Michael Evans, President of the Alibaba Group, speaks to Fran O'Sullivan.
Chinese e-commerce giant is on the lookout for small and medium-sized businesses keen to sell to growing markets.
Billionaire Jack Ma dominates the Chinese e-commerce world through Alibaba, the company that made him China's richest man.
He is also the man who electrified a luncheon for John Key in Beijing last April when he thanked New Zealand "for your benefit to the whole planet".
Now the e-commerce giant is expanding Down Under as it seeks to deliver on Ma's vision of connecting 2 billion consumers with small businesses from around the world.
This week Alibaba held a low-key roadshow to build on an agreement forged with NZ Trade and Enterprise to provide a conduit for NZ's small and medium-sized enterprises (SMEs) to major developing consumer markets such as China, India and Brazil.
Alibaba's international expansion is being driven by Michael Evans, a former Goldman Sachs vice-chairman.
Evans explains that Alibaba already has close to 2000 brands, retailers and merchants from Australasia who access the Chinese market through Tmall and Tmall Global. About 500-600 of those are from New Zealand.
But the group Alibaba is now focused on are small businesses.
"We would like to, working with partners, create a platform where we can bring hundreds of thousands of small businesses onto a single platform so we can aggregate their products and be able to connect small businesses to the Chinese and the rest of the Asian consumers," Evans says.
"It is very hard for small businesses to go onto one of our platforms because with the cost of getting set up and marketing and branding yourself in one of a billion product listings, it is very hard for people to see your product.
"With so many small businesses representing such a significant part of the economies and the workforce in both countries, this is a very very high priority for us.
"This is Jack's vision where he connects the small businesses of the world to the consumers of the world."
Evans says those consumers are largely from developing markets - China, India, southeast Asia, Russia, Brazil.
"Places where we either have businesses today in the case of China, Russia and Brazil. And where we are building our businesses in India and southeast Asia," he says.
"That is the consuming group and they are very, very important for the future, as in order to get to 2 billion consumers they have to be in those markets."
The point is that those consumers want to buy the world's best products - from Australia, New Zealand, Japan, Europe, and the United States.
Michael Evans, President of Alibaba Group. Photo / Doug Sherring
Evans joined Alibaba as president in August last year and is executing the group's rapidly-developing globalisation strategy.
At Goldman Sachs, he drove the investment bank's Asian business and his links with Ma pre-date Alibaba's sharemarket listing. He also serves on Alibaba's board.
Evans' Auckland roadshow coincided with Joe Biden's last-minute visit, which made for some interesting diary clashes.
But Evans, Alibaba Australia managing director Maggie Zhou and business development director John O'Loghlen (a Kiwi formerly on NZTE's China Beachheads board) still met with the Prime Minister, Cabinet Ministers Steven Joyce and Todd McClay, some of their NZ customers, local banks and NZTE.
Evans explains Alibaba's strategy is to aggregate thousands of small NZ businesses onto a platform where their products are pooled and shipped at a cost low enough to make it good for both consumers and sellers.
No one's done that before ... but that is a big part of our strategy in New Zealand.
"No one's done that before ... but that is a big part of our strategy in New Zealand," he says. "Some of the trials that Maggie and John are putting together for Australia and New Zealand are really, really important.
"And I said this to the Minister of Trade - we have to show that there are creative ways to do things that can make governments comfortable and trade ministers comfortable that this can work and can be really beneficial on a reciprocal basis."
McClay said he sees considerable opportunity for NZ SMES to access big markets such as China and India through the developing platform.
At the recent Business 20 forum, Ma promoted an initiative to establish a new global e-commerce platform, the Electronic World Trade Platform or e-WTP, connecting global SMEs through logistics and inclusive financing. Ma reckons the the World Trade Organisation (WTO) is really only for the "big guns".
Alibaba's Jack Ma is China's richest man. Photo / Getty Images
"We should have WTO 2.0 or something called e-WTO to help small businesses grow," Ma said.
The proposal is expected to be aired at the upcoming G20 Summit in Hangzhou, China - also the home of Alibaba's headquarters.
The Alibaba proposition is attractive to NZ's smaller businesses, but there are potential sticking points.
At a luncheon, businesses wanted assurances that Alibaba had a focus on standards and product integrity, given the scale of counterfeiting in China.
As a Forbes magazine report put it: "The scale of fakery is enormous."
Evans says the company is investing in technologies "both covert and overt" which allow it to trace products. "If you think about the sophistication and the funding of counter-feiting globally, it is enormous ... so we have to fight hard and we have to run fast to get ahead".
We need to make the banks feel comfortable that our strategy is not to disrupt or disintermediate their relationships and business with their existing customers.
Alibaba also plans to promote Alipay - a third-party online payment platform with no transaction fees - to the significant local Chinese population who want to buy goods through its domestic website Taobao, even though they live in New Zealand.
Evans says an even bigger opportunity, which will continue to grow, is to service Chinese tourists.
"Of course most Chinese travellers don't have credit cards so they bring cash and they bring the hope and expectation that some day they will be able to pay with an app for the hotel, pay for the restaurant meal and to shop in the various interesting stores."
A successful rollout is probably dependent on co-operation from the banks, and Evans met with local banks in Auckland.
"We need to make the banks feel comfortable that our strategy is not to disrupt or disintermediate their relationships and business with their existing customers," he says.
"So we are focused on the Chinese populations that live in the country and the travelling Chinese tourist.
"Most businesses would love this because the Chinese tourist spends about two times what the average tourist spends in restaurants and stores and nice hotels and things like that," he adds.
"This is something that is good for local business".
During the roadshow, Evans stressed Alibaba's intention to be a "good citizen" in New Zealand.
The free trade agreement the two countries signed in 2008 has not been an "Open Sesame" for smaller NZ businesses. But Alibaba is confident it has the answer.
