Alizila - E-commerce News & Commentary from the Alibaba Group

Alibaba Bids to Privatize B2B Unit

Jim Erickson — Tue, 21 Feb 2012 12:41:17

Alibaba Group, China's largest e-commerce company, and its publicly traded subsidiary, Alibaba.com, today announced that the Group has proposed a privatization offer to acquire the minority stake in Alibaba.com it does not already own for about $2.45 billion.

Alibaba officials explained in a press release they want to take Alibaba.com private amid an ongoing effort to refocus its business strategy. The online trading company, which helps small businesses use the Internet to find products and suppliers in China and around the world, last year began reducing its emphasis on aggressive membership growth and instead focused on providing a higher-quality user experience. The company warned the changes could affect the firm's financial performance and stock price in the short- to medium-term.

"Taking Alibaba.com private will allow the Group to make long-term decisions that are in the best interests of our customers and that are also free from the pressures that come from having a publicly listed subsidiary, such as market expectations and earnings visibility," said Jack Ma, Alibaba Group chairman and CEO, in the release. "With this offer, we can afford our minority shareholders a chance to realize their investment now at an attractive cash premium rather than staying invested in the company during this period of transition." Ma founded Alibaba.com in 1999 and is its chairman.

Officials said the privatization is unrelated to Alibaba Group's on-again, off-again negotiations with Yahoo! to buy back all or part of Yahoo's 40 percent stake in the Group.

Hangzhou, China-based Alibaba Group owns more than 73 percent of Alibaba.com. The private company, which also owns China's largest online shopping sites, Taobao and Tmall, is offering to pay HK$13.50 a share for Alibaba.com stock held by the public. The offer is 60 percent higher than the stock's 60-day average closing price of HK$8.42.

Trading in the stock was halted on Feb. 9 ahead of the announcement of the privatization plan. Shares are expected to resume trading on Feb. 22. The stock closed Feb. 8 at HK$9.25.

The offer of $13.50 a share is equal to the initial offering price when Alibaba.com went public in Hong Kong on Nov. 6, 2007. By comparison, Hong Kong's Hang Seng Index on Feb. 20 was about 27 percent below its level at the time of the Alibaba.com IPO.

The privatization bid comes as Alibaba.com's business is increasingly challenged by slowing revenue growth and contraction in its base of members who pay an annual subscription fee to market products on the platform.

According to the company's annual results released today, total revenue last year grew 16 percent to $1.02 billion, compared with annual growth of 38 percent in 2010. Total members fell 5.4 percent last year to 809,362, including a sharp 28 percent reduction in paying members using the company's international, English-language website.

The decline in membership is partly due to a drive by Alibaba.com to upgrade the trustworthiness of suppliers using the site. Following a scandal last year over scammers who used fake business licenses to join the website and defraud buyers, the company tightened its monitoring and verification procedures and ejected hundreds of members operating fraudulent online storefronts.

Alibaba.com has also been introducing more fee-based products and services to offset slowing revenue from annual subscriptions. That shift is eroding profit margins because it's more costly to generate business from services than from subscriptions.

Alibaba.com raised $1.7 billion in its 2007 IPO, which at the time was the biggest Internet IPO since Google was listed on NASDAQ in 2004. Alibaba.com stock soared to nearly HK$40 within the first 30 days of trading, but subsequently slumped to less than HK$5 during the global financial crisis.

Shares recovered along with global markets, but over the last 12 months, Alibaba.com shares have declined by more than 40%.

In a filing with Hong Kong's stock market regulators, Alibaba officials said the "depressed" share price reflected the implementation of the company's strategic plan, which "may continue to lead to a difference between investors' view of the company's share price and [Alibaba's] view of the company's potential long-term value."

The underperforming stock "may continue to adversely impact the company's business, reputation with customers and employee morale," the document states. Taking the company private is intended to give shareholders an exit "at an attractive premium—instead of assuming a different risk profile brought about by the new business strategy."

The privatization would also allow for more cooperation and strategic flexibility among Alibaba Group companies, officials said.

Alibaba officials said the offer price will not be increased, and under Hong Kong regulations the offer is final. An Independent Board committee of Alibaba.com has been formed to evaluate the proposal and will work with its own independent financial advisor to formulate recommendations to minority shareholders. A minority shareholder vote—Alibaba Group is not permitted to vote on the offer—is expected to take place in April.

Group officials said the privatization would be paid for with a combination of new financing and existing cash.

Officials also stressed that the privatization was not necessary to take Alibaba Group public. Officials repeated what they have said in the past: there are no plans for a Group IPO now and if it were to happen it would be several years from now.

Standard Chartered, Alipay Join Forces

Jim Erickson — Wed, 15 Feb 2012 19:27:32

Standard Chartered Bank (China) has agreed to offer Alipay's popular Express Payment service to its mainland customers as the country's largest electronic-payments provider continues to position itself for international expansion.

More than 100 Chinese commercial banks are already offering Express Payment (originally called Quick Pay) service inside China, which allows consumers to make payments for online transactions from their bank accounts through a simplified process. Standard Chartered, which is headquartered in London, is the first international bank to join the system.

Liang Minjun, senior manager of International Business in Alipay's Banking Cooperation department, said the collaboration with Standard Chartered "will not only increase Alipay's user coverage in China and bring a better online payment experience for Standard Chartered's card holders but also create a good demonstration for other international banks," adding it would also "lay a sound foundation for Alipay's cooperation with Standard Chartered in the global market."

Alipay holds a 49% share of China's e-payments market, which reached $349 billion in transactions last year, according to iResearch. While most of the e-payment processor's business is centered around purchases from Taobao and Tmall, two giant Chinese shopping websites that are affiliated with Alipay, the company has increasingly signed up overseas e-commerce sites and reached out to Chinese consumers in Taiwan and Hong Kong.

Alipay's Express Payment platform began supporting international transactions at the end of 2011. Chinese consumers can now make Express Payment purchases from Japanese and Korean e-tailers such as Sasa.com and Strawberrynet.com. The platform allows users to pay in China's currency, the renminbi (RMB), while supporting more than 10 other currencies including U.S. dollars and British pounds.

Liang said Alipay plans to work with all international banks that have Beijing's approval to conduct consumer banking in China. "At the same time, we will work with other international banks in cross-border express payment, especially in countries and regions with higher Alipay usership," he said in an e-mail.

To use the Express Payment service, Standard Chartered (China) customers will use their debit cards to complete Express Payment transactions. According to the bank, users do not need to register for online banking but must provide their debit card number, mobile phone verification code and other related information. Once approved, users need only their Alipay password and mobile verification code to complete transactions.

Taobao Wants Off USTR Counterfeits Blacklist

Jim Erickson — Tue, 14 Feb 2012 18:13:35

Citing its efforts to curb the online sale of counterfeit products in China, Taobao, the country's largest e-commerce website, has petitioned the United States Trade Representative (USTR) in a bid to be removed from the Washington agency's "notorious markets" list.

In a Feb. 10 letter to the USTR, Taobao outlined improvements the Internet company has made in monitoring the website for Chinese merchants selling fakes, detailed toughened penalties against merchants deemed to be violating website policies against pirated goods, and cited streamlined procedures by which American companies can complain online about intellectual property rights (IPR) violations, among other actions.

"Taobao has made significant progress over the last several years in ensuring that IP-infringing items are not sold on its web platforms," the letter states. The company said it removed 63 million IP-infringing product listings in 2011, and employs about 200 people to handle infringement complaints, work with brand owners and monitor product quality.

Read the letter here.

The letter was filed as part of the public commentary the USTR accepts in its annual Special 301 Review. The review monitors the enactment and enforcement of copyright, patent, and trademark laws throughout the world and results in a report identifying trouble spots.

Taobao has taken issue with its ongoing inclusion in the USTR's blacklist of notorious markets where the agency says counterfeits are heavily trafficked. "Taobao does not believe that USTR should continue to designate Taobao as a Notorious Market," the letter states, due to the company's extensive efforts to curb the sale of fakes on its website.

A spokesman for China's Ministry of Commerce last month complained that the USTR assembled the list without sufficient investigation, evidence and analysis. The spokesman, Shen Danyang, urged the USTR to "take into account China's effort for IPR protection and the progress made on it and to make a more comprehensive, more objective, more fair evaluation."

Alibaba.com VP On Global E-tail Opportunities

Jim Erickson — Thu, 09 Feb 2012 12:55:21

One of our favorite industry websites, Practical eCommerce, just published an informative Q&A interview with Brian Wong, Alibaba.com's global sales and service VP. For companies that are unfamiliar with Alibaba.com, Wong provides some good background on the giant B2B company.

In the Q&A, Wong also discusses the global opportunities that are increasingly available to companies via cross-border e-commerce and points out that Alibaba.com, while based in China, is a source of offbeat products made all over the world. "For example," says Wong, "there's lots of rattan – which is a bamboo product in Vietnam – whether it's furniture or handicrafts. India has great jewelry. Turkey has lots of different handicrafts there or even hazelnuts." Wong also talks about the growing possibilities for U.S. e-tailers to sell directly to Chinese consumers through Alibaba's sister C2C and B2C sites, Taobao and Tmall.

You can read the interview here. If reading is not your thing, there's also a podcast.

China's Online Ad Spend Tops Print

Jim Erickson — Fri, 27 Jan 2012 16:38:20

It's not news to U.S. newspapermen and women that the Internet has been munching their Lunchables. But the displacement of print media by digital isn't a trend confined to the wealthy West.

In China, too, dead-tree information dissemination is being dodo'd by a secular shift in advertising spending, offline to online. According to Beijing-based market research firm iResearch, revenue taken in from online advertising in China grew by 57% last year to RMB 51.2 billion, surpassing total revenue for newsprint ad spending (RMB 45.4 billion) on an annual basis for the first time. The three largest advertising platform providers last year in terms of revenue were all Web-based: Baidu, followed by Taobao and Google.

By predicting online advertising would continue to outdistance print in 2012, iResearch didn't go far out on a limb. But interestingly, this transition has been happening faster in China than elsewhere. In the U.S., online advertising spending is expected to grow 23.3% in 2012 to $39.5 billion, surging past total spending on print newspapers and magazines a year after China, according to eMarketer. In the U.S., print ad spend is expected to fall to $33.8 billion in 2012 from $36 billion in 2011.

China's Export Engine Continues to Sputter

Jim Erickson — Fri, 20 Jan 2012 16:14:31

China's export growth is slowing but the nation's factories aren't likely to be hit by a slump as severe as the one following the 2008 U.S. financial crisis, according to a report from Alibaba.com.

The e-commerce company's first quarter Export Trend Report, published this week, indicates China's exports will grow at an annual rate of about 12.4% in the first quarter, down from 14.2% estimated by China's customs agency for the fourth quarter of 2011. Overseas buyers using Alibaba.com to source products from China became less active in the last six months as global economies began to slow amid the turmoil of Europe's sovereign debt woes.

A sluggish global economy continues to weigh on exports, although the "situation is better than [during] the financial crisis in 2008," the report stated, citing below average export activity to Europe and slowing export growth to the U.S. Weakening sectors included food and beverages and chemicals, while machinery, personal care products and watches and jewelry showed signs of strength.

Findings in the quarterly report are based on Alibaba.com’s research into the sourcing activity of its 10 million registered international members, statistics from the customs agency and other data. Alibaba.com is developing the report as a leading indicator of the health of China's export sector and a tool to alert Chinese manufacturers to global market trends.

The report was in line with economic indicators released recently by the Chinese government and by HSBC. The customs agency said earlier this month that China's exports and imports grew at their slowest pace in more than two years in December. "Although the trade situation in the first quarter will be difficult, China's exports as well as imports will show stable and modest growth," said Shen Danyang, spokesman for China's Ministry of Commerce.

Meanwhile, preliminary results from HSBC’s China manufacturing survey showed little improvement in January, with weakness in output and new orders suggesting a deepening slowdown ahead. The Purchasing Managers’ Index "flash" reading came in at 48.8 on a 100 point scale, up from December’s final reading of 48.7, HSBC said Friday. The January preliminary number marks the third straight the index has closed below 50, which indicates manufacturing is contracting.

The total value of China's imports and exports finished 2011 at an all-time high of $3.6 trillion. China aims to increase foreign trade by around 10 percent this year, a much slower pace than 2011, as it faces a "grim" outlook for boosting exports, the official Xinhua news agency recently said.

Commerce Ministry Has Taobao's Back

Jim Erickson — Thu, 19 Jan 2012 15:27:02

Taobao, China's largest e-commerce website, is in the middle of a disagreement between China's Ministry of Commerce and the United States Trade Representative (USTR). According to a Jan. 19 Reuters News story, Beijing is objecting to the USTR's ongoing listing of Taobao as a notorious market for piracy.

During a news conference in Beijing, Shen Danyang, a spokesman for the Ministry of Commerce, said that China is "greatly concerned and strongly opposed" to Taobao being singled out as a haven for Chinese vendors selling counterfeit products.

"When referring to Chinese businesses, we noticed that the United States notorious market list would use terms like 'alleged' and 'according to industry information,' " Shen said. "With ambiguous terms and no conclusive evidence or detailed analysis, this is very irresponsible and not objective," Reuters quoted Shen as saying.

The USTR kept Taobao on its November notorious markets list despite the website's progress in purging its giant online marketplace of vendors selling fake cosmetics, clothing, consumer electronics and other copyright-infringing items.

Taobao's sister company, B2B website Alibaba.com, was recently dropped from the list after a drive to stem online piracy. The USTR also removed Baidu after the Chinese search-engine giant promised to stop serving up links to pirated music-download sites. Baidu last year began offering legitimate music through a licensing agreement with three major record labels: Warner Music Group, Universal Music Group and Sony Music Entertainment.

Following a major push last year to curb counterfeiting, China's government appears to be annoyed that its efforts, and those of Chinese Internet companies, aren't getting enough credit from politicians and bureaucrats in Washington. Shen's remarks came as tough new legislation designed to crack down on online piracy is making its way through the U.S. Congress.

According to the Reuters story, Shen urged the USTR to "take into account China's effort for IPR protection and the progress made on it and to make a more comprehensive, more objective, more fair evaluation."

Slouching Tiger, Inflatable Dragon

Jim Erickson — Wed, 18 Jan 2012 12:06:00

The year of 2011 was a tiger year, according to the Chinese calendar, and to be honest we are glad to see the big cat's hindquarters as it slinks out the door.

Bring on 2012. It's the Year of the Dragon, which is said to be auspicious for reputation and career. It is also auspicious for companies selling dragon-related bric-a-brac, apparently. Online marketplace Alibaba.com reports that in the previous quarter there was a big surge in searches for dragon-related products, like dragon-imprinted iPhone cases, on the website.

Searches for dragon products in the second half of 2011 soared by 250%, according to Michael Lee, director of international business development and marketing at Alibaba.com U.S. Among the most sought-after items? Alibaba.com says people are going crazy for inflatable dragons. Because they are fun in the bathtub? We have no idea.

Jack Ma Wishes Jerry Yang Well

Alizila staff — Wed, 18 Jan 2012 11:36:37

Jerry Yang, who helped turn Yahoo into one of the world's first successful Internet companies, has resigned from the company's board and will no longer be a part of Yahoo. Yang, 43, also gave up his board positions at Alibaba Group and Yahoo Japan, moves that could clear the way for Yahoo to reduce its stakes in its Asia partners.

Jack Ma, chairman and CEO of Alibaba Group, issued the following statement following the announcement of Yang's departure: "Jerry is a longtime friend with whom I have had a strong personal and professional relationship that has withstood some ups and downs over the past few years, and I have great respect for what he has built and I wish him well as he pursues a new chapter in his life. We look forward to continuing our constructive relationship with the Yahoo! board and leadership."

Tmall Changes Its Name

Jim Erickson — Wed, 11 Jan 2012 15:53:32

Chinese e-shopping destination Tmall.com has changed its name, continuing to distance itself from the B2C platform that spawned it, the sprawling Taobao Marketplace.

Tmall.com will now be marketed to mainland consumers as 天猫 (in pinyin, that's "tian mao," literally translated as "celestial cat") instead of 淘宝商城 (Taobao Mall). The company is keeping the Tmall.com moniker in English. The website's url—tmall.com—also remains the same.

Officials said the name change will help consumers better understand Tmall's positioning as a source of high-quality, brand-name products from merchants offering customer-service guarantees.

The move is the latest step in an effort to differentiate Tmall from the original Taobao, China's largest e-commerce website. Spun off from Taobao in 2008, Tmall has a different business model that emphasizes a smaller but higher-quality base of vendors and brands, including multinational companies like Forever21 and Uniqlo.

Tmall charges its member-merchants service and transaction fees. In contrast, Taobao revenues come from advertising; merchants pay nothing to sell on the platform, which is less an online shopping mall and more a vast digital bazaar.

Hangzhou, China-based Alibaba Group, parent of both websites, split them into separate businesses, Tmall and Taobao Marketplace, last June. But Tmall officials may have opted for a name change because consumers and the Chinese media continue to confuse the two.

A new Chinese-character logo reflecting the name change is expected to be unveiled in March after the winner of a public design competition is selected.

Tmall.com also announced that in 2011, the gross merchandise value of sales for the platform exceeded RMB100 billion, 3.5 times that of 2010.

Lunar New Year Business Blackout

Jim Erickson — Tue, 10 Jan 2012 16:18:34

It's said to be the largest seasonal migration of humanity on the planet. Every Chinese New Year (aka Lunar New Year), more than 100 million Chinese workers take leave from their jobs to return to their hometowns to celebrate the New Year Spring Festival with their families, clogging the country's transportation systems and idling factories and other businesses. With Chinese New Year falling on Jan. 23 this year, this exodus is already underway.

For foreign companies that are new to trading with the mainland, this virtual shutdown of the country's commercial activity may come as a shock. China’s government offices and stock markets will be closed for the week of Jan. 23, but New Year Spring Festival rites go on for another 15 days. Because many workers began leaving work this week to ensure they can get seats on overcrowded trains, commerce may conducted at half-speed, if at all, starting the second week of January. Millions of employees do not return to their jobs until after Feb. 6.

Clued-in Western companies that rely on Chinese suppliers have learned to plan around the period. "It's all about communication and managing expectations," says Nelson Yip, a vice chairman of the Hong Kong Electronics & Technologies Association, a trade group whose members operate manufacturing plants in China. Not all factories completely shut down for an entire month, but production is greatly curtailed; shipping delays are common and phones may go unanswered. "I think small orders may be acceptable, if buyers ask for some standard product," says Yip. "That's manageable. But it's not very practical to get big orders placed" during the Spring Festival, he says.

Yu Mulin, owner of Zhejiang Sanle Plastic Co., a plastic bottle maker in China's Zhejiang province, says that every year, she starts warning customers about the impact of Chinese New Year on production schedules as early as October to avoid bottlenecks and shipment delays. Ordering early is encouraged. "We try and complete all [early] orders before the new year," Yu says. "Orders received in the month leading up to [Jan. 23] won't be filled after after the holiday."

Yip says it's possible to continue a business dialogue with many suppliers over Chinese New Year. Factories with offices in Hong Kong, where workers get only three days off, and factories that conduct business through agents will still have people manning the phones. Buyers can often use the downtime to iron out production details, he says, in preparation for the restart of manufacturing.

But fresh orders likely won't be processed, let alone filled. "In general we reply briefly to buyers’ enquiries during the holiday," says Cissy Xu, general manager of Guangzhou Miti Import & Export Trading Co. in China's Guangdong Province. "However, if discussions involve complex products or products with major price changes, we will not be able to provide accurate information, including shipment and other details, since other suppliers in the supply chain are on vacation."

As China becomes increasingly integrated with the global economy through trade and the Internet, there are signs that domestic businesses are realizing that a vital, modern economy can't easily turn out the lights for lengthy periods. Earlier this month, the China Express Association, a national trade group of shipping companies, issued guidelines urging courier companies not to suspend operations during Chinese New Year and recommending that employees work no fewer than six hours a day to avoid delivery delays and huge backlogs of packages.

How are shippers responding? According a recent story in the Shanghai Daily newspaper, major courier services in Shanghai are charging higher fees to offset rising costs due to surging workload and an acute labor shortage in the run-up to the Spring Festival. Indeed, real work can be accomplished during the holiday—for those who are willing to pay. Frank Lavin, who was chairman of the steering committee of the USA Pavilion at the 2010 Shanghai Expo, said that in order to open in time, construction of the pavilion had to take place during Chinese New Year. "The work crews weren't unhappy," Lavin said. "They just said, 'give us three times the money.' "

Yu, the owner of the plastic-bottle factory, says she is careful to explain to her new customers that Chinese New Year is to the East what Christmas is to the West—except for the longer leaves. "Workers deserve a month off to be with their families," she says, noting that employees endure grueling work schedules the remainder of the year. "We've been exporting for more than 11 years and our customers totally understand the importance of the holiday," she says.

Wang Jian Has His Head in the Cloud

Jim Erickson — Tue, 03 Jan 2012 11:30:09

Being called crazy by your boss generally isn't good for your career. For Wang Jian, president of Alibaba Cloud Computing, it's kind of a compliment.

Wang is the driving force behind Aliyun, a smartphone operating system launched by Alibaba in October that broke new ground in the Chinese mobile Internet market. Asked recently why his e-commerce company had gotten involved in such an ambitious and uncertain project, Alibaba Group CEO Jack Ma—Wang's boss—said it was because a few years ago "this crazy guy says to me that we can have our own mobile operating system."

"That crazy guy was me," acknowledges Wang, a soft-spoken Ph.D and computer engineer who is responsible for the technology infrastructure supporting Alibaba Group companies as well as the group's cloud computing business. Ma wasn't violently opposed to the idea, Wang recalls, but the competitive challenges were obvious: mobile phone operating systems were already amply supplied by entrenched multinationals including Apple, Nokia, Microsoft, RIM and Google. And Alibaba, which runs e-commerce websites, was venturing far outside its core competence by developing software for consumer devices.

Ma "mostly wanted to know if we were confident enough to get it done," says Wang. "We didn't know if it would be a success or not, but we were confident we could do it."

That confidence was not misplaced. After three years of development involving some 1,200 Alibaba Cloud Computing employees, Aliyun debuted as the first operating system built by Chinese developers for Chinese consumers. Perhaps more importantly, Aliyun, which is based on the Linux open-source PC operating system, was also the first OS anywhere that was designed specifically to deliver cloud-based applications and services on smartphones and tablet computers.

That's a crucial distinction. Mobile devices today are a lot like personal computers were before the Internet—they are isolated islands whose power and utility is limited by the the microprocessors, batteries and memory chips squeezed into them. The Aliyun OS aims to boost the usefulness of mobile devices by allowing them to function less as discrete machines and more as a node on powerful wireless networks. By continuously accessing the Internet, devices will be able to share data and resources with vastly more powerful server computers, promising big improvements in the user experience.

For consumers, some of the more practical benefits include the elimination of the need to download content or upgrade apps, which will be updated automatically. Streaming video will become the norm so there will be no need for expensive on-board smartphone memory.

"Without cloud computing, the mobile Internet cannot realize its full potential," says Wang, who compares the state of development of the mobile Internet today to that of the Internet before the World Wide Web came along to provide a universal platform for sharing text, graphics and video.

"Today, there's no such thing as a World Wide Web running on top of the mobile Internet," Wang says. Aliyun aims to remedy that. "Basically it’s a resource management system for the cloud," he says. "It means the mobile device is an integral part of your cloud service--or the cloud service is an integral part of your mobile device."

Were it not for a change of heart while in college, Wang, 50, might have been mapping the human mind instead of charting the course of the mobile Internet. A native of Hangzhou, China, where Alibaba Group is headquartered, Wang's mother was a doctor and his father worked for a government bureau overseeing Zhejiang province hospitals. As a young man, Wang originally was inclined toward a career in health care, earning his undergrad degree from Hangzhou University in psychology. "My classmates convinced me to be a writer, and psychology offered a good chance to be a writer," he says.

But in graduate school he developed a passion for computer science and started programming, later earning his PhD in engineering from Zhejiang University. He spent several years teaching at Zhejiang University before landing work with Microsoft, where he worked for nine years as a researcher and programmer on a variety of advanced projects in fields such as user interfaces, machine learning and large-scale data processing. Before joining Alibaba in 2008, Wang worked his way up to assistant managing director of Microsoft Research Asia in Beijing.

Building a cloud-based mobile operating system may be a gamble, but Wang is no stranger to pushing the envelope in computing devices. While working for the U.S. software giant, Wang helped create a special pen that allows handwritten notes to be automatically captured digitally. He was also involved in the development of a Microsoft's first tablet computer, the Tablet PC which, when it launched in 2000, was years ahead of the iPad but failed to catch on. Wang today said they made a couple of mistakes with the tablet: for one thing, he says, Microsoft decided to use a stylus to operating the device, which wasn't very user-friendly, and they focused too intently on making the tablet a tool for businesses by making it work with Microsoft Office.

Watch a slideshow of Microsoft's tablet PC history

It's too early to tell whether the Aliyun OS will suffer the same fate as the e-pen and the Tablet PC. So far there's only one Chinese hardware manufacture making an Aliyun phone, although other models and a tablet computer are in the works. Wang won't disclose how many phones have been sold, and it's not clear if many independent software developers are building apps for the cloud phone—having a stable of useful, innovative apps and games geared for Chinese consumers could fuel growth of the OS. Alibaba late last year announced plans to give away RMB1 million in a contest to drive cloud-app development.

Meanwhile, several other Chinese companies are launching tailored versions of the Android operating system for the Chinese market—Baidu last month unveiled a Dell smartphone running an OS that replaces Google’s services with those of the Chinese search giant. Meanwhile, Apple, Chinese computer giant Lenovo and others are pushing into cloud computing.

But the Aliyun OS got a puff of wind in its sails recently when Japanese mobile platform operator DeNA said it will offer its core game software on the Aliyun mobile OS. DeNA's Mobage platform will come preloaded on a new Aliyun-based mobile phone to be launched early next year, the K-touch W800 made by Chinese manufacturer Tianyu. DeNA will also provide its development software for the platform to local game producers.

"I think we are doing great," Wang says. "We are learning a lot about what the user needs from a platform like this." There was initially concern that there would be a transition period as smartphone buyers adjusted to a new OS, but that surprisingly has not been a big issue, Wang says. "The data shows us there's no barrier for (consumers) to use the cloud application."

"Cloud computing is going to change people's lives thanks to the mobile devices," he adds. "Before mobile devices, Cloud computing is mostly for business. But with the mobile Internet, cloud computing is going to be part of people's lives. Cloud computing will be relevant to everyone."

Protecting Your IPR Online

Jim Erickson — Thu, 15 Dec 2011 18:29:16

Small business owners usually can't afford to keep a high-powered law firm on retainer, but when their intellectual property has been hijacked, there are steps they can take to protect themselves, according to Alibaba.com. The B2B website, a global online marketplace for tens of thousands buyers and sellers, finds itself occasionally mediating cases where a small, creative company selling online discovers photos of its designs have been appropriated by another vendor.

Like all major online marketplaces, Alibaba.com has an established process allowing content owners to assert their intellectual property (IP) rights. AliProtect is the platform’s IP protection system. It allows an individual rights owner to file a claim for an alleged IP infringement on the site. As soon as the claim is verified, any illegitimate listings are quickly pulled down. To lodge a complaint, click here (you do not need to be a member of Alibaba.com to complain, but you must register with AliProtect). For more information on Alibaba.com’s reporting policies and procedures, click here.

Below are tips on how users can protect their photos on the net, provided by Alibaba.com in Australia.

View more presentations from Alibaba.com

Alibaba.com Adds Ratings for Inspectors

Alizila staff — Fri, 09 Dec 2011 14:07:01

Ensuring that products shipped from Chinese suppliers are of good quality and as advertised is an important consideration for businesses using Alibaba.com. To allow international buyers to hire on-the-ground shipping inspectors in China easily over the Internet, the B2B website four months ago added 38 Chinese inspection services to the platform. Through the site's Inspection Service, buyers can choose among these independent contractors and, at relatively low cost, hire one to physically visit suppliers all over China to confirm they are getting what they paid for before their orders are shipped overseas.

But who watches the watchers? How can buyers be confident that the inspectors, who they are hiring sight unseen, are competent and trustworthy? That issue has been addressed with the addition of a customer feedback and rating system, which is live on the website. From now on buyers who have used the services of an inspector can leave behind a review and rank their inspector on a scale of one to five stars. Those ratings and reviews are displayed on the site so others can decide which services are reliable. Buyers who feel their inspection was conducted improperly have up to three months to dispute a transaction, and can receive up to 20 times the cost of the service if they win their case. Payments can also be protected by escrow. The feedback system was just launched so there aren't many reviews on the site yet, but to take a look at a typical feedback page for one of the top inspection services, click here.

Escrow Protection Available on Alibaba.com

Alizila staff — Fri, 09 Dec 2011 13:16:24

Alibaba.com continues to roll out an escrow service announced in September that helps protect payments made to overseas suppliers. International buyers interested in learning more about escrow can find details on the company's Australia blog here.

The B2B website, which in the past has been primarily a global matchmaking service for buyers and suppliers, is now facilitating international transactions through the service, which is powered by Alipay, the e-payment provider that is affiliated with Alibaba.com's parent company, Alibaba Group. Check out a step-by-step guide for using escrow below.

Escrow protection

View more presentations from Alibaba.com

Taobao Mall Adapts To China's Changing Online Market

Jim Erickson — Wed, 07 Dec 2011 17:01:28

Taobao Mall President Daniel Zhang say China's online shopping demographics are changing as fast as the online population is growing, and e-commerce companies have to adapt quickly if they expect to continue to thrive.

The number of Chinese who buy things on the Web today stands at 145 million and is expected to more than double to 329 million by 2015. "Online shopping has become part of people's daily lives," Zhang said in an interview with Alizila during a visit to Hong Kong on Dec. 7. "People are buying stuff that is close to their daily lives." Today, clothing and household items are among the most common products purchased online. That's a big change from five years ago, when the largest categories were consumer electronics and virtual goods like Internet games and mobile phone add-value cards, Zhang said.

As the market goes mainstream, shoppers, especially those living in China's major cities, are demanding that the Internet shopping experience become more secure and predictable, said Zhang, who runs China's most-visited B2C website.

Online shoppers today "need more assurance," he said, adding that providing this is "a major task."

Much like a bricks-and-mortar shopping mall, Taobao Mall does not own any product inventory or have operational control over the shops that use the platform. Instead, the website plays host to more than 50,000 merchants, including major international brands like UNIQLO, adidas, P&G, Gap, Ray Ban and Levi's.

Getting all those companies to adhere to basic customer service standards isn't easy. But it’s the price of admission to Taobao Mall, where all vendors conform to the website's 7-day, no-questions-asked return policy, and a "100% no fakes" guarantee--backed by a promise to consumers that if they receive a fake, they will be recompensed at three times the cost of the item, an amount that rises to five times next year.

"Every single merchant, if you want to join us, you have to accept this," Zhang said. "If you don't I am sorry."

Efforts by Taobao Mall to meet rising consumer expectations have not been without controversy. When the company in October announced a major increase in technical service fees vendors pay annually, along with higher security deposits used to compensate unhappy buyers in case of disputes, several hundred small merchants staged noisy protests, accusing the company of putting profits ahead of the interests of China's SMEs. Among other grievances, the protesters demanded changes to the website's system that lets customers rate merchant performance.

After getting heat in the mainland media, Taobao Mall announced a one-year grace period during which the higher fees and deposits would be adjusted to help merchants make the transition, and committed to help smaller businesses switch their stores to sister website Taobao Marketplace, which charges no fees. The company wouldn't budge on the customer ratings system.

Zhang is matter-of-fact about the need for the fee increase, which will go ahead in 2012: "The reason is to upgrade our marketplace," he said. Raising the financial stakes will help weed out tiny, fly-by-night operators that are too often a source of fakes, shoddy products and poor customer service. He pointed out that the new maximum annual fee of RMB 60,000 ($9,472), while a jump from the current RMB 6,000, "is not a big amount for a real business." Moreover, he added, Tmall stores that earn top ratings for service and quality from customers and high sales volumes are entitled to partial or full refunds. "When I say we want real businesses on our platform, I mean companies that have more commitment to their customers and have the financial resources to render quality products and service," Zhang said.

For Tmall, setting the bar higher is a necessary adjustment to the country's changing demographics. As consumer spending rises in China, so too do customer tastes. "With the improved quality of life, people care more about quality," Zhang said. "We have to follow people's demands and upgrade our platform."

Recognizing that the most efficient and effective way to promote products is through word-of-mouth advertising, Taobao Mall's next steps will include combining e-commerce with social networking. Zhang noted that consumer product reviews and ratings systems, and the ability to share likes and dislikes with friends on popular social networks such as Weibo and Renren, are just the first step.

"What I'm talking about is more sophisticated," he said. Although he offered no details, he said Taobao companies, including Taobao Mall, Taobao Marketplace and shopping search engine eTao are looking to add social networking features to help connect 400 million registered Taobao users. "There is a good opportunity for us to build an e-commerce oriented social network," he said.

AliExpress Gives Thanks for Black Friday

Alizila staff — Tue, 29 Nov 2011 18:02:40

Alibaba.com subsidiary AliExpress started out as a wholesale marketing website for Chinese suppliers wanting to sell products in small lots to overseas businesses. But the B2B service evidently has caught on with American consumers, too. AliExpress officials say that on Black Friday—the post-Thanksgiving start of the holiday shopping season in the U.S.—the number of overseas buyers trading on the platform nearly tripled compared with the daily number from 2010, while the total online transaction volume almost doubled.

The company did not disclose the value of transactions. Results were bolstered by a website-wide holiday promotion touting 20% price reductions from Nov. 25 through Dec. 25 on more than 10 million products listed on AliExpress. The top five best-selling AliExpress product categories on Nov. 25 were all giftables: jewelry, palmtop PCs, mobile phones, women's apparel and watches.

AliExpress officials said the strong consumer response was a good sign for the website's ongoing overseas expansion. AliExpress has been trying to make the site more consumer-friendly by bolstering the quality and customer service of its Chinese merchants. The company is also moving away from its roots as an online matchmaking service for businesses. Instead, AliExpress is morphing into a transaction platform for online sales, backed by an escrow service to protect consumers.

Report: Chinese E-commerce to Surpass U.S. in Four Years

Jim Erickson — Wed, 23 Nov 2011 15:34:58

Amid the grim global economic news of late, it's nice to hear that there are business sectors that are still growing briskly. A report released this week by The Boston Consulting Group, the global management consulting firm, highlighted just such a market. Chinese e-commerce is expanding so fast that it is expected to surpass the U.S. as the world's largest online shopping market as early as 2015.

The BCG report was loaded with headline-friendly statistical superlatives for China's e-commerce sector:

The number of Chinese who buy things on the Web today stands at 145 million (versus 170 million in the U.S.), but that number is expected to leap to 329 million by 2015.
Over the next four years, BCG projects, the percentage of the urban Chinese population shopping online will jump from 23 percent in 2010 to 44 percent.
Within five years, the average online shopper in China will be spending RMB 6,220 ($980) per year, twice what they are today and close to the U.S. average of $1,000.
E-commerce in China will go from representing 3.3 percent of the country's total retail spending today to 7.4 percent in 2015--achieving in four years a milestone that took 10 years to reach in the U.S.

The BCG report, which included a survey of more than 4,000 online shoppers in China, cites some interesting reasons for the boom. Low shipping costs, for example, makes buying online an attractive proposition. It costs $1 on average to ship a 1-kg. parcel in China versus $6 in the U.S.

Then there's the relatively low penetration of bricks-and-mortar retailers in many fast-growing cities. Up to a quarter of e-commerce demand in China is for products consumers cannot find in physical stores, BCG says. There are many consumers, especially younger ones, whose first contact with a brand or type of product occurs on the Internet. "China is unusual in that Internet access has far outpaced the reach of the top physical retailers, which means that e-commerce development probably will not mirror the pattern in other countries," said Waldemar Jap, a Hong Kong-based partner at BCG and coauthor of the report.

The country's online-shopping ecosystem is unique in other ways. BCG said most consumers in other countries begin shopping with a Google search. In China, buyers start by searching online shopping malls run by e-commerce giant Taobao, which hosts hundreds of thousands of e-tailers offering more than 800 million products. Taobao accounted for nearly 80 percent of online sales in China in 2010.

Read "The Taobao Phenomenon" from BCG

In addition, Chinese consumers are the most likely in the world to check for product recommendations on social networking sites, largely due to a general distrust of merchants. Forty percent of online consumers in China say they've read and posted reviews, which is more than double the rate in the U.S. Chinese aren't much for visiting the official websites of major brands and manufacturers, either. While 40 to 60 percent of online shoppers in Japan, the U.S. and Europe go to official sites, only 19 percent of Chinese do.

Read "Selling to China's E-Shoppers" from BCG

Getting a Handle on China's Online Shoppers

Jim Erickson — Mon, 21 Nov 2011 13:10:45

More than 85 percent of Chinese consumers cite price as the main reason they shop online but a merchant's reputation is the most important factor consumers consider when they choose a website to buy from, according to a survey by U.S. digital marketing company Acquity Group.

The survey, which provided a glimpse of Chinese e-shoppers attitudes, found 45 percent bought something online at least weekly, and 44 percent did so between once and three times a month. Acquity Group polled more than 1,000 consumers in 150 cities. (Download the survey results here.)

Consumers continue to depend heavily on services run by Alibaba Group, China's largest e-commerce company, when shopping on the Web. More than 40 percent of online shoppers said they discovered e-tailers through Alibaba's Taobao, the country's largest B2C and C2C website.

More about buying attitudes in China

That compared with 27.5 percent who said they discovered retailers through web advertising; 18 percent who relied upon recommendations from friends; and 7.8 percent who used search giant Baidu to find merchants.

Nearly 70 percent cited online payment service Alipay, also owned by Alibaba Group, as their preferred e-payment method.

The paradox of the Chinese consumer

Nearly two out of three consumers are concerned about customer service and getting stuck with fake goods when shopping on the web, which helps explain why merchant reputation is important to online shoppers. Those surveyed also said product quality and price were important determinants in where they shop online.

AliExpress Rolls out A+ Seller Plan

Jim Erickson — Mon, 14 Nov 2011 14:35:40

Chinese exporters selling products overseas on Alibaba.com's AliExpress platform can boost their visibility through a new program that spotlights vendors who meet tough product quality and service standards.

AliExpress is recruiting merchants to join its A+ Seller Plan, whose members will be able to brand their online stores with special icons identifying them to buyers as premium vendors. Products offered by A+ members will also get priority search ranking.

To earn the A+ badge, vendors must have positive ratings from buyers and a low number of disputes. A+ sellers also must meet service standards set by AliExpress, such as guaranteed fast delivery (shipment within 48 hours of payment for merchandise not delivered by boat) and customer-friendly return policies. If products do not match their descriptions on the website, buyers can return purchases within 15 days and sellers must pay all shipping costs.

The A+ program is Alibaba.com's latest initiative to boost the trustworthiness and professionalism of merchants on its websites. Chinese e-commerce companies have been plagued by high numbers of scammers and counterfeiters who circumvent standard verification checks to cheat buyers. "The purpose of the A+ Seller Plan is to offer higher quality products and suppliers in order to speed up the development of AliExpress," said an official with the company.

AliExpress is a transaction-based platform that allows buyers to purchase goods in smaller quantities than are typically available through wholesalers on Alibaba.com. AliExpress is ranked No.1 by Alexa.com among international B2B websites in terms of traffic.

To encourage more vendors to join the A+ plan, AliExpress is charging qualifying members a 3% transaction fee, lower than the rate paid by standard vendors, the company said.

Global Trade? There's an App for That

Jim Erickson — Fri, 11 Nov 2011 11:57:11

We acknowledge the headline above is sooooo 2009, but still. There's an app for translating Pig Latin, an app called the iBeer and the closely related Have2p Restroom Locator, so shouldn't there be an app for the more serious pursuit of international trade?

And there is. The Go Global app, created by Enterprise Nation, a U.K. company that provides support for small businesses, and Alibaba.com, is designed to be a handy tool for entrepreneurs who do business overseas. With it, users can check business news, weather reports, business etiquette and exchange rates for 30 countries. There's even a trade trivia quiz. (Sample question: Where would you find a loonie? Answer: Canada, eh?)

Emma Jones, Enterprise Nation's founder, said the idea for the app grew from an international trade guide published by her company called Go Global: How to Take Your Business to the World. "We saw lots of people using smartphones," Jones said, "and we just thought, 'surely people going global need information in the palm of their hands.' "

The Nov. 14 availability of the app, available for the iPhone and Android smartphones, is timed to coincide with the U.K.'s Global Entrepreneurship Week. As part of that event, Alibaba.com and Enterprise Nation on Nov. 15 are hosting the Go Global Conference at London's Coin Street Conference Center, where about 200 small and medium-sized businesses owners are expected to gather to share their international trading expertise.

The Go Global app tends to be U.K. centric, but traders in other countries will find it useful, Jones said. To download it from Apple's Appstore, click here.

Alibaba.com Adds RFQ Search to Help Suppliers

Alizila staff — Thu, 10 Nov 2011 15:06:29

Manufacturers and suppliers using Alibaba.com will soon find it easier to locate customers through a new search function being added to the B2B company's international website. Starting next week, suppliers will be able to search the website's database of Requests For Quotations (RFQs). RFQs are solicitations for bids posted by buyers all over the world who are looking for specific products via the website's Customized Sourcing service.

Previously, suppliers were only able to filter RFQs by industry category and by date posted, meaning they had to scan long lists of often irrelevant solicitations. The addition of a search function, which will show up on the sourcing.alibaba.com page on Nov. 14, will allow suppliers to target customers more precisely. They will be able to search using keywords by RFQ name and by the detailed description of the bid solicitation. Suppliers will also be able to filter their search results by category, location, business type, and attachments. Expired RFQs can be filtered out, too.

Suppliers wanting to know more about how U.S. buyers source products through Alibaba.com can check out the "Trading Secrets" video below. For links to more business tips vids, click here.

U.S. E-tailers Shrug Off Holiday Blues

Jim Erickson — Wed, 09 Nov 2011 14:07:03

While traditional bricks-and-mortar retailers appear resigned to another lackluster holiday shopping season, online vendors are shrugging off the Christmas blues in favor of upbeat marketing and merchandising campaigns, according to a survey by Alibaba.com, one of the world's largest online wholesale marketplaces.

In spite of the nation's sluggish economic recovery and stubbornly high unemployment, nearly two-thirds of U.S. online retailers responding to the survey said they plan to use optimism as a marketing theme this holiday season. Six out of 10 e-tailers said they will do this by concentrating their marketing campaigns on products that are "bright, bold and cheerful," Alibaba.com said, while downplaying items with conservative designs and colors.

Some online vendors, recognizing that cash-strapped American consumers aren't likely to go on a holiday shopping binge, said they were inclined to try selling products aimed at budget-conscious customers this season. "Despite our global economic woes, this spirit of entrepreneurship is not flagging in the U.S., which is good news for consumers and the market as a whole," said Linda Kozlowski, Alibaba.com director of global marketing and customer experience.

E-tailers have good reasons to feel more positive than their mall-bound counterparts. The National Retail Federation (NRF), the world's largest retail trade association, predicted holiday retail sales will increase 2.8 percent this year to $465.6 billion, a performance the association summed up as "average."

But Web shopping is booming. Online sales in the second quarter of 2011 increased a whopping 17.6 percent from the same quarter last year, according to the U.S. Department of Commerce, and this trend of double-digit gains is likely to carry through Christmas. A recent survey by Shop.org, the digital division of the National Retail Federation, found that nearly seven in 10 retailers expect their online sales this year will grow at least 15 percent compared to last holiday season. The NRF says the average shopper this year plans to do more than one-third of their holiday shopping online.

"There’s no question consumers are eager to hit the Web this holiday season," said Shop.org head of research Fiona Swerdlow, "Online retailers are prepping by optimizing their sites, beginning their marketing and promotions early, and planning plenty of free shipping promotions as they aim to provide value and convenience for their shoppers."

Shop.org's findings were similar to the results of Alibaba.com's survey, which polled 1,268 e-tailers who have 10 or fewer employees.

Carried out between Oct. 26 and Nov. 2 with the help of Alibaba.com subsidiaries Vendio and Auctiva, which provide e-commerce solutions for more than 250,000 online merchants, the survey revealed that women spend about four times more than men during the holidays, and tend to buy early while men procrastinate. Women also tend to be choosier Web shoppers than men, who ask fewer questions and buy exactly what they want with less regard to price, according to Alibaba.com.

Online merchants also detected a certain "frugality fatigue" among holiday shoppers this year. Four years after the financial crisis, consumers have become frustrated by the need to pinch pennies, an attitude manifest in a desire to buy something nice—for themselves. Six out of 10 of the merchants said they personally planned to spend the same or less on gifts for others than what they expect to spend on themselves this Christmas.

As one survey respondent said: "People are tired of living economically and have been splurging on just one large-ticket vanity item." It may be better to give than to receive, but this holiday season, self-sacrifice appears to be wearing thin for budget-weary consumers.

Microsoft and Alipay Release Custom Browser

Jim Erickson — Mon, 07 Nov 2011 13:19:14

A version of Microsoft's latest Chinese-language web browser is available with beefed-up security and quick-access features for making online payments, the fruit of cooperation between the PC software giant and Alipay, China's largest electronics payment service.

The customized IE 9.0 browser, launched Nov. 3 and available for download by Windows 7 users, has Alipay safety controls and digital certificate drivers pre-installed. Alipay and Microsoft also agreed to share information on malware and phishing sites on an ongoing basis so that people using IE 9.0 will be alerted to the latest threats. Microsoft updates its malware and phishing site database in real time.

Microsoft and Alipay officials said the custom browser is a response to the jump in online crime China has seen along with a boom in e-commerce. MarkMonitor, a marketing consultancy, said that in September there were more than 5,300 phishing sites targeting Chinese and Hong Kong brands. Over 80% of online users are concerned about safety and more than half are worried about being victimized by Trojan horses and phishing sites, according to Analysys market research.

In addition to its safety features, the new browser has integrated links to Alipay’s quick pay, credit card payback, utilities payment and Taobao shopping tools. The features are also available in a version of IE 8.0 for users of Windows XP and other older Microsoft operating systems. "More and more Alipay users are switching to Windows 7 and IE 9.0 has witnessed a strong increase in downloads since its release," said Alipay Chief Technology Officer Li Jingmingi.” Alipay has more than 600 million registered accounts and sees 11 million daily transactions.

Is China Ready For Shopping Search?

Jim Erickson — Wed, 02 Nov 2011 20:16:33

Officials for eTao, the online shopping search engine that was soft-launched last year by e-commerce giant Alibaba Group, yesterday revealed the company's strategy for bringing some transparency to China's boisterous business-to-consumer (B2C) market.

China already has more than 12,200 online shopping websites and an additional 200 are being added every month, making it increasingly confusing for consumers to choose products and complete purchases, eTao officials said at a press conference in Beijing.

eTao, which is still in beta, is being developed as a dedicated "one-stop" platform to help shoppers cut through the noise. The site allows consumers to conduct product searches encompassing more than 5,000 online merchants, check out product reviews, get information on shipping, compare prices and otherwise make more informed buying decisions. Alibaba Group plans to invest RMB1 billion to market and promote eTao with the aim of increasing traffic volume and channeling users to some 5,000 shopping sites that are indexed by eTao's search robots, officials said.

Eddie Wu, eTao president, stressed that one of his company's key initiatives is a standardized registration system that lets consumers shop on hundreds of sites using a single user name and password.

Currently website registration is not standardized in China, which means e-shoppers tend to stick to just a handful of sites where they have already set up accounts. Officials for eTao said statistics indicate consumers regularly visit no more than five sites because of this, which limits their ability to comparison shop.

About 600 websites, among them major retailers Gome, Vancl, Yihaodian and Nike China, have integrated eTao's login system into their websites so customers can sign in and complete purchases using their Alipay or Taobao user names and passwords.

While some major Chinese e-tailers see the value in a search platform dedicated to shopping, it's not yet clear whether consumers will embrace the technology. In the third quarter, general search site Baidu remained China's search-engine leader with a 78% share of search advertising revenue, according to market analyst iResearch. eTao has yet to show up on the radar of researchers that track China's search market.

Despite this, some B2C site operators are worried about eTao's potential clout with consumers. Controversy erupted last week when 360Buy.com, one of China's largest and fastest-growing shopping sites, moved to block eTao's search robots so that information pulled from 360Buy would not show up on eTao. 360buy officials did not say why they did not want to be included in search results, but industry observers speculated the website feared eTao would rig consumer searches to favor Taobao Mall and Taobao Marketplace e-tailers so that they placed higher in search rankings than 360Buy.

Taobao Mall and Taobao Marketplace, China's top B2C and C2C (consumer-to-consumer) websites, are owned by Alibaba Group and are eTao's sister companies.

Wu, eTao's president, insisted yesterday that eTao was an "agnostic" platform and that Taobao merchants did not enjoy any advantages over other shopping websites. “As an open platform and search engine, eTao aims to help more business-to-consumer and online shopping companies grow and improve," Wu said.

He argued that as competition in Chinese e-commerce intensifies, Chinese shopping websites are increasingly engaging in costly marketing and advertising campaigns to drive traffic—campaigns that in the past have proven to be inefficient and wasteful. Consolidating product information on a single site such as eTao is a better way to drive traffic, he said.

As a result of 360Buy’s actions, eTao has stopped indexing 360Buy product information but will continue to collect 360Buy product pricing information from other websites “because we believe consumers have the right to have this information,” Wu said.

Two other websites that moved to block eTao, Dangdang and Suning, are “not opposed to comparison shopping” and are talking to eTao about collaborating, Wu said. Dangdang officials reportedly objected to eTao's access and use of product reviews. Dangdang spent years amassing the reviews from customers and does not want the information shared with the general public without permission.

Quick Pay Catching On With Online Shoppers

Alizila staff — Tue, 01 Nov 2011 13:08:50

China's online shoppers are increasingly adopting the Quick Pay online payment service introduced by Alipay late last year, according to a report in the Chinese-language Beijing Morning News. The number of transactions completed through Quick Pay amounted to 45% of the total number of Alipay transactions in late October, the newspaper reported, citing statistics from Alipay.

Quick Pay was developed by Alipay, China's largest third-party online payments provider, to allow credit-card holders to more conveniently complete online transactions. Prior to the introduction of the service, shoppers making purchases were required to switch from the retailer's website to their bank's website, where they must log in again in order to transfer funds to the vendor. Quick pay allows purchases to be completed without leaving merchants' websites.

The number of Quick Pay users now tops 30 million, compared to 20 million three months ago.

Inside Alibaba.com's Fair Play Fund

Alizila staff — Fri, 28 Oct 2011 16:32:51

In this Sept. 9, 2011 interview with Alizila editor Jim Erickson, Alibaba.com Global Marketing Director Linda Kozlowski explains the e-commerce company's Fair Play Fund, which helps compensate members who have been defrauded online by suppliers using the B2B website. The following is a transcript of the video interview:

Alizila: The Alibaba.com Fair Play Fund was started about a year and a half ago, what was the purpose of the fund when it began?

Linda Kozlowski: When we started the fund, our goal was really to be as fair as possible to the buyers. Because Alibaba is not a part of the transactions that happen on our platform, we can’t actually help a buyer get a refund if they’ve been scammed or defrauded by a supplier. But what we can do is we can redistribute the revenue that we’ve gotten from the membership of that supplier to the buyers, so that Alibaba does not profit off any type of fraud. So, we designed a program where the Gold Supplier fees of any member that has committed fraud are put into a fund, and then redistributed to any buyers that have been victims of scams.

Alizila: How many members have benefited since the fund was started, and did they benefit exclusively monetarily or there are other benefits as a result of them seeking compensation from the fund?

Linda: Well, first of all, the thing you should know is as soon as somebody has a verified claim against them that enables pay-out from the Fair Play Fund, that means they get removed from the site. So some of the other benefits are the fact that we do take action upon that particular person who committed the fraud, and in addition to that we are protecting other buyers from experiencing the same problems. So by just being a part of the Fair Play Fund, you are automatically taking action and removing somebody who could scam other buyers. We’ve helped thousands of people since we actually started the program, and we’ve paid out more than 2.17 million US dollars.

Alizila: It's a way of policing the site. The fund encourages members to report some of the suppliers that may be involved in activities that we don’t approve of.

Linda: Exactly, and in addition to that, we learn from each one of these cases, so we can start to identify potential fraud cases even earlier. By reporting things, buyers are actually helping us to make the entire platform safer.

Alizila: How easy is the process in terms of applying? If I’ve purchased a product over Alibaba.com, and my supplier in China hasn’t delivered, how difficult is it for me to actually receive compensation? How long does the process take, is it all transacted over e-mail or phone calls, how does it work?

Linda: Well, it varies depending on the complexity of the case of course, but the important thing to remember is that, Alibaba.com is a platform, so we have to be fair to all parties. We want to make sure we have substantial evidence to indicate that someone has committed fraud before making a final decision on the Fair Play Fund. That being said, we have experts who understand exactly what evidence they need to gather from the supplier and from the buyer, in order to verify exactly what’s happened. Cases can be handled in as little as a couple of weeks, or maybe a couple of months for more complex cases.

Alizila: So buyers need to understand that it’s not a simple matter of saying “hey, I was cheated, give me my money”, there is a process involved and they will be required to provide evidence of the transaction and make a case.

Linda: Absolutely, and just as they would want us to be fair to them, we need to be fair to the supplier and make sure we have in fact examined all the evidence properly, so they will need to present the correct evidence of fraud.

Alizila: How is the program been evolving over the year-and-a-half or so of its existence?

Linda: The program has been evolving in a rather interesting direction. At first we focused only on China suppliers, but we have now opened the program to global Gold Suppliers We’ve also expanded the way that we make payments, and we’ve changed the systems to process the claims a lot faster now. I think most importantly, one of the interesting things that we’ve seen about the evolution of the program is the decreasing number of claims. The fair play fund was implemented alongside a lot of other trust and safety initiatives to help try to reduce frauds. We’ve seen a 40% decrease in the number of claims submitted to the Fair Play Fund just in the last 6 months.

Alizila: That’s terrific. What are some of the other anti-fraud measures? How are you working to assure that people aren’t having to apply for the Fair Play Fund in the first place?

Linda: The Fair Play Fund is actually something that happens after fraud has already occurred, so in our mind, the less people that need to apply for this, the better. We are trying to help prevent fraud before they even get to that point. The No.1 way that we can do that is through customer education. We try to teach traders how they can take advantage of trust and safety tools that are on the platform, looking to see how long someone has been a member, are they a Gold Supplier, do they have a factory audit that demonstrates that we’ve done deeper research on their factory to determine their capacity and their financial situation, or are there other references out on the web that they can check and find out if this supplier has a bad reputation. We are trying to put a lot of education in place, so that customers know to look for these resources, and think about this carefully before they make a transaction, in order to make sure they are safe.

In addition to that, we are looking at some other programs like payment options, including extending the Escrow payment service that we have on our Aliexpress site to Alibaba.com, so the first time that you work with a new supplier, you are able to conduct a transaction over Escrow. If for some reason you have any problems, you can get your money back from Alibaba as opposed to having to rely on the refund from the supplier.

Alizila: There have been some criticisms about Alibaba.com that we are somehow benefiting from illicit activities that take place on the site. How important is it that Alibaba.com continue to push programs that try to make it a safe, secure and completely trustworthy trading platform?

Linda: Because we don’t take a portion of the transaction, because we are membership and subscription-based site, any transaction that happens on the site, we are not taking a portion of that. The only revenue coming from the suppliers are their membership fees. That’s why we developed the Fair Play Fund, so that we can actually return those fees to the buyers that have experienced fraud, and remove any potential profit from Alibaba. Alibaba does not benefit from this at all, it’s damage to our reputation, it’s damage to our honest suppliers’ reputations and it creates a lot more work for the company to try to manage these cases. So we want try to make sure that customers are as safe as possible, they understand safe trading practices, they understand the key things to look for, and know how to protect themselves, so that we don’t actually have to make these pay-outs.

Alizila: Great. Linda, thanks for your time today.

Linda: Thank you.

Alibaba Is Doing a Little Cloud Seeding

Jim Erickson — Mon, 24 Oct 2011 18:02:58

Alibaba plans to give away RMB1 million in a contest to fuel the development of applications for the company's cloud-based mobile phone operating system.

Slated to run from Oct. 24 through Dec. 31, the contest, run by Alibaba Group subsidiary AliCloud, will dole out prize money to more than 200 developers, with the top prize of RMB100,000 going to each of two developers whose apps for the Aliyun OS—which was launched in July—are selected as best in the field. Here's the prize-money breakdown:

Top 2: RMB100,000 each

3 and 4: RMB50,000 each

5-14: RMB10,000 each

Remaining RMB600,000 to be split among 200 outstanding cloud app developers. More details (in Chinese) are available here and here.

There's more cloud-seeding cash where that came from. The competition is in addition to a RMB1 billion fund established by AliCloud and Yunfeng Capital, a private equity fund that includes Alibaba Group Chairman Jack Ma. Announced today, the fund was formed to support and invest in up-and-coming cloud computing enterprises and developers. While the fund will focus on those who use AliCloud's platform and the Aliyun OS, managers said they would also consider funding other innovative cloud-computing companies.

Alibaba's announcement comes a few days after the Chinese government's National Development and Reform Committee said it will allocate RMB1.5 billion to back leading Chinese enterprises in the cloud-computing industry. AliCloud and Tencent Holdings were among the first batch of recipients of NDRC funding.

While we are on the subject of cloud phones, photos of the second version of an Aliyun-based mobile phone have leaked on the Chinese Internet, along with a tablet computer running the OS that is expected to launch before the end of the year. The new phone, called the K-Touch Cloud-Smart W800, sports a 4.3-in. touchscreen compared with the 3.8-in. screen on the original cloud phone, the W700. Little else has been revealed about the new phone and tablet, both of which are being built by Beijing Tianyu Telecommunications Equipment. So far, Beijing Tianyu is the only maker of phones running the Aliyun OS, but AliCloud reportedly is talking to at least 10 hardware manufacturers about rolling out more models.

Ma Urges Yahoo to Move Faster

Jim Erickson — Thu, 20 Oct 2011 13:50:21

Alibaba Group CEO and Chairman Jack Ma occasionally stresses the need for entrepreneurs and companies to exercise patience. But even this avid Tai Chi practitioner won't wait forever for Yahoo directors to decide what they want to do with the ailing U.S. Internet giant.

On stage at the AsiaD technology conference held today in Hong Kong, Ma was (inevitably) asked about his well-publicized interest in buying out Yahoo's 39% stake in Alibaba Group, or in buying Yahoo whole. "We still have not changed out mind, we still have strong interest in Yahoo," Ma said. "We are waiting for (Yahoo's) independent directors to tell us what options they want to pursue."

Alibaba has been working with Yahoo for years on a deal without result. Money is not the problem, Ma said after being asked about an offhand statement he made recently about how he had put together $20 billion to buy Yahoo. "I don't have $20 billion," he explained. But there are sufficient investors interested in Yahoo to make a deal happen. "We never think finance is a problem, the money is there," Ma said. "The problem is what Yahoo wants to do."

Ma's remarks indicated the longstanding inability of Yahoo and Alibaba to agree on substantive issues is no closer to resolution. Minutes before Ma took the stage, Yahoo co-founder Jerry Yang, who is a director at both Yahoo and Alibaba Group, told the AsiaD audience that Yahoo’s board is continuing a strategic review of the company's business and future. "The intent going in is not to put ourselves for sale," Yang said. "The intent is to look at all the options."

But Ma hinted that time is a factor and Yahoo's search for direction cannot continue indefinitely. "I know they have a lot of options," Ma said. "But they have to make one decision."

"First, we are ready," Ma said. "Second, we also have options. Third, we are eagerly awaiting answers," he said, concluding with what seemed to be a not-so-cryptic Chinese metaphor: "All the beautiful flowers withdraw very quickly."

Watch video highlights of Ma's interview on AllThingsD

New Cloud Phone Could Debut in November

Jim Erickson — Tue, 18 Oct 2011 18:04:55

The maker of China's first cloud-based mobile phone is expected to release an improved version next month, according to industry sources and Chinese media reports. Beijing Tianyu Telecommunications Equipment is readying a follow-up to the K-Touch Cloud-Smart Phone W700, which launched in late July to a muted response from a smartphone market more interested in the battle between Apple's iPhone and challengers running Google's Android operating system.

The new Tianyu phone will have a bigger screen, longer battery life and better performance than its predecessor. The phone's key distinguishing feature—its cloud-computing operating system developed by a subsidiary of e-commerce giant Alibaba Group—also gets an upgrade. The phone will sport version 2.0 of the Aliyun (Ali Cloud) operating system but details of specific improvements to the OS, which come less than three months after its debut, are sparse. Sources say the cloud-based operating system, which runs apps by sharing resources over the mobile Internet, has faster data-transmission speeds and shorter system-response time.

Rong Xiuli, chairwoman of Beijing Tianyu, reportedly called the sales performance of the original K-Touch Cloud-Smart phone "acceptable," although she acknowledged that its market performance didn't meet initial expectations. Rong said the company has sold about 200,000 of the smartphones, which carry a steep pricetag of RMB 2,680 ($416).

The price of the new phone is not yet known. But Beijing Tianyu is anticipating better sales when a deal with China Unicom for a subsidized subscriber package including the phone plus a discounted data plan is finalized. "Based on the current sales performance," Rong reportedly said, "we are confident that we would be able to sell more than 1 million Aliyun phones within one year especially when we obtain the subsidy from China Unicom. We are looking forward to seeing a significant increase in the sales."

Tmall Delays New Fees, Creates Consumer Fund

Jim Erickson — Mon, 17 Oct 2011 17:53:35

Taobao Mall has delayed for nine months a sharp increase in fees designed to improve the service quality of merchants operating on the business-to-consumer website following last week's noisy protests by small online retailers.

At a press conference today in Hangzhou that included an appearance by Jack Ma, the chairman of Taobao's parent, Alibaba Group, Taobao Mall officials said that after discussions with merchants, it was decided to allow for a transition period before service fees jump by at least five-fold. The company also is delaying a requirement that merchants put up hefty security deposits that could be forfeited if independent sellers fail to live up to the platform's product quality and customer service standards.

The increases were set to take effect on Jan. 1, but now most existing merchants will not have to pay the higher rate until Oct. 1, 2012. "We have been listening to our customers and we are willing to listen," said Taobao Mall President Daniel Zhang. "It seems that our merchants need more time to adjust to the new policy and we are making adjustments to help our merchants to get ready for the change." The transition period does not apply to Taobao Mall sellers who rank in the bottom 10% of customer satisfaction rankings.

To ease the transition, company officials announced the formation of a RMB $1 billion fund to help pay for refunds to consumers who are unhappy with Taobao Mall merchants' goods and services. The fund, which will be managed by the Bank of China, is designed to compensate buyers in cases where refunds are not issued by sellers or covered by security deposits.

In addition, Taobao Mall said it would spend RMB $300 million on brand-awareness marketing. The company also plans to provide a total of up to RMB $500 million in loan guarantees to help qualified small businesses borrow from banks if they are having difficulties paying higher service fees.

Taobao Mall, which today hosts more than 50,000 registered businesses, was spun off from the giant Taobao online marketplace in 2008 as a separate website offering higher quality merchandise and branded products from major Chinese and international retailers and manufacturers.

Last week, several thousand small merchants launched cyber-attacks on some of Taobao Mall's major retailers to protest new policies aimed at improving the quality and service of independent merchants operating on the platform.

Among the changes was an increase in annual technical service fees from RMB 6,000 ($939) to two new packages costing RMB 30,000 ($4,697) and RMB 60,000 ($9,395). Taobao Mall also started requiring merchants to put down security deposits of up to RMB 150,000 ($23,487). The service fees are refundable if retailers achieve certain sales volumes or high positive-feedback levels from customers.

Small merchants complained that the new fees are punishingly high given their revenue streams, while larger retailers with high sales volumes are better able to absorb the increases. They vented their anger by ordering goods from large merchants then demanding refunds and otherwise trying to disrupt Taobao Mall business.

More than 100 merchants were hit by the attacks, which were carried out by nearly 5,600 people, Zhang said during the press conference. A group of 17 people were identified as leaders of the protest, he added, noting that about half of them did not have stores on Taobao Mall and the rest had previously seen their stores shut down because they were selling counterfeit goods or otherwise violated the platform's policies.

Company officials said they were not bowing to pressure from the protesters by delaying the fee hike.

"The media has made a big deal of the price increase, saying we are driving out the smaller sellers," Ma said. "We admit that there were problems with our decision making and we didn’t do a good job in communication."

But "We won’t compromise our principles and we won’t bend under pressure," he said. "Our principle is to safeguard e-commerce integrity, to fight against fakes and IPR infringement."

The controversy drew the attention of China's Ministry of Commerce. In a statement posted on the MOC website, government officials expressed concern over the protests against Taobao Mall, saying the ministry would try to defuse the conflict in order to stabilize prices and support small businesses.

"I believe our measures are in line with MOC’s requirement," Zhang said in response to a question from the media at today's press conference. He estimated that up to 5,000 small merchants might ultimately leave Taobao Mall due to the policy changes. The company plans to help many of them switch over to Taobao Marketplace, which charges no fees and is geared for small businesses and sales between consumers.

Ma—who last week blogged that he was very upset by the protesters, describing them as "hurting the innocent by shouting 'Eliminate all, destroy all' "—explained that China's export-led economy faces tough challenges as the global economy slumps, making it increasingly important that the country's growth is supported by domestic demand.

E-commerce can play a role in that shift, he said, but only if there is a reduction in the fraud, counterfeit merchandise and shoddy service that often plague China's online marketplaces. "E-commerce is the best solution to increase domestic demand and increase jobs," Ma said. "We believe that e-commerce in China needs to be upgraded."

Trouble at Tmall Over Higher Service Fees

Jim Erickson — Thu, 13 Oct 2011 18:28:20

Taobao Mall has been hit by cyber-attacks from small merchants after the e-commerce website increased fees it charges online store operators by at least five-fold.

China's Xinhua news agency reported that thousands of small merchandisers "waged war" Tuesday night against larger companies selling on Taobao Mall by submitting large orders then asking for refunds, or by filing phony complaints against their larger brethren to tarnish their customer ratings.

Several dozen brands, among them Japanese clothing company Uniqlo and Chinese clothing stores Handuyishe and Qigege, were hit by the attacks. On Wednesday, around 40,000 people calling themselves the "temporary anti-Tmall union" gathered in an online chat room to discuss other ways to disrupt operations on Taobao Mall (www.tmall.com), according to Xinhua.

The protests erupted after Tmall on Monday implemented several new policies aimed at improving the quality and service of independent merchants operating on the platform. Among the changes was an increase in annual technical service fees from 6,000 yuan ($945.2) to two new packages costing 30,000 yuan ($4,726) and 60,000 yuan ($9,452). Tmall also started requiring merchants to put down liability deposits of up to 15,000 yuan ($23,629) that could be forfeited if sellers failed to live up to standards written into their contracts.

Small merchants complained that the new fees are punishingly high given their revenue streams, while larger retailers with high sales volumes are better able to absorb the increases.

China's largest B2C (business-to-consumer) platform by transaction value, Tmall has been steadily trying to boost the size and professionalism of retailers using its platform, which was launched in 2008. As online shopping has boomed in China, consumers have been plagued by growing online fraud and fakes being sold over the Internet, along with poor service. According to the China Internet Network Information Center, one out of every 12 online shoppers reported they were defrauded in the first six months of the year.

Unlike its sister platform Taobao Marketplace, which hosts hundreds of thousands of small merchants selling inexpensive goods, Tmall is positioned as a website for branded goods and higher-end merchandise. It requires its members to abide by basic service standards, including guaranteeing the authenticity of their products and providing seven-days-no-questions-asked exchanges or refunds. International brands operating flagship stores on the site include Adidas, Levis, Gap, Jack&Jones among others.

Tmall officials said the fee increase was designed to drive away inferior retailers offering shoddy products, noting the fees will be fully or partially returned to sellers if their scale and service quality meet targets set by Tmall. "We hope to encourage businesses to conduct self-inspections to improve their service," said Tmall President Daniel Zhang at a press conference held Wednesday in Hangzhou, where Tmall's parent company, Alibaba Group, is headquartered.

"Why do people breach the contract willfully?" Zhang asked, according to a story on ZDNet Asia. "It is because the cost of violation is too low. In fact, it is a form of unfairness to merchants who operate honestly. Therefore, we will use financial measures to resolve this problem by increasing the cost of violation" by deducting penalty payments from liability deposits. "The increase in the deduction will be much higher than in the past so as to propel the business to raise their service standards," Zhang said.

Small businesses unhappy with the higher costs can always switch to Taobao Marketplace which charges no fees, Zhang noted.

Alibaba Group Chairman Jack Ma also weighed in on the controversy in comments posted on his widely followed Weibo blog. Obviously shaken that the protestors had resorted to cyber-attacks, Ma wrote: "In China today, it is hard to be a businessman, harder to be an honest businessmen, and even harder to establish a trust and credit system." But he vowed Tmall would not back down from the fee increase. "We must follow through," he wrote.

The History of E-commerce (Part 1)

Jim Erickson — Tue, 11 Oct 2011 15:37:39

We ran across this semi-fascinating History of E-commerce infographic on ZippyCart. Who knew that the first person to buy anything online was a 72-year-old named Jane Snowball? Or that the first item sold on the Internet was a pepperoni and mushroom pizza from Pizza Hut?

The infographic was compiled last year, so it's not quite up to date. There's another issue: this is, obviously, a wholly U.S.-centric retrospective, one that omits some of the significant milestones in other countries (click here for a timeline of Alibaba Group's development). Anyone interested in putting together a History of E-commerce in China infographic? Drop a comment on us or send an e-mail.

Watch Jack Ma's Stanford Speech

Alizila staff — Fri, 07 Oct 2011 18:08:18

Alibaba Group CEO Jack Ma last week stirred things up during a speech at Stanford University when he said he was "very interested" in buying Yahoo! The comment touched off a lot of speculation about how--and whether--a purchase would actually go down. But Ma had plenty of other things to talk about, among them his Chinese e-commerce competitors; the astounding growth of Taobao, Alibaba's Chinese online retailing platform; his friendship with Yahoo! co-founder Jerry Yang; how important the U.S. market is to his company's growth plans; and more.

You'll just have to watch the whole thing, but be warned it's a long video, almost an hour. (spoiler alert: Ma first says he'd like to buy Yahoo! around the 22-minute mark and elaborates a bit more near the end of the video.)

Yahoo Deal White Noise Cranked up to 11

Jim Erickson — Thu, 06 Oct 2011 16:01:45

AllThingsD blogger Kara Swisher posted an amusing piece today lamenting "all the almost ridonkulous rumors about everyone and their mother being 'imminently poised' to make a bid for Yahoo." Swisher's correct that the media has been in speculative overdrive concerning Yahoo, fueled in part by Alibaba Group Chairman Jack Ma's remark that he was interested in buying the struggling U.S. Internet company, which currently owns 39% of Alibaba.

Swisher notes that it's too early to be picking the winning horse--or any horse really--in a Yahoo sweepstakes. Still, on behalf of avid Yahoo deal-watchers confused by the white noise now emanating from the blogosphere, Alizila sifted through the junk and chose the three stories that at the moment are most likely to shed light, rather than FUD, on the topic.

There's this sourced story from Reuters on the potential for a Microsoft bid. Next, answering some of the conjecture about how the U.S. government would probably freak out and block an Alibaba bid is this well-reasoned piece from Fortune magazine writer Bill Powell. Finally, it's Swisher again in a blog post about how Ma is perplexed that a consumer-focused company like Yahoo might be barred from foreign ownership by restrictive U.S. rules surrounding overseas ownership of sensitive assets.

Ma's puzzlement highlights a curious situation: China, a country that tightly controls the media, on paper forbids majority foreign ownership in Internet companies. Yet for years the Beijing government has been allowing foreign companies to take large stakes in the Chinese Internet through complicated legal work-arounds. Yahoo and Softbank together own a total of 69% of Alibaba Group, to cite just one really obvious example. Is anti-Chinese sentiment in the U.S. running so high that its free-enterprise-loving politicians would scuttle a deal that is basically the same as one that Beijing allowed just a few years ago?

Could be, but we won't know for awhile. Better in the meantime to just enjoy a YouTube video clip of the classic "These go to 11" scene from This is Spinal Tap (click here). Or check out the trailer for the 1984 mockrockumentary.

Suppliers Offer Feedback on Alibaba Upgrade

Alizila staff — Wed, 28 Sep 2011 14:00:29

A survey of about 300 Alibaba.com Gold Suppliers in Malaysia has revealed which of the new features being offered to premium users of the e-commerce website are most popular.

The addition of Sub-accounts was cited as the most useful new tool by 71 percent of respondents. (The feature allows up to five employees of Gold Supplier companies to manage their trading activities on Alibaba.com.) Other upgrades cited as helpful were Business Trends (15 percent), Private Showroom (9 percent) and Custom Pages (5 percent).

To learn more about Alibaba.com's recent service upgrades, click here.

What do you think? Tell us which My Alibaba.com features you like—and which you don't—by posting your comments below.

Alibaba.com Unveils Spin-off, Share Buyback

Jim Erickson — Mon, 26 Sep 2011 18:07:00

Hong Kong-listed Alibaba.com is spinning off its Internet services subsidiary, the e-commerce website disclosed Monday. In a filing with the Hong Kong Stock Exchange, Alibaba.com said the subsidiary, Beijing-based HiChina Group, is considering listing its shares in the U.S. Details of the offering, including its size and price, haven't been finalized.

HiChina is a full-service Internet infrastructure services provider that provides domain name services, web hosting, cloud-based services and website building solutions to small-and-medium enterprises on the mainland. Alibaba.com in 2009 bought an 85% stake in HiChina for $79 million.

Although the current global stock market turmoil has curbed investors' appetite for IPOs, a stock analyst for Macquarie Capital Securities wrote that a HiChina spin-off "would likely offer some modest positive impact to (Alibaba.com's) stock price as this shows management's pro-activeness in seeking ways to provide support to the shares following the recent weakness." Alibaba.com shares have fallen 54 percent this year, compared with a 24 percent decline for the Hang Seng Index.

In another move that could shore up Alibaba.com's share price, management separately announced to employees and the Hong Kong Stock Exchange that the company on Monday bought back 3.2 million Alibaba.com shares on the open market. The share repurchases were made after the HiChina announcement.

In an e-mail to employees, Alibaba.com CEO Jonathan Lu said the buy-back took place as part of a program launched in 2008 when the board approved the expenditure of up to HKD 2 billion for share repurchases, of which a large amount has yet to be utilized.

In a show of confidence, Lu said "Our management will continue this buy-back program depending on stock market conditions," adding that management did not think the current share price reflects the recent financial performance and future prospects of Alibaba.com, the world's largest business-to-business marketplace. Alibaba.com shares closed Monday at HKD 6.42, down 8.16 percent.

Sourcing Help For Alibaba.com Buyers

Jim Erickson — Thu, 22 Sep 2011 16:12:19

In this video of online trading tips, U.S. entrepreneur Chris Walworth says that when he solicited bids from potential manufacturers on Alibaba.com, he received more than 1,000 responses. That may sound like a good thing, but Walworth says there were far too many leads to manage, which wasted his time. "Pretty much everybody in China decided they would bid," he says. "That cost me time and effort."

Alibaba.com has developed a free service designed to help buyers like Walworth more efficiently locate the right overseas suppliers for the products they need. Called Customized Sourcing, the service does what it sounds like it does: it introduces human assistants—Alibaba.com industry specialists—into the online buying process to help narrow down searches to the most relevant, trustworthy and affordable suppliers based on individual buyer's needs.

If your problem isn't too many responses, but too few—if you've solicited bids on Alibaba.com but aren't getting bites because your product specs are unusual—Alibaba.com specialists can help locate up to 10 pre-screened suppliers based on manufacturing capability, production capacity, service quality and price. Buyers can then make direct contract with the suppliers they favor to strike a deal.

Those interested in trying the service, which incidentally can be a handy way to avoid fraudulent suppliers operating on Alibaba.com, can learn more by clicking here. Be advised that it can be a little hard to find the Customized Sourcing button on the website. Clicking on this link will take you to Alibaba.com's "post a buying request" page. Then, under the "Service Option" header, select "I want to receive quotations from suppliers who match my RFQ." (Request For Quotation). This gets you into the queue to receive Customized Sourcing help.

There is no charge for the service, which is available to all Alibaba.com International members.

Alipay Links Up With Budget Airline Jetstar

Alizila staff — Thu, 22 Sep 2011 12:41:05

Alipay, China's largest third-party online payments provider, has boosted its international reach through an agreement with Australia-based budget airlines Jetstar. Announced today, the deal will allow millions of Alipay users in China to book flights on Jetstar through the airline's website and pay for the tickets in renminbi.

Jetstar, Asia's largest low-cost carrier by revenue, is expanding its Chinese network to nine Chinese destinations, including a planned service linking Beijing, Singapore Melbourne. China is Australia’s biggest export tourism market in terms of expenditure and Singapore’s second largest source of tourism traffic, said Jetstar Chief Group Commercial Officer David Koczkar in a press release. "It is vital that we continue to innovate our product and distribution channels to make our low fares more and more accessible to the Chinese consumer," he said. The airline recently launched a Chinese-language booking website.

With a fleet of 80 aircraft, Jetstar offers up to 3,000 flights a week to 56 destinations in 17 countries and territories across the Asia Pacific region.

Alipay CFO Eric Jing said his company initiated its cross-border payment service in 2007 to meet growing demand from Chinese consumers who are using the Internet to purchase goods and services from overseas merchants. Alipay has more than 600 million registered users and accounts for about half of China's online payment services market.

Taobao Mall Opens to Competitors

Jim Erickson — Mon, 19 Sep 2011 21:41:58

Taobao Mall is moving to reinforce its position as China's largest B2C (business-to-consumer) online retailing platform by recruiting some of the country's leading online retailers to also sell on its website.

At a press conference in Beijing today, Taobao Mall President Daniel Zhang announced commitments from 38 B2C sites to set up flagship stores on Tmall.com. Among them are well-known Chinese retailers with e-commerce websites such as the Yihaodian and Intime department store chains; Vancl, China's biggest online apparel retailer; and leading online consumer electronics retailer Newegg.

By partnering with smaller B2C (business-to-consumer) websites that are in effect its competitors, Taobao Mall is furthering its goal of establishing an open online retailing "ecosystem" providing Chinese consumers with high-quality, branded merchandise along with a predictable shopping experience, Zhang said. "The key to elevating the overall retail experience for consumers across China is an open B2C platform that brings together retailers, e-commerce service providers and logistics service providers in an ecosystem that facilitates convenient cooperation between all parties," Zhang said, later adding that "the message we are sending is we are not just welcoming consumer brands but also channel brands" such as Vancl and Newegg.

The announcement raises the stakes in the battle for China's explosive B2C e-shopping market, which is projected to grow more than fivefold to RMB650 billion ($100 billion) over the next three years, according to Beijing-based research firm Analysys International.

Taobao Mall is betting its unusual open-platform business model—in which a wide range of online retailers, brands and products are aggregated onto a single site functioning as a matchmaker between sellers and buyers—will be more successful than the more conventional model pioneered by Amazon.com in the U.S., where standalone online retailers purchase their own inventory, sell directly to consumers and manage their own warehouses and delivery systems.

Since its launch in 2008 as a branded-goods offshoot of the giant Taobao C2C (consumer-to-consumer) marketplace, Taobao Mall has become China's leading B2C player with a 33% market share in the second quarter, up from 28% a year earlier.

But the company has been feeling pressure from Amazon-style e-tailers such as Dangdang and 360buy.com, which are investing heavily in delivery networks and marketing campaigns to attract customers China's second-largest e-tailer in the second quarter with a 12% market share, 360buy is reportedly planning an initial public stock offering in the U.S. that would raise at least $4 billion.

During the press conference, Zhang stressed that Taobao Mall would stick to its script. "Taobao Mall itself will not sell merchandise nor become a retailer," he said.

He also noted that Taobao Mall, which earns money through commissions on transactions that take place on the platform, is profitable—360buy has yet to turn a profit—and is on pace to double the gross merchandise volume sold via the website from a projected RMB100 billion this year to RMB200 billion ($31.3 billion ) in 2012. "We are not weighted down by the low gross margin pressures of taking on our own inventory," Zhang explained, later adding that he "didn't think it was viable" for a single e-commerce company to build out an extensive logistics system in China. Taobao Mall's profit margin is on par with China industry averages, company officials said without giving specifics.

It's unclear whether many of China's B2C websites will want to share their profits with Taobao Mall, whose commission rates range from 1% to 5% of sales, depending upon the type of goods on offer. Zhang argued that the mall's 400 million registered users provide "a huge commercial opportunity" to other B2C sites. By setting up flagship stores on Taobao Mall, they can efficiently reach a large online shopping population, without the high and rising marketing and advertising costs associated with the acquisition of new customers.

That view was echoed by Edison Chih, chief operation officer for Newegg, who in an interview with Alizila said that, while his company set up e-commerce operations 10 years ago and will sell more than $3 billion in consumer electronics in the U.S. and China this year, "we don't want to build the (China) market by ourselves. The more brand exposure we have will help us build our customer base."

Added Intime CEO Liao Bin: "If (Taobao Mall) can offer better service at lower cost, why not give it a shot?" Intime already set up its own B2C website but adding another storefront on Taobao Mall "greatly reduces the cost of customer acquisition," he said.

Yu Gang, president of Yihaodian, which includes Wal-mart among its investors, noted that the e-commerce industry in China was still in its infancy, but consumers were becoming increasingly demanding of online retailers, wanting high quality merchandise, good service, and speedy delivery times. Unlike its sister platform Taobao Marketplace, which hosts hundreds of thousands of small merchants selling inexpensive goods, Taobao Mall requires its members to abide by basic service standards, including guaranteeing the authenticity of their products and providing seven-days-no-questions-asked exchanges or refunds. New B2C members are being asked for security deposits which Taobao Mall can tap into if companies break the rules, and no fakes are allowed on the site.

"We feel Taobao Mall has been raising the bar," Yu said. "We think they are a high-quality, high-standard platform, and it's time for us to be there … it's not time (in China) to cut the cake, it's time to grow the cake" through cooperation among e-commerce merchants.

Jack/Friedman photo

Sat, 10 Sep 2011 20:00:02

The World Is Hyperconnected

Alizila staff — Sat, 10 Sep 2011 17:37:21

The monolithic Zhejiang People's Great Hall in Hangzhou, China, is typically used for Communist Party assemblies, but today it was packed with 2,500 of the most innovative people in the country. Chinese Internet entrepreneurs who sell everything from sheep to Shinola online gathered there for Alifest, an annual e-commerce conference hosted by Alibaba.com.

Thomas Friedman, columnist for The New York Times, gave the keynote address via satellite from Minnesota (where he was attending his high school reunion). He used the opportunity to promote his just-published book—"That Used To Be Us: How America Fell Behind in the World It Invented and How We Can Come Back"—and to sound a warning: remaining competitive in today's networked world where all services are instantly available requires everyone, regardless of their job, to innovate.

Watch Tom Friedman's speech: Part One | Part Two | Part Three | Part Four

Friedman noted that a lot of technological and economic changes have taken place since he published his best-selling book on globalization, "The World Is Flat," in 2004.

Back then, Facebook was a year-old service only open to students, "Twitter was a sound, the cloud was in the sky, 4G was a parking place, LinkedIn was a prison, applications were what you sent to college and Skype for most people was typo," Friedman said. "All of that happened after I wrote 'The World Is Flat' … we've moved from flat world 1.0 to flat world 2.0, from a world that is connected to a world that is hyperconnected--and interconnected."

The accelerating pace of change is nothing new in China. Many in the AliFest audience grew up in rural poverty and have gone on to become Internet millionaires. The farmlands of their youth have given way to high-rises, superhighways and factories and China has become a major economic power.

Despite this rapid progress, continuing to compete on an individual level will require constant self-reinvention, Friedman stressed. Jobs are portable, and fungible, not only because companies have access to efficiency inducing technology and can outsource lower-level jobs, but also because today companies have "access to cheap genius anywhere in the world."

"It's not enough to say 'I'm a lawyer,' 'I'm an accountant,' " he said. "You have to be a creative lawyer, you have to be a creative accountant … Everyone now has to bring something extra to their job to justify their salary. Everyone has to ask, 'What is my extra?'--so I will not be outsourced, automated, or digitized."

In many ways, it was a fitting room to discuss the challenge of succeeding in today’s hyper-competitive marketplace. "All of us now have to raise our game, because 'average' is over in a hyperconnected world," Friedman told the assembled Chinese entrepreneurs. "You will not find your next job. You will have to invent your next job." At AliFest, many already have.

More AliFest 2011 coverage

New Trading Services Debut

Kerry Seed — Sat, 10 Sep 2011 00:00:15

Alibaba.com today announced new initiatives and products designed to make the international business-to-business website safer and more valuable to small and medium-sized businesses that use the site to source products.

Among the new programs announced at Alifest, the company's annual Internet conference at its Hangzhou, China, campus, is an ambitious program calling for on-site inspections of all Chinese manufacturers and distributors selling through Alibaba.com's international website to ensure they are legitimate. "We're taking the existing authentication and verification process, and we're adding another layer to it," said Linda Kozlowski, Alibaba.com's director of global marketing and customer experience.

Next month, Alibaba.com employees will begin visiting some 112,000 of the e-commerce platform's paid China Gold Suppliers in person to physically confirm that the factories exist and conform with members' registration documents, a process that is expected to take up to a year, Kozlowski said. A third-party inspection service will also conduct random, unannounced checks on an ongoing basis to make sure the manufacturers remain compliant. Kozlowski said a recent increase in membership fees will cover the cost of the labor and time-intensive inspections.

The company also announced an expanded escrow program; an online sourcing concierge service called Custom Sourcing; and elaborated on its new Inspection Service, an online solution that allows overseas buyers to hire inspectors in China to verify that goods ordered are shipped as promised.

The announcements are part of a continuing campaign to combat fraud committed by Chinese sellers operating on Alibaba.com who were taking money from overseas buyers for a wide range of products without delivering any merchandise. The illegal activity came to a head in February when Alibaba.com CEO David Wei and COO Elvis Lee resigned in connection with an organized group of scammers that was discovered operating on the site, sometimes with the help of Alibaba employees. The executives were not involved but voluntarily stepped down to take responsibility for not being more aggressive in responding to fraud.

About 100 of the website's workers were fired after the incident, and thousands of fraudulent sellers have been removed from the site.

Alibaba.com has since taken many other steps to restore its reputation. Company officials said the measures appear to be getting results. According to Kozlowski, the monthly number of fraud complaints received by the website have fallen 77 percent since February. Customers have apparently not been deterred. Alibaba.com saw an 86 percent increase in monthly unique page views between July 2010 and June 2011.

Another indication that the company’s campaign to clean house has been effective is that payouts from a special fund set up to compensate fraud victims have fallen 81% since the restitution program was introduced in March of 2010. When the company first created its Fair Play Fund to reimburse victims of fraud, the average monthly payout totaled $164,889. The most recent monthly payout totaled $32,049. "We're very happy with our progress," Kozlowski said.

Chinese Mobile OS Field Getting Crowded

Jim Erickson — Fri, 09 Sep 2011 21:46:44

What's the height of mobile-gadget fashion in China these days? It's not owning your own iPhone. It's launching your own smartphone operating system.

Following e-commerce giant Alibaba Group's July 28 unveiling of a smartphone running its Aliyun mobile operating system, search leader Baidu recently divulged it, too, is planning its own branded platform, a variant of Google's Android OS that will be reportedly be supported by tablet computers and phones from Dell. Not to be outdone, Tencent, owner of China's largest social-networking service, is readying an Android variant, writes Penn-Olson's Steven Millward. Then there's mobile-apps maker Xiaomi's new smartphone, which—ditto—runs its own Android-based OS.

Of the lot, only Alibaba's system was built from scratch. The other three are "forks" (modifications) of the open-source Android software. At a press conference today during AliFest, Alibaba Group's annual Internet conference, Wang Jian, who spearheaded Alibaba's OS development effort, said he didn't know enough about Baidu's offering to compare it with Aliyun. But he did stress that Alibaba's OS is a "very unique architecture" because it is the only system designed for cloud computing. One advantage, he pointed out, is that apps written for Aliyun can automatically update—no need for users to download new versions of their favorite software. In addition to running native applications, the Aliyun OS also is able to handle most Android apps.

Wang, who is president of Alibaba Cloud Computing, declined to reveal sales numbers for the lone Aliyun smartphone on the market, the K-Touch Cloud-Smart Phone W700, made by Beijing Tianyu Telecommunications Equipment Co. He said only that "we are very happy with sales." Wang added that an English-language Aliyun would be available in about a month, and a tablet running the system will reach the market in two months. No word on whether mobile phone manufacturers other than Beijing Tianyu will be making Aliyun cloud devices.

Video Trade Tips from Alibaba.com

Alizila staff — Thu, 08 Sep 2011 16:32:23

Alibaba.com has just released a series of instructional videos that can help small businesses navigate the oft-complex world of international trade. There are actually two sets of vids, one shot in the U.S. and one in the U.K., so SMEs using Alibaba.com can avail themselves of geographically appropriate advice. The videos include in-depth interviews with successful small business owners who offer real-world tips on practical topics such as handling shipping and paying overseas suppliers. Check them out on YouTube or through these links:

U.K. International Trade Guide

U.S."Trading Secrets" Series

New Videos Reveal Alibaba.com Trading Secrets

Alizila staff — Wed, 07 Sep 2011 15:01:27

To help small businesses better understand how to use the Internet to source products from overseas, Alizila produced a series of how-to videos offering real-world insights and tips from successful U.S. entrepreneurs. Available on YouTube, the videos are based on extensive interviews with actual Alibaba.com users who explain in detail how they were able to tap Alibaba.com to solve business problems such as turning their product ideas into reality, doing business with Chinese manuracturers, and protecting their intellectual property.

Alizila thanks the following businessmen and women who generously shared their experiences and know-how in the "Trading Secrets" video series (links below).

Ed Augustavo, Hard 8 Beverages, creator of energy shot drinks;

Jacqui Rosshandler, Eat Whatever, creator of natural bad-breath neutralizers and mints;

Dinesh Wadhwani, Think Lite, creator of energy efficient lighting systems;

Cindy Sawyer, Towelocs, creator of anti-slip clasps for towel racks;

Chris Walworth, Sea Rebel, creator of jet-powered boogie boards;

Mareya Ibraham, Eat Cleaner, creator of natural food wipes and washes;

Katie Shea and Susie Leavitt, City Slips, creators of foldable, portable footwear

TRADING SECRETS VIDS

Alibaba.com Business Tips: Creating a Product

Alibaba.com Business Tips: Protecting Your Ideas

Alibaba.com Business Tips: Pitfalls of International Trade

Alibaba.com Business Tips: Managing Supplier Relationships

Alibaba.com Business Tips: Communicating With Chinese Suppliers

Alibaba.com Business Tips: Turning Ideas Into Reality

Alibaba.com Business Tips: Handling International Shipping

Alibaba.com Business Tips: Finding Suppliers and Manufacturers

AliFest 2011: Top 10 Netrepreneur Awards

Alizila staff — Mon, 05 Sep 2011 15:30:30

This year, Alibaba Group is again hosting the Top 10 Global Netrepreneur of the Year awards ceremony recognizing excellence in e-business. The Hangzhou, China event brings together a diverse coalition of successful netrepreneurs to share their success stories and promote the principles of integrity, cooperation and responsibility in the e-commerce community. As part of the selection process, Alibaba Group representatives interviewed and made on-site visits to more than 100 online companies in China and around the world in search of businessmen and women who exemplify creativity, dedication, passion and the entrepreneurial spirit. The judging panel is made up of business, academic and Internet luminaries, including Song Ling, director general of the China E-Commerce Association; Alibaba Group Chairman and CEO Jack Ma; Zhou Qiren, dean of the China Center for Economic Research; Lenovo Group Chairman Liu Chuanzhi; Li Ning, chairman of Li Ning Co. and others.

See the list of awards

See the list of 30 finalists

Leading up to the awards ceremony, Alizila ran a series of profiles of some of the more interesting Web companies that were considered for the Netrepreneur of the Year award. Read these stories by clicking on the links below.

Online Cowboy Rounds Up Buyers

A Home Run In Chinese Home Decor

Selling the Sizzle and the Steak, Too

Catching Lightning In a (Baby) Bottle

Turning Straw Into Gold Online

Beekeeping, Bathrooms and Eating Bitter

2011 Netrepreneur Finalists

Alizila staff — Thu, 01 Sep 2011 18:45:43

CAO Jie: damai.cn

Damai.cn, a leading Chinese event-ticketing website, is an expert in providing marketing and ticketing services to the entertainment and sports industries. Damai's goal is to become a distribution and marketing platform that provides integrated and comprehensive marketing and ticketing services for entertainment, sports, filming and tourism products.

CAO Qing: sugargirl.taobao.com

Sugargirl started a young and popular brand on taobao.com called 7gege. It centers its product design, marketing and sales around interactions with the customers. Sugargirl also operates two other brands named IAIZO and OTHERMIX. It aims not only to sell more fashion products but also to expose its customers to hip culture and trends.

CHEN Wei: Shanghai Yongcheng Display Products Manufacture Co., Ltd.

Chen Wei moved his company online in 2000 and was part of the first netrepreneur generation in China. E-commerce not only helped him to survive the economic crisis but also opened up the international market for his company. Yongcheng provides an end-to-end service package to customers in addition to the products it sells. The company's goal is to become the leading display product manufacturer and service provider in the world.

CUI Wanzhi: Hefei Eflove Fashion Co., Ltd

Before establishing Eflove Fashion, Cui Wanzhi used to be a street vendor and also ran a grocery store and a book rental shop. He was once homeless, but now his brand ranks among the top 20 brands in woman's fashion on Taobao Marketplace. In 2010, the annual transaction volume of his business reached RMB30 million. His goal is to reach RMB80 million this year. Mr. Cui offers internship opportunities to college graduates as a way to give back to society. He helped to set up a local e-commerce association to contribute to the e-commerce ecosystem in the region.

DAI Yuefeng: Hunan Yunifang Networks Co., Ltd

As a cosmetic company, Yunifang focuses on the niche market of masks. With the help of Internet, Yunifang's niche products became extremely popular among online shoppers. Since its establishment in 2006, Yunifang's business has witnessed an annual growth rate of between 300% and 400%. Yunifang's online sales volume has exceeded that of many world famous brands and the company has paid special attention to marketing through word of mouth.

FANG Jianhua: Guangzhou Huimei Fashion Co., Ltd (INMAN)

Fang Jianhua first learned about e-commerce in 2004 at Alibaba Group's 1st Netrepreneur Summit. He registered his company to be among the first batch of China TrustPass suppliers and from there his company set off to do business online. In 2008, the company introduced the "INMAN" brand.

FENG Jieqi: Xinlanttou

Xinlanttou is a leader in the cosmetics vertical mall on Taobao Marketplace. Xinlanttou achieved close to RMB50 million in annual transaction volume in 2010, and has gradually become a shopping platform for multiple branded cosmetics products catering to female professionals. From targeting the low-end consumer market to focusing on high-income consumers to transforming into an e-commerce service provider, Xinlanttou is adapting to as well as driving the changes and development of the e-commerce industry.

GUO Ke: Luoyang Hatha Trading Limited

Within a span of three years, Hatha has become a leader in the yoga supplies industry. Guo believes that Hatha should go beyond this by building the leading yoga brand in the world–80% of the world's yoga supplies today are produced in China, but there is no world-class yoga brand in the country.

HE Guanbin: Iwode Customized Garment Limited

Iwode was founded in 2006 by He upon his return to China after completing his studies in the U.K. Before the rise of online shopping in China, Iwode was in the first batch of online garment companies in the country. In less than three years, Iwode toppled the customization model of the traditional garment industry, successfully creating a new model based on standard modules. Through engaging in online sales and marketing and offering offline customer experience, Iwode is now a leader in Souther China's customized men's garment industry. Having secured a large investment from IDG, Iwode currently plans to promote its "minimal asset, zero inventory" model across China.

HU Jinghui: 5I5J.com

5I5J.com has developed into a popular nationwide professional real estate website in China thanks to the use of the Internet. In 2011, the group is starting to tap into the new areas of online property purchase, rental and housing loans through e-commerce.

Kuk-Hyun KIM: Neo Buzz Demolition Tools Co. Ltd (Korea)

Neo Buzz is a professional manufacturer of construction equipment. The company, with its competitive asphalt and hydraulic breaker products, currently exports to more than 20 countries around the world. Neo Buzz has been focusing on doing online trade through Alibaba.com since 2009. In 2010, it secured a US$300 million order from an Egyptian buyer through the Internet. To Neo Buzz, the biggest advantage of e-commerce is that it removes barriers of geographies and time zones so the company can serve its customers around the world anytime.

LAO Fuwen: Dongguan Kidsme Trading Company Limited

After 33 years of participating in export trade, Lao Fuwen transformed his business to focus on the domestic market through e-commerce when the financial crisis set in. The move has unexpectedly given him hope and a new goal: to offer world-class baby and kids' products to Chinese consumers at reasonable prices.

LI Xiaojun: Yi Fu Tang

Founded in 2006, Yi Fu Tang is a leading tea merchant on Taobao Marketplace. By being one of the first to introduce consumer protection measures such as "no questions asked" product exchange and a quality pledge, Yi Fu Tang achieved the status of having five crowns in its Taobao Marketplace seller profile and 100% positive feedback from buyers. Yi Fu Tang now has a team of nearly 200 employees and a modern production line. The company has also signed deals with different Longjing tea plantations that have an aggregate area of 3,000 acres for stable, direct tea supplies from farmers. Li is now working toward the goal of surpassing Lipton in the domestic teabag market within the next 10 years. His dream is to make Longjing and other high-end tea products available to all.

LI Yonghua: Shanghai Aozzo Home Deco Company Limited

Li Yonghua has been widely recognized for his achievements in light fixture exports. With his acute business sense and innovative spirit, he successfully transformed his export business into one focusing on the domestic market. Today, Aozzo has already become the top light fixture brand on Taobao Marketplace. The quality, service and innovative designs it offers have also made it the most popular light fixture brand among white-collar workers on the Internet.

LIU Jianguang: Xiamen Longyi Apparel Company Limited (Mr. Zero)

Liu Jianguang has established a reputation for being a successful e-businesswoman for turning from a senior executive at a multinational company in Xiamen into the general manager of a privately-owned apparel enterprise, and further into the head of Mr. Zero, an influential male apparel brand. Mr. Zero is an emerging online apparel brand that was established less than three years ago. The company achieved more than RMB20 million in sales in 2010 and is raising the target to RMB100 million this year. Going forward, the company hopes to grow into an online apparel group that offers multiple clothing brands and caters to different age groups.

LI Lianzhu: Homekoo

Homekoo offers furniture sets and provides customers with the option of digitally customizing their living space, mixing and matching furniture styles and placement. Customers can then seamlessly order furniture based on this digital customization plan.

LIU Pengfei: Sky Lantern King

Liu started his sky lantern business in just a month. Within a year his business flourished and his subsidiaries achieved an annual output value of RMB100 million. He now operates eight factories. Liu also set up a special fund to encourage more university students and graduates to start their own businesses.

LI Zhiyong: Guangzhou Sen-rong Handbags Manufacturing Co., Ltd.

Guangzhou Sen-rong has established its position in the industry as a manufacturer of environmentally friendly products and is a supplier on Alibaba.com. More than 90% of their orders are received from buyers on Alibaba.com and the company is slowly shifting from the traditional OEM model to creating their own, environmentally friendly brand. They will offer products made from 100% recycled materials using their own technology processes.

LI Yan: Shopin.net

Shopin.net offers high-quality, discounted products to attract buyers and developed an inventory management system that allows their online and offline sales to be synchronized. In 2009, the company's online sales volume was a couple million renminbi; in 2010, it reached RMB40 million and Li aims to surpass RMB200 million in 2011.

LIANG Na: Guizhou Simple Love Accessory Wholesale Company

Liang Na comes from a rural town and established Guizhou Simple Love which has since become one of the largest jewelry and accessory wholesale companies in Guizhou.

LU Chuang: Justcar

Justcar is a netrepreneur brand that specializes in selling auto accessories and currently has more than 120 employees. Justcar launched its online storefront on Taobao Marketplace in 2006 and has since established itself as a prominent brand. The company recently launched an online storefront on Taobao Mall.

MENG Hongwei: Shandong Jiaxiang Huanggaixiang Xilai Cattle Breeding and Rearing Farm

Meng Hongwei and his brother started this online cattle-sales business, taking advantage of the opportunities that e-commerce could offer them. Both brothers are physically disabled but through e-commerce they found a way to start a business that sells more than 20,000 cows and sheep a year to buyers around the world.

Shinya SAMURA: Nissen Co., Ltd.(Japan)

Nissen, Japan's largest mail-order company, was established in 1970 and currently has more than 28 million registered users; in other words, 1 of every 4 Japanese person is a Nissen member. With the dawn of the Internet age, Nissen has become a front-runner in the e-commerce industry as well as one of the top Japanese online shopping websites. In September 2010, Nissen's China platform was official launched and Alipay became an accepted payment method, thereby allowing Chinese consumers to gain access to the newest Japanese fashion trends and items.

RUAN Huajun: Zhejiang Fenix Pearl Biotechnology Co., Ltd.

Located in Zhuji, Zhejiang Province, Fenix has already become the top seller of pearl powder products on the Internet. Fenix's operating characteristics revolve around allowing their customers to interact, share, review products, and enjoy discounts with group purchases. Fenix has more than 200,000 loyal online and offline customers.

SHI Chaojie: Zhengzhou Zhengdian Electronic Technology Co., Ltd.

Three years ago, Shi was repairing mobile phones. Today he is the president of a company that achieved revenue exceeding RMB20 million in 2010. The company started with two employees and has now grown to a team of nearly 100 employees.

SUN Han: Sui Ningxian Meiyijia Furniture Co., Ltd.

Sun began his business in a rural area of China and has since inspired other rural netrepreneurs to take part in e-commerce.

YAN Huajie: PTow King Co., Ltd. (Taiwan)

PTow King's pursuit of handmade, customized and high-quality leather goods has helped it to become a successful company that cooperates with international buyers and also major mobile phone manufacturers.

YU Fangwei: Suzhou Tiandicai Steel Manufacturing Co., Ltd

Suzhou Tiandicai joined Alibaba.com in 2008 and since then has been taking part in global trade. In 2011, it became the first company in Jiangsu province to take part in the Japan earthquake rebuilding efforts and received tens of millions in orders from Japanese buyers.

ZHANG Tongwei: Badelite

Zhang started his own business from the ground up three years after he graduated from university. His company has since become a leading exporter of solar water heaters. His products are sold to more than 82 countries and regions around the world.

ZHAN Shengsheng: Ezalipay (Taiwan)

Ezalipay is an online shopping website launched by Neweb Technologies Co., Ltd. that consolidates more than 100 Taiwan e-commerce websites to help small and medium-sized Taiwanese brands sell their products over the Internet. In cooperation with Alipay, Chinese consumers are able to purchase Taiwanese products from the platform with ease.

2011 Netrepreneur Awards List

Alizila staff — Thu, 01 Sep 2011 18:34:22

2011 Top 10 Global Netrepreneurs of the Year

This award honors netrepreneurs who have made outstanding achievements and contributions in their area of focus and have exhibited such values as integrity, openness, sharing and responsibility.

The Netrepreneur Integrity Award

This award will be presented to the netrepreneur who best adheres to and promotes the principles of integrity in their use of e-commerce.

The Creative Marketing Netrepreneur Award

This award honors the netrepreneur who achieved the greatest impact by special and creative marketing campaigns.

The AIiFinance Integrity Award of the Year

This award honors the netrepreneur who adheres to the principles of integrity in their application for e-commerce credit loans.

The Most Eco-Friendly Netrepreneur Award

This award honors the netrepreneur whose business model is closely related with conservation and who has made great contribution to environmental protection.

The Annual Rural Netrepreneur Award

This award honors the netrepreneur who runs an online business in rural China and helps to develop the local economy via e-commerce.

The Annual Top 3 International Buyers Award

This award honors international netrepreneurs who effectively develop business using e-commerce and adhere to the principles of integrity.

2011 E-commerce Ecosystem Awards

Top 10 Most Trusted E-commerce Vendors of the Year

This award honors the top 10 e-commerce vendors in e-commerce partner industries such as logistics, finance, IT and marketing who have exemplified excellent service quality and the utmost level of integrity.

Best E-commerce Village of the Year

This award will be presented to the area or region which has most successfully launched and fostered large-scale e-commerce activity.

Best Netrepreneur Alliance of the Year

The Best Netrepreneur Alliance of the Year Award will be presented to the alliance which has best organized multi-level e-commerce activities on a regular basis and also effectively promotes local e-commerce development.

Best Netrepreneur Incubation Award

This award recognizes the university, vocational school or training institution that has made bold innovations in teaching practice, integration of theory and practice of e-commerce as well as improved its students' ability to engage independently in entrepreneurism.

Best Netrepreneur Development Park Award

This award recognizes the development park that has build up a comprehensive e-commerce ecosystem and actively created a favorable environment for netrepreneurs to facilitate their rapid growth.

Netrepreneur Summit Speakers Biographies

Alizila staff — Thu, 01 Sep 2011 18:29:58

FENG Lun, Chairman, Vantone Real Estate

Mr. Feng was born in 1959 and was a university graduate after the Cultural Revolution. Since 1991, he has helped lead the creation and development of Vantone Group, establishing Beijing Vantone Corp. in 1993. He also co-founded China Minsheng Bank and served as a business director; planned and headed brokerage companies in Shaanxi Province; led Wuhan International Trust and Investment Corporation; and is establishing a company that is waiting to be acquired and restructured in the northeastern region in China.

Shannan STEVENSON, President, Procter & Gamble Greater China

With more than 20 years of brand-building and market development experience across the company and throughout the world, Mr. Stevenson is one of the most broadly experienced business leaders in P&G history.

Mr. Stevenson joined P&G in 1987 in the United Kingdom, and for two decades led P&G’s U.K. businesses as well as operations in Turkey, Russia and Egypt, overseeing P&G businesses including Fabric & Home Care, Health & Beauty Care, and Baby & Feminine Care. Before his move to China in May 2010, he was Vice President, Laundry Western Europe of P&G.

Mr. Stevenson was born in 1964 in Fareham, U.K. He has an M.A. in Economics from Edinburgh University.

FAN Zhiming, Vice President, Alipay

In 2010, Mr. Fan led Alipay’s financial service team in launching the "Quick Pay" service, which today has over 20 million users. Before joining Alipay in 2007, Mr. Fan co-founded the Open Union Information Technology Corporation.

Simon Hu, Vice President, Alibaba Group

Mr. Hu is responsible for Alibaba Group's financing and loan operations. He joined the group in June 2005 and has served in several roles at Alipay including senior manager of the risk management department and director of the financial cooperation and compliance departments. In October 2008, he was appointed senior director of Alibaba.com’s credit and payment division.

Prior to joining Alibaba Group, Mr. Hu held management roles at China Construction Bank and China Everbright Bank.

Thomas Friedman, Pulitzer Prize-winning journalist and author of "The World is Flat"

Thomas L. Friedman is an internationally renowned author, reporter, and columnist—the recipient of three Pulitzer Prizes and the author of five bestselling books, among them "From Beirut to Jerusalem" and "The World Is Flat."

He was born in Minneapolis in 1953 and grew up in the middle-class Minneapolis suburb of St. Louis Park. He graduated from Brandeis University in 1975 with a degree in Mediterranean Studies, attended St. Antony's College, Oxford, on a Marshall Scholarship, and received an M.Phil. degree in Modern Middle East Studies from Oxford.

After three years with United Press International, he joined The New York Times, where he has worked ever since as a reporter, correspondent, bureau chief, and columnist. At the Times, he has won three Pulitzer Prizes: in 1983 for international reporting (from Lebanon), in 1988 for international reporting (from Israel), and in 2002 for his columns after the September 11th attacks.

Mr. Friedman's first book, "From Beirut to Jerusalem," won the National Book Award in 1989. His second book, "The Lexus and the Olive Tree: Understanding Globalization" (1999), won the Overseas Press Club Award for best book on foreign policy in 2000. In 2002 FSG published a collection of his Pulitzer Prize-winning columns, along with a diary he kept after 9/11, as "Longitudes and Attitudes: Exploring the World After September 11." His fourth book, "The World Is Flat: A Brief History of the Twenty-first Century" (2005) became a #1 New York Times bestseller and received the inaugural Financial Times/Goldman Sachs Business Book of the Year Award in November 2005. A revised and expanded edition was published in hardcover in 2006 and in 2007. "The World Is Flat" has sold more than 4 million copies in 37 languages.

In 2008 he brought out "Hot, Flat, and Crowded," which was published in a revised edition a year later. His sixth book, "That Used to Be Us: How America Fell Behind in the World We Invented and How We Can Come Back," co-written with Michael Mandelbaum, will be published in September 2011.

Mr. Friedman lives in Bethesda, Maryland, with his family.

Wang Jian, Chief Architect, Alibaba Group

Mr. Wang Jian is responsible for building a world-class technology team and further developing the technology framework and infrastructure for Alibaba Group companies. He also serves as president of Alibaba Cloud Computing, which was established in September 2009 to provide advanced data-centric cloud computing services. He joined Alibaba Group in September 2008.

Prior to this, Mr. Wang was assistant managing director at Microsoft Research Asia, where he oversaw research projects of user interfaces, machine learning and large-scale data processing as well as the Microsoft adCenter Lab in Beijing. He was also responsible for research into core technologies and infrastructure related to data-driven software (including SQM and the data structure and analysis of Watson), technologies related to Microsoft's advertising platform and seamless personal computing.

At Microsoft, Mr. Wang led the development of the SQM large-scale data processing system, which was used to help develop Office 2007 and dozens of other Microsoft products. Technologies developed from the adCenter lab in Beijing have been widely used in Microsoft's new advertising platform. He invented the digital ink technology that was shipped with the first release of the Tablet PC, OneNote 2003, Windows XP Tablet PC 2005 edition, Windows Vista and the next-generation Windows platform. He also led a dedicated team to invent a model-free user switching interface which supports Asian languages for application to software, including Windows XP and Office XP. His handwritten mathematical formula recognition tool was launched in 2005 and even demonstrated to President Hu Jintao during the President's visit to Microsoft in 2006.

Prior to joining Microsoft Research Asia in 1999, Mr. Wang worked at Zhejiang University in Hangzhou, China, as a professor and Ph.D. course tutor for the department of psychology as well as head of The National Key Laboratory on Industry Psychology. He graduated from the psychology department of Hangzhou University in 1990 and has a Ph.D. degree in engineering.

Mr. Wang is a standing committee member of the China Computer Society (CCS), which recognized him in 2008 with an award for outstanding contribution. He was honored by the Young Computer Scientists & Engineers Forum under the CCS as one of China's outstanding young IT professionals. He is also an editorial committee member of the American publication Communications of the ACM.

LU Xipeng, Dean, Taiwan University of Science and Technology

Mr. Lu is a PHD graduate from the University of Wisconsin–Madison campus, and also obtained a master's degree from Taiwan's Tsinghua University. He is currently the Dean of Taiwan University of Science and Technology and an information management professor. He was the former Dean of Honors College; Dean of Taiwan University of Technology, the Head of Information Management Department; an Executive Officer of EMBA School of Management; and a director at the E-commerce Center. He researches marketing, knowledge management, customer relations management and strategic management for the e-commerce industry.

Nelson YIP, Founder of Hong Kong Unleash Foundation

Mr. Yip is a founder and executive director of Hong Kong Rehabilitation Power; CEO of EP Power Limited, Appetizup Limited and EP Venture Limited; co-founder of Energy Saving Concern Alliance and the Hong Kong Electronic & Technology Association; and an official representative of the Paralympics Equestrian Events. He holds several executive positions on both governmental and non-governmental committees and holds a BSc degree in Statistics and Computer Science, an MA degree in Quantitative Analysis in Business and an MBA degree.

LIN Yucheng, CEO, Sumcl.com

Mr. Lin is founder and CEO of sumcl.com. He founded Xiamen Sumgo Tea Co., Ltd and serves as the deputy chief of the Xiamen B2C Association. Before running his own business, Mr. Lin worked at Dell. He has rich experience in supply chain management.

YE Haifeng, CEO, Mbaobao.com

Mbaobao Limited has more than 10 years of operation experience in the bag and suitcase industry. Mr. Ye forayed into e-commerce and seized the opportunities it provided in 2003 by becoming a free member on Alibaba.com. He continues to learn about and explore e-commerce and e-commerce platforms and as a result has driven the growth of his business.

Jet LI, world-renowned martial artist, movie star, social sector leader and social entrepreneur

Born in Beijing, Mr. Li began studying Chinese wushu at the age of 8 and was a five-time consecutive All-Around National Wushu Champion of China (1975-1979). He was selected by the Chinese government to perform wushu at various diplomatic functions in over 45 countries, including for President Richard Nixon of the United States.

At the age of 17, Mr. Li kicked off his 30+ year film career with his lead role in Shaolin Temple in 1982. Since then, he has starred in countless classic Chinese martial arts epics, such as Once Upon a Time in China, Fist of Legend, Hero and Fearless. His film credits also include numerous international hits such as Lethal Weapon 4, Romeo Must Die, The Mummy 3 and Expendables. In 2010, Mr. Li starred in the critically acclaimed film Ocean Heaven, which depicted the struggles of a terminally ill father teaching his autistic son how to survive on his own.

In 2007, Mr. Li founded One Foundation, which advocates broad-based participation in philanthropy and volunteerism as a way of life. With its innovative mass/micro philanthropy model of "every 1 person + every 1 month + donates 1 dollar/yuan = 1 big family," One Foundation has been a major force in the development of China’s nascent philanthropy sector. On January 11th, 2011, One Foundation officially announced it had received legal status as an independent public foundation, becoming the first NGO to successfully complete this transition and setting an example in China’s NGO sector.

In 2010, Mr. Li and the One Foundation established China’s first Philanthropy Research Institute in partnership with Beijing Normal University in order to address the critical human capital shortage in China’s philanthropy sector. The Institute aims to cultivate the next generation of social sector leaders in China, both through degree-granting programs as well as corporate training programs.

In his tireless efforts to promote humanitarianism, fraternity, devotion and peace to our human family, Mr. Li has also served as the inaugural Goodwill Ambassador for the International Federation of Red Cross and Red Crescent Societies (IFRC) as well as Goodwill Ambassador for the World Health Organization (WHO).

In 2011, he officially launched a new social enterprise called Taiji Zen International in partnership with Jack Ma. This new movement’s aim is to promote health and happiness across the world through the practice of Taijiquan as well as understanding of Taiji philosophy.

Jack MA, Chairman and CEO of Alibaba Group

Mr. Ma is the lead founder of Alibaba Group and has been chairman and chief executive officer of the company since its inception in 1999. He is responsible for the overall strategy and focus of Alibaba Group.

As a respected business leader, Mr. Ma was chosen by the World Economic Forum as a "Young Global Leader" in 2001 and selected by China Central Television (CCTV) and its viewers as one of the Top 10 Business Leaders of the Year in 2004. He was named one of the 25 Most Powerful Businesspeople in Asia by Fortune in 2005, a Businessperson of the Year by BusinessWeek in 2007 and one of the 30 World's Best CEOs by Barron's in 2008. In 2009, he was recognized as one of the TIME 100: The World's Most Influential People by TIME, one of China's Most Powerful People by BusinessWeek and one of the Top 10 Most Respected Entrepreneurs in China by Forbes Chinese edition. He also received the 2009 CCTV Economic Person of the Year: Business Leaders of the Decade Award. In 2010, he was named one of Asia’s Heroes of Philanthropy by Forbes Asia for his contribution to poverty and disaster relief in China, and one of the Chinese Businesspeople of the Year by Forbes Chinese edition.

In addition, Mr. Ma currently serves on the board of Softbank Corp. In 2009, he also became a trustee of The Nature Conservancy’s China program and joined the global board of directors of the organization in 2010.