Last week Alibaba and Jack Ma, (Chairman Jack Ma that is) arranged to host a Gateway 17 conference in Detroit, Michigan. It was the first time Alibaba has hosted such a conference outside of China. ‘Gateway ’17 is Alibaba’s road show to promote greater U.S. exports to China, where a growing middle class — already some 300 million or more strong — is showing an insatiable appetite for consumer goods.’ From the Detroit Free Press
The purpose was to sell American small business on the ‘Chinese Dream’.
I note that Alibaba ‘still’ wants to win in the U.S. and that’s in part because it’s been kind of trying on and off since at least 2010. Full disclosure – Alibaba was a former client of our company back in 2011 and 2012. Our work was on the business-to business-side. That time coincided with the huge growth Alibaba.com’s consumer platforms Taobao and Tmall and to us it seemed like Alibaba’s enthusiasm on strategic sourcing in China and Asia for U.S. businesses was lukewarm.
This past Monday evening my friend Michael Zakkour of Tompkins International (and Forbes contributor) proceeded to give a very interesting talk at SUNY’s Confucius Institute for Business. It centered on Gateway 17 as well as other a good amount of considerations related to China. The talk was entitled “The Road to Global Leadership: How China is Using Diplomacy, Steel & Technology to Create the Chinese Dream”.
While I do my best to keep up with China-market related activity the fact is that I have not been in China in four years. Which in China is more like 10+ years at the rate of change I had experienced there prior. Michael discussed the desire expressed on the part of Mr. Ma (now the richest man in Asia to be even more than what many Americans think – ‘The Amazon of China’. Mr. Ma has far higher aspirations than that. Alibaba.com touches Chinese consumers as well as non-Chinese in so many aspects of daily life from shopping (Taobao, Tmall) to payment platforms (Alipay is a giant platform).
“When you get a feel of being successful, problems come,” he said. “We know only if our customers succeed, we will be successful. Serve the people, that was what I learned.”
So why now? Why will this effort to reach U.S businesses be more successful than Alibaba’s efforts in the past? After all Mr. Ma has promised President Trump that he will create more than 1,000,000 jobs in the United States.
According to Bloomberg (and also to Michael Zakkour) it’s for several reasons including creating markets outside of China as believe it or not the growth prospects for Alibaba in China are not quite as bright as they’ve been in the past fifteen years. Mr. Ma wants to help American businesses reach the more than 500 million Chinese consumers (and growing). In Chairman Ma’s eyes when it comes to the future of Alibaba’s influence the world is not enough.
Will Alibaba’s renewed U.S. effort be successful? A big difference today from 6 years ago is that most Americans are familiar with Alibaba to some degree (i.e. China’s Amazon). I think it is dangerous to underestimate Jack Ma and Alibaba but success in the U.S. is far from guaranteed. Jeff Bezos is taking notes to be sure.