Donald Trump meets Jack Ma as E-commerce Goes Rural and International
2017-01-10 16:29 GMT+811000km to Beijing
Written by CGTN reporter Han Peng
Jack Ma, the founder and chairman of China's e-commerce giant Alibaba Group, met with President-elect Donald Trump at Trump Tower on Monday. Ma pledged to create 1 million US jobs by allowing American small- and medium-size businesses to sell goods to China through Alibaba's e-commerce platforms.
Over the past few months, Donald Trump has repeatedly attacked China on trade issues. He accused the country of stealing jobs from the U.S., and says he may raise tariffs to 45% on made-in-China goods.
Will Alibaba have a smooth business expansion in the U.S. market? The short answer is -- it depends.
Two factors will work in favor of Alibaba's US expansion.
US President-elect Donald Trump and Jack Ma, Chairman of Alibaba Group, emerge from the elevators to speak to reporters following their meeting at Trump Tower, January 9, 2017 in New York City./CFP Photo
First, a Trump victory in the US and Brexit referendum in the UK shows rising protectionist sentiment in the West. But Jack Ma seems to take them more as business opportunities than as an obstacle. Last year, he raised an ambitious goal of building an "electronic world trade platform", or e-WTP, and got it approved by world leaders on G20 Summit 2016. The plan was simple: using e-commerce to enable small business owners around the world to sell goods around the world.
In my exclusive interview with Jack Ma on this issue, he said the reason why some people hate globalization is because they are not equally benefited. While big multinationals are selling products around the world, it would be huge obstacles for SMEs to find their customers overseas, promote their products in another country, solve logistics difficulties and go through customs procedures efficiently, just to name a few. (See more on CGTN’s reporter Han Peng's exclusive interview with Jack Ma.)
Now his business expansion is focused on vendors from the country's Midwest. Ma told reporters at Trump Tower that during his meetin with Trump, they discussed allowing US products such as "garments, wine, and fruit" to be sold on his platform -- exactly in the spirit of e-WTP.
Second, Alibaba is one of the most recognized e-commerce platforms in China, and will effectively increase sales of US goods to Chinese customers.
Online retail sales grew 26 percent to nearly 500 billion dollars during the first three quarters of 2016, faster than the retail sector as a whole. The Singles' Day sales event of Alibaba generated sales of nearly 18 billion dollars during 24 hours.
US President-elect Donald Trump walks from an elevator with Alibaba Executive Chairman Jack Ma after their meeting at Trump Tower in New York, US, January 9, 2017./CFP Photo
If you think that these purchases are only made by China's urbanites, think again. There is an increasing demand AND supply of goods from China's rural areas.
Since 2014, Alibaba has had a plan to invest one and a half billion dollar over three to five years, to set up its service in the country's rural areas. During my work in China, I paid a visit to several remote villages, and found that people there are using donkeys, motorboats and tricycles to complete the "last mile delivery.” The roads are difficult, but they are glad that they are finally connected with the global market.
In a word, China's e-commerce is becoming both rural and international at the same time.
However, there are obstacles ahead.
There are concerns over China's counterfeit products on its ecommerce platforms. The US has put its Taobao platform back on the "notorious market" list recently. Taobao is Alibaba's most popular consumer-to-consumer shopping website. Last week, Alibaba filed its first ever lawsuit against its vendors on the platform for allegedly selling counterfeit goods, hoping to get rid of the reputation. But considering the large number of vendors, and the easiness to sign up to become a vendor, there is still tough job ahead in regulating its platform.
All in all, e-commerce is just an extension of trade issues in reality. Jack Ma said the discussion with Donald Trump included talk on the need for China and US to improve their relationship. Trump says they had "a great meeting", and the world will see how the two business tycoons from the two economic superpowers will shape the political ties between China and the US.