2B site in the world.
So what does this mean for Internet entrepreneurs in Asia? The best ways to look at how models will differ is to look at how the people and environments differ. That's where we can find the opportunities to build businesses with an Asian model in mind. For a B2B company like ours, here are some of the main differences:
Business-to-business in Asia is much more relationship-based. There is a lot of talk among analysts about how B2B can't work in Asia because businesses are too tied to relationships. According to these arguments, customers are not willing to use something as impersonal as the Internet for business. I tell these analysts, I agree-if you simply import the western models. Many western B2B sites are very cold, impersonal and technical. No wonder they don't work in Asia!My advice-even in B2B-is to think of your member as a person rather than just a customer. Everything we've done, from brand to our product features is very people-oriented. In fact, we think our model is better described as "businesspeople-to-businesspeople." We have issue forums, human customer service representatives and human editors who screen trade leads. Rather than just a "platform" or "solution", we've tried our best to build community.
The West plays basketball-China plays ping-pong
Lead the technology race-but don't beat your customers to the finish line. Another issue we've seen with Western models is that they are often very technologically advanced-too technologically advanced, in fact. It is one thing to design a technology in Silicon Valley with high speed fiber-optic Internet access. But is this type of technology appropriate for developing countries where the speed is still too slow? So in Asia it is important to be prepared to introduce the latest technologies to customers but not get too far ahead of them.I'll give an example. Recently we developed an e-Document system for our customers to manage their trade documents. We debated a number of different technologies. Even though Applets are more advanced in some ways, we chose to use Servlets to process the basic functions. The reason? Servlets are processed on a central server which is not hampered by Internet speeds.Applets depend on the speed of the user's connection, as more information needs to be downloaded. The Applet system may work better in high-speed Internet areas. But we were building a platform for members in 200 countries, including developing countries in Asia. So we built with our customers in mind, rather than just our tech team.
* Keep it simple. In our own company documents, we put "simplicity" as one of our four corporate values. In fact, a lot of people look at our website and say it is too elementary. But what people forget is that to a lot of our members, the Internet is still new. We'll advance as our members advance. But in the mean time we want to help ease managers at small and medium-sized enterprises into the Internet. Simplicity is key in Asia.
* Don't make your website dependent on transactions. Unfortunately too many B2B and B2C sites have made their entire business model too dependent on transactions online. But with payment, fulfillment, and customer trust still developing, companies need to have short and medium term plans. In the US, Amazon.com conducts hundreds of thousands of transactions each day. That is not likely in Asia any time soon. At Alibaba we say we have a revenue plan for today, tomorrow, and the day after tomorrow. Today we focus on offering online marketing services to members, which we charge a small fee for. Tomorrow we will focus on revenue sharing agreements with third party service providers. The day after tomorrow we will focus on transactions. The analysts from the west will tell you transactions are the Holy Grail and you need them today. But sometimes you need to educate them about the on-the-ground conditions and prove you are building valuable relationships while you work to make transactions a reality.
* Look to the West for partners. Despite all of my talk about the Western players, I would not argue that the Asian model is better than the Western model. The models are different for different markets, even though the companies themselves may be totally global in staff make up. My best advice is to first make yourself strong in your home market. Then look to the West for partners and synergies. While you're making yourself strong, build your brand outside your market so that partners recognize you. Accept interviews with leading foreign publications. Make yourself an industry expert and speak at conferences around the world. Then, when it comes time to find a partner, you'll have much more credibility.
Jack Ma is CEO and founder of Alibaba.com (www.alibaba.com), the world's largest marketplace for global trade and host to one of India's largest trade communities.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.
