www.managedITmag.co.uk 17 INTERVIEW to run their business have grown by almost 95%. We’re confident that being a generalist platform, serving companies whether they source products to use or to sell, is a source of growth for us. We are also seeing good growth for products that are very European, like French wine and Italian food or machinery from industrial regions of Europe, so we will continue to reinforce our supply network and offer buyers more diversified products in terms of their geographical provenance and product type. MIT: What do you see as Alibaba. com’s other core strengths? ML: From the start, Alibaba.com has been a platform for connecting buyers and sellers digitally and globally. As such, our strength lies in developing digital tools and infrastructure that make the sourcing experience more fluid, more efficient, more productive and lower cost both for buyers and sellers. As we move into the AI era, our development of AI technology is very focused on solving the practical problems of SMEs. In the case of digital sourcing or global procurement, we have already developed AI tools that allow B2B buyers to get data-driven, tailor-made recommendations on suppliers. We also make it easy for them to connect with global suppliers through our communication tools. On the seller side, in addition to digital services that ensure the trustworthiness of transactions, we have developed AI tools that automatically generate highly professional digitalised catalogues that allow suppliers to get a new product or new offer to market in a fraction of the time it used to take. By fully digitalising their catalogues, suppliers can also increase their visibility, because when a product is easily searchable, it is more likely to be found by buyers, who are also refining how they search for products. SMEs have very limited resources in terms of time and network, with suppliers from key industrial regions around the world, and a very diverse choice of product categories, covering almost 40 industrial verticals not just with consumer finished products but also raw materials and parts and components. We believe that strengthening both the supply and the buyer side is going to drive the growth of our platform. MIT: What is your business model? Do you charge a commission for sales? How do you generate revenue? ML: Our business is based on a subscription model for sellers, a little bit like a digitalised trade fair. Sellers, i.e. suppliers, pay an annual fee to have a presence on the Alibaba.com platform, which allows them to showcase their products to buyers from almost 200 countries and regions around the world. They can also invest in paid marketing services to increase their visibility. We also provide different services to buyers to give them the best digital sourcing experience, for example trade assurance and logistics services. MIT: What key digital sourcing trends are you seeing in Europe at the moment? ML: We see two big trends. As I mentioned, Alibaba.com is essentially a generalist platform: we have final consumer products on the one hand and raw materials and equipment on the other, and both product types have recorded very strong sales. On the consumer side, there’s a huge growth in products like shoes and fashion accessories, which have increased by more than 153%, and in consumer electronics and smart devices, which have grown by more than 73%. Where companies are not just buying products to sell, we see that a lot have started to use our platform to source commercial equipment they need to operate their business. Sales of equipment that, say, a restaurant or a hotel might need to an ecosystem partner to grow their e-commerce. Last but not least, CoCreate Europe will stage the final round of CoCreate Pitch, the pitch competition we have created to give financial support and visibility to SMBs that want to showcase innovative product ideas they would like to develop. This year, we have brought CoCreate Pitch over to Europe and opened it up to all global SMEs, with no limit on the type of product they can pitch. It could be a consumer product, it could be an industrial product, it could be some great innovation. The whole purpose of CoCreate is to convey the idea that everybody can co-create products and business ideas with Alibaba. com, so we would encourage SMEs of all sizes and at all stages of their development to enter to be in with a chance of winning not just financial funding but also the extra visibility we will give them. MIT: You mentioned the importance of the European and the UK markets. Can you give me some idea of Alibaba.com’s growth in Europe, and whether that’s being driven by buyers or suppliers. ML: We have seen very promising growth both on the buyer side and the seller side. The number of buyers in Europe earlier this year was 37.7% higher than in the same period last year. In the UK, the number of buyers increased by over 53%, outpacing the average for Europe as a whole. We believe that one of the drivers for this growth is the effort we have put into strengthening our global and European supply network. For example, at the start of our financial year the number of products offered by European sellers had already increased five-fold. We strongly believe that developing and investing our efforts on the supply side will also drive growth on the buyer side, where there is huge demand from European buyers to source both locally and globally. This is a strength of our platform – a very diverse supply continued...
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