Revolutionizing the Financial Markets

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Featured Story
William Laraque,
Managing Director, US-International Trade Services
Global Trade Platforms
are the Future
Much to its credit, Alibaba's leadership has taken a holistic approach
to its global organization. Jack Ma, its CEO expects Alibaba's sales
to double by 2020 and to reach $1 trillion in 5 years. Quarterly
revenues grew by 28% year on year, reaching 20.2 billion yuan or
$3.3 billion.
A small demonstration of Alibaba's e-commerce efficacy was
demonstrated when Macy's and Costco agreed to use TMall, one of
Alibaba's online platforms to sell goods to Chinese shoppers. Use of
Alibaba's bonded warehouses in China's free trade zones provide the
logistical and tax justifications for this move.
Here then are some of Alibaba's online platforms:
Cainiao – is a consortium which runs the digital platforms of more
than a dozen logistics providers, 1890 distribution centers and
100,000 dispatch points.
Yonghui – so called O2O or online to offline, provides the customer
the ability to shop and pay online while collecting goods at a
brick and mortar facility or having goods delivered at home.
Suning – will open online electronics gadget and appliance stores
with TMall while Cainiao promises delivery in as little as two
hours.
Ant Financial – coordinates all Alibaba Group financial initiatives,
has provided 400 billion yuan in micro loans. Ant has a default
rate of < 2%, is going public and has an expected market cap of
$50 billion.
Alipay – Alibaba's successful payments by escrow system, processes
120 million transactions per day.
Sesame – Alibaba's credit scoring system.
Alimana – Alibaba's online marketing service.
Unilever, in a June 2015 deal, decided to use Alibaba's marketing
services for China, after its sales in China fell by 20% during the last
quarter of 2014.
Reference is provided as indicated portions of the following are
excerpted directly from a ChinaBusinessNews.com article of 13
January and the South China Morning Post.
Excerpts
Alibaba Group Holding (NYSE:BABA) has entered into a partnership
with more than 25 credit rating agencies and banks globally, in
order to make cross-border trade financing available for Chinese
Small and Medium Enterprises (SMEs). The Chinese e-commerce
giant is also aiming to introduce a new credit reporting service, it
announced on Wednesday.
“The move comes as the company continues to ramp up its
business-to-business (B2B) ecosystem globally by cooperating with
offline industries,” reports South China Morning Post.
Alibaba is China's biggest e-commerce firm and the company
is readily investing in other businesses to expand and diversify
its product offerings. In addition, the online entity also aims to
provide a variety of services for international buyers and suppliers,
including services such as logistics and business verification
services. Mr. Zhang (of Alibaba) highlighted that for the e-commerce
giant, the ecosystem was of immense importance regardless of
Business to Business (B2B) exports and imports.
Financing
Alibaba will carry forward its initiative to finance SMEs by teaming
up with MYBank, a Chinese bank backed by Alibaba Group. MYBank
was set up in June 2015 with a capital of $655 million (4 billion
yuan). The purpose of setting up the bank was to provide financial
assistance to small and macro businesses along with online
consumers. Moreover, China Merchant Bank and Bank of China will
also provide assistance to the e-commerce giant. At present, Alibaba
will provide loans only to Chinese SMEs to finance cross-border
transactions.
Alibaba is also planning to launch its self-structured rating
website, to be known as “credit.alibaba.com.” The platform is set to
be launched at the end of this year. Through its own rating platform,
Alibaba will rate Chinese suppliers who will join the company.
Sophie Wu, President (of) Alibaba's B2B business unit told South
China Morning Post, “By building up the credit profiles of Chinese
SMEs based on business-related data, Alibaba.com’s credit reporting
service can help overseas buyers."
“Credit rating at the rating platform will be determined by
conducting an analysis of Alibaba’s big data, public records, and
ratings from credit scoring firms,” she further added.
My words follow:
Alibaba is rapidly coming to grips with what is necessary in