Empowering SMEs Worldwide: The Alibaba Story

1. Empowering SMEs Worldwide:The Alibaba Story Brian A. Wong Senior Director International Business Development and Marketing WSIS follow-up and implementation: Action Line Facilitation meeting "E-business“ May 2008

2. An Unlikely Story. . . Tea House Hangzhou, China

3. All About SMEs! • Big SME* market • In China : 42 million SMEs • In Europe: 23 million SMEs • In US: 22 million SMEs • Critical to global economy and trade • In China: 58% of GDP, 68% of import and export volume, 75% of employment • In Europe: over 50% of GDP, 60% of employment, over 100 million jobs • In US: over 50% of GDP, 67% of export volume, 67% of employment * SME means all employer firms, self-employment nonincorporated and incorporated.

4. The Importance of SMEs in Developing Countries SMEs arethe driving force in many economies… • Engine for job creation; • Positive role in poverty alleviation; • Cover almost all (productive) sectors; • Are a main source for new products; • Diversify the economy and introduce flexibility

5. Challenges in Developing Countries for Ecommerce But are they fully utilizing the technological tools available to prosper in the global economy? • Few fully utilize Internet and e-commerce: ICT not used in sales prospects or purchasing efficiencies. • Lack of online payment logistics: perceived difficulties in introducing online financing and payment, and customs collection and taxation applications. • Lack of trust on demand side. • Lack of awareness even among TPOs: less than half TPOs canvassed indicated a specific e-trade component in their national export development strategies. Source: International Trade Centre www.tradeforum.org/news/fullstory.php/aid/234/E-Trade_Opportunities:_Are_Developing_Countries_Ready_.html UNCTAD Information Economy Report 2007-2008

6. OPENSESAME\Presentations\Analyst Presentation\Analyst Presentation (08.27.07).ppt 12/03/2014 05:13 A New Gateway to Global Trade The advent of eMarketplaces has helped to address many of these issues. . . Challenges Solutions 5

7. OPENSESAME\Presentations\Analyst Presentation\Analyst Presentation (08.27.07).ppt E-Marketplaces: The Alibaba Approach . . . and Alibaba.com developed a particularly unique (yet simple) model A Hangzhou Teahouse • A marketplace provides the “cups, tea and scenic surroundings” to facilitate match-making between buyers and sellers • Customers bring the products and ideas • User generated content (Web 2.0) For members, by members, of members “Small is beautiful” Jack Ma Chairman of Alibaba.com

8. OPENSESAME\Presentations\Analyst Presentation\Analyst Presentation (08.27.07).ppt Search/ Discovery Evaluate Negotiate Transact Traditional Sourcing Work Flow It addressed a key “pain point” for many buyers around the world. . . Average sourcing cycle: 3.3 – 4.2 months Source: The Aberdeen Group

9. eMarketplaces: a Window of Opportunities for SMEs . . . and in the process helped empower SME suppliers all over the world The eMarketplace Value Proposition: • Low entry barrier • Reduce business costs and time, particularly search • Streamline supply- and export-distribution chains • Brand building using cost effective media eMarketplaces empower SMEs to become global players without the resources of a multi-national corporation

10. Aligned objectives within public-private partnership Alibaba’s objective is consistent with the UN Millennium Development Goals (MDGs) Goal 8: Develop a Global Partnership for Development Target 18: In cooperation with the private sector, make available the benefits of new technologies, especially information and communications

11. OPENSESAME\Presentations\Analyst Presentation\Analyst Presentation (08.27.07).ppt Alibaba’s Vision Marketplace 让天下没有难做的生意 To Make It Easy To Do Business Anywhere Community 商人都要用阿里巴巴 To Be an Essential Partner to All Businesspeople Long Term Vision 建立一家持续发展 “102年”的公司 To Build a Company that Lasts “102 Years”

12. OPENSESAME\Presentations\Analyst Presentation\Analyst Presentation (08.27.07).ppt SMEs Spend More Marketing Dollars Online Growing SME Usage of Online B2B Marketplaces Online Share of SME Marketing Budget MM CAGR = 45.0% Source: iResearch

13. OPENSESAME\Presentations\Analyst Presentation\Analyst Presentation (08.27.07).ppt Global network at your fingertips A truly global network for importers and exporters of raw materials, component parts and finished goods Manufacturers Export e-marketplace Global Buyers Trading agents Manufacturers Import e-marketplace Trading agents Global Suppliers Retail shops

14. OPENSESAME\Presentations\Analyst Presentation\Analyst Presentation (08.27.07).ppt World’s No.1 Online B2B Marketplace for International & Domestic Trade Alibaba.com represents a phenomenon which is changing the way SMEs around the world conduct business Sellers Buyers International Marketplace 4.4 million registered users(1) • Typically SMEs • Ten to a few thousand employees • 5,000+ product categories in 30+ industries • Across more than 200 countries • Companies of all sizes • Diverse end markets China Marketplace 23.2 million registered users(1) Note: • Company data as of Dec 31, 2007 Note: • Company data as of December 31, 2007

15. Forbes Magazine“Best of the Web”2000 - 2006 Far Eastern Economic Review“Best Global B2B Marketplace”2000 US Entrepreneur Magazine“Best Website for Entrepreneurs”June 2004 HBS Case Studies2000 and 2001 A Premier Global Brand In a Different League from Its Peers… Recognition by Global Thought Leaders “Best sites for global entrepreneurs” • Business for Diplomatic Action • CIA’s World Fact Book • Economist Intelligence Unit • The World Bank’s Doing Business Database • U.S. Department of Commerce’s International Trade Administration • 14

16. Alibaba.com’s International Marketplace With over 4.4 million registered members from 200 countries & regions, it’s truly a global community UK 6% EU 9% India 8% China7% Canada3% US 18% South East Asia 13% Australia 3% Middle East 4% South America 3% 15

17. Integrated eCommerce Platform Search Taobao – C2C & B2C Alibaba China - B2B Shop Overseas Buyers/Importers Consumers Alibaba International - B2B Choose Transact Exporters China Wholesalers Retailers/ Power Sellers Pay China Wholesalers

18. One Stop Services for SME Exporters www.alibaba.com.cn (China Marketplace) www.alibaba.com (International Marketplace) Export to China Export to Globe SMEs Export to Japan New www.alibaba.co.jp (Japan Marketplace)

19. Alibaba.com partnerships Alibaba.com cooperates with leading organizations all over the world. . . and is looking for more partners including public-private partnership!

20. OPENSESAME\Presentations\Analyst Presentation\Analyst Presentation (08.27.07).ppt 2014年3月12日5时13分 Success Story: Pakistan Seller Amazingly, I got orders within five days from Europe after joining! I was really surprised to see such quick results with Alibaba After joining TrustPass, I started getting about 20 per week. Now, our customers cover from Italy, France, China, America, Ireland and Spain. “With Alibaba, we are worldwide!" Member: Mr. Hammad Kanwal Company: FASHIONS CARE Type: Manufacturer Size: 11-50 people Country: [Pakistan] Products: T-shirts, polo shirts, denim jeans, cotton gloves 19

21. OPENSESAME\Presentations\Analyst Presentation\Analyst Presentation (08.27.07).ppt 2014年3月12日5时13分 Success Story: Sellers(TrustPass members) We have been associated with Alibaba for two years, and since that time we have had a significant amount of serious enquiries. There is not a single day that goes by when we don't get enquiries routed through Alibaba. Alibaba's service is also an invaluable source of commercial news that not only provides information but also forecasts the rising trends in the global market. Being a TRUSTPASS member has seriously added more credibility to our business and increased our number of fraud-prevented customer inquiries. As a TrustPass member from India, we are extremely happy with the services Alibaba provides. We received our first buyer form Alibaba and there have been many more since. Today, we receive 80% of our business through Alibaba and we believe that this will only increase in future. “80% of Our Business Comes From Alibaba! Member: Mr. Moola Ram Potalia Company: TOWN AART Country: [India] 20

22. OPENSESAME\Presentations\Analyst Presentation\Analyst Presentation (08.27.07).ppt 2014年3月12日5时13分 Success Story: Big Buyers “The Woolworths China Sourcing Event was a great success. It allowed the Woolworths sourcing team to meet many quality new suppliers. Alibaba was very professional in its preparation and management of the day, leveraging its extensive knowledge of quality suppliers to target the right companies to meet our long-term sourcing needs.“ Alibaba.com Holds Private Sourcing Event for Woolworths Limited Woolworths Limited is the largest retailer in Australia, serving customers across the nation for over 80 years. Woolworths is one of Australia's top companies by market capitalization, with sales reaching A$42.5 billion in the 2006/2007 financial year. 21

23. OPENSESAME\Presentations\Analyst Presentation\Analyst Presentation (08.27.07).ppt 2014年3月12日5时13分 Success Story: SME Buyers "I have discovered Alibaba.com at Ambiente 2004 where the Alibaba team introduced me the company. I have since been using the website on a regular base (at least once per week) and I think it's a great sourcing tool. I find Alibaba very professional and easy to use. I searched and found many suppliers and I have also posted buy leads attracting quick and good quality responses from the suppliers." "I have also posted buy leads attracting quick and good quality responses from the suppliers." Customer: Mr Fernando Lomely Company: Genesis Ferran S.A. De C.V. Country: Mexico 22

24. Roadshow video “I’m an Alibaba member!” – 2mins • 23 • 3/12/2014 5:13 AM

25. OPENSESAME\Presentations\Analyst Presentation\Analyst Presentation (08.27.07).ppt Thank you! Brian@alibaba-inc.com