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You may be among the great majority of folk who have never heard of an e-commerce company named Alibaba. Even so, I’ll bet that you have bought something sourced through them.
Alibaba is a giant Chinese company, which started out as B2B (business to business) only. It puts retailers in touch with wholesalers, wholesalers in touch with manufacturers. You need to appreciate the scale in order to see its importance, so in the interests of research, I had a quick hunt round the site for aluminium windows, a subject currently uppermost in my mind. A quick search took under two seconds, and I had a list of (nearly) 194 thousand products. The very first manufacturer in the list could provide me with 1800 tons of aluminium window frames per month. At prices a few percent of the price here in Christchurch. Only catch: the minimum order is 100 tons. That’s a lot of windows.
And the same goes for anything you can imagine buying. From giant tractors to toys, from electronic components to sewer pipes, from fresh watermelons (from Bulgaria), to watermelon seed-removing machines – despite a lot of trying, I couldn’t think of anything saleable that wasn’t listed. (ed’s note: Me neither!)
Alibaba has branched out from its B2B roots, with retail channels (aliexpress.com), finance companies, advertising and marketing agents and electronic payment processing.
Is it the biggest ecommerce site in the world? Depends how you measure it. But in September last year it had the largest IPO (Initial public offering) when floating on the stock market in history; larger than Google, Facebook and Twitter combined.
The author, Porter Erisman, is an interesting character. He’s an American, who before working for Alibaba in China worked for Ogilvy and Mather as a marketing specialist. He joined the company soon after its founding by a team of 18, led by one of the most intriguing people I have read about, Jack Ma (more on him shortly).
Erisman was Alibaba’s first western employee, and rose to be Vice-President, before leaving the company in 2008. He is a real insider, and describes in vivid detail the rise of Alibaba from a struggling start-up to a behemoth. Erisman was in a position to see the struggles Alibaba had with misguided western advisers, patronising western companies and governments, and the unpredictable Chinese government, who initially had no idea how to deal with e-commerce at all. It’s an exciting ride. The author was right in the inner circle of Alibaba’s management, managing its international operations. As well as this book, he wrote and directed the 2012 documentary film, Crocodile in the Yangtze, which covers the same ground.
But for me the most interesting character in the story is Jack Ma. A short, initially diffident man, Ma must be unusually driven. He failed, twice, his entrance exams to Teachers’ College, but eventually graduated as a teacher of English. To learn English he listened to American radio, and became a free tour guide to visitors. His determination comes through on every page of the book.
It was not always plain sailing – indeed Jack Ma has had as many falls and rises as Reggie Perrin. The global financial crisis was just one of the events which nearly destroyed the company.
This is not a stereotypical business book. It’s brisk, fast moving and jargon-free. It gives an insight into the way Chinese business works, and how it relates to the Western world. Just how typical the company and the people are is an open question. One thing is certain: Chinese businesses such as Alibaba are becoming a force to be reckoned with.
Reviewed by Gordon Findlay
Alibaba’s World: How a remarkable Chinese company is changing the face of global business
by Porter Erisman
Published by Macmillan