Alibaba Group Executive Chairman Jack Ma may be the chief of the world’s largest e-commerce company by sales volume and a multi-billionaire, but he hasn’t forgotten what it’s like to run a struggling company.
Before he launched Alibaba in 1999 in his apartment in Hangzhou, China, Ma said he started a translation agency. “It was difficult,” Ma told a crowd of about 300 American small business owners at a forum sponsored by American Express in Chicago today. “My rent was $300, my first month of revenue was $50. It was tough to survive and nobody helped us. I tried to borrow $3,000 from the U.S. banks, but no one would give us the money. It’s so difficult to run small business.”
Since then, Ma has operated with an eye toward helping small companies succeed—and it’s been a lucrative strategy. Alibaba Group recorded $394 billion in gross merchandise volume for the year through March 2015 in large part by hosting 10 million Chinese small businesses that sell on the company’s online marketplaces.
Now Ma says he wants to add another 10 million small businesses to Alibaba’s roster by positioning Alibaba as a sales channel for U.S. companies that want to reach China’s rising middle class, which is already the size of the U.S. population and is expected to double in seven years.
“I think it’s simple,” Ma told small business owners during the forum, which was hosted by American Express Chairman and CEO Ken Chenault. “[Create] innovative products and services and bring them to China. China in the next 10 years will become the largest importer in the world. We have to do importing to serve 1.3 billion people. And I’m thinking guys—just test it! We can guarantee 100% for sure if you sold the things you’ll get the money back in time quickly.”
Read Jack Ma’s Wall Street Journal op-ed here.
Alibaba currently makes about 2 percent of its revenue from outside China. Ma wants to increase that to 40 percent. The company could surpass WalMart, the world’s largest retailer, in total sales this year, and Alibaba aims to sell $1 trillion of goods through its platforms over the next five years, Ma said.
To reach those goals, Alibaba needs to knock down some of the barriers that impede international e-commerce by making it easier and faster to ship online orders and to pay for goods in different currencies. Alibaba-related companies include logistics provider Cainiao and e-payments provider Alipay, which are expanding their international operations. “Our mission is to help others make e-commerce better,” Ma said. “If you want a payment, Alibaba will help. If you need customers, we will help with logistical problems. We are the e-commerce enabler.”
Ma added: “I want to make a bet, small business always makes a bet. In 5 years, we will sell 1 trillion U.S. sales. That is going to be done not by Alibaba, but done by small business. How can we empower them, and sell with them.”
Ma and Chenault had more to say on the importance of small businesses and boosting commerce between China and the U.S. Watch the video highlights:
THE CHINA MARKET OPPORTUNITY
MA’S ADVICE FOR SMALL BUSINESSES
ON OVERSEAS MARKETS
ON GLOBAL E-COMMERCE