Featured Executive: Alibaba Founder and Chairman Jack Ma
The event is part of Ma’s commitment made on January 9 during a meeting with then President-elect Donald Trump to create one million American jobs, a figured based on the assumption that American companies will need to increase hiring as their sales to Chinese customers grow via usage of Alibaba’s platforms.
Ma and Alibaba President Michael Evans met recently with a small group of media representatives while in New York to share their vision and Gateway ’17 details. Below is an edited version of the conversation.
Q: Why did you pick Detroit for Gateway’ 17?
MA: American businesses in the East Coast and West Coast already have a lot of opportunities in China and in Asia. But businesses in Detroit, especially a lot of small business there, farmers there, I think it’s time to let them have more opportunity to reach China through the internet. We badly need food stuff, good services from outside China. Because China cannot – with the pollution, with all the things - we cannot produce that many food products in China. So Midwest America is the place where there are so many farmers and small business that is one of the reasons why we chose Detroit.
EVANS: One of the other reasons for Detroit is we have tremendous support from both the governor and the mayor. And of course that’s a big part of encouraging small businesses to come to something that’s new and innovative and potentially very important to the future of their growth and their development. So the support of the local community has been wonderful, and particularly the governor and the mayor.
The second is that, this is not just about agriculture; we’re inviting entrepreneurs to come to the conference, we’re inviting brands to come to the conference and lots of SMEs. So when you think about consumer product groups, when you think about apparel, when you think about home products and many of those things being manufactured in Detroit; those are the SMEs that we want to come to the events and that we’re encouraged because they’re now registering. Those are the products that we know the Chinese consume is interested in buying in addition to agricultural products.
Q: How big of a part did President Trump play in the selection of Detroit for the Gateway event?
EVANS: On the selection of Detroit, the President, the White House, didn’t play any role…That was our decision and we basically canvassed a number of potential cities because we plan to start in Detroit but we will move this event each year for the next five years.
MA: In the past few years, and this is what Alibaba believes in, most of business, we called it B2C. And we think because of the internet ecommerce. In the future it’s going to be C2B, consumer-to-business.
I think in the U.S., in areas like Detroit, they have got a very good manufacture base and foundation infrastructure. So the consumers in China, they may like, in the future, tailor-made products, custom-made. This is the trend in the future, in the next 10 years of manufacturing. So we think that the U.S. manufacturer in the future might have a great opportunity to C2B model, consumer-to-business model.
Q: Have you had a chance to talk to President Trump about Gateway before the announcement?
MA: Yes, we discussed this idea last time when I visited Trump Tower, talking about the helping small business in America, to sell their products through our network to China and to Asia. The internet can help with small business, create more jobs. He was very, very excited, and he was very supportive. And this is the thing – this is one of the key drivers that we’ve been doing to create one million jobs, which we promised America, and support Trump’s idea of Made in America.
Q: What are the greatest opportunities for U.S. businesses to tap into China’s growing middle class?
EVANS: We are very focused on identifying products that we know today, based on our big data from our 500 million consumers in China, consumers will have an interest in buying. For example, baby and mother products are very, very popular. Food products, which we’ve discussed; the broad assortment of agricultural products. So, for example, we sell a lot of Washington State apples today, we sell cherries today. These are things that we’re already selling to the Chinese consumer. Health products, beauty and cosmetics products. Fashion and apparel. And of course anything that’s fresh and high quality in terms of vegetables. So there are lots of different categories. Now, within those categories there are many subcategories. And so what we’re doing is trying to target the small businesses that we think will most benefit from the known consumer pattern of the Chinese consumer.
MA: Yes, I think the people who join will be across all U.S. But mainly because it is the first time we do this in America, so maybe from local. And we’ve been doing that a lot in China, for China events like that we might have like 20,000 entrepreneurs and businesses from all of China. And so, this is the first time we’re doing the U.S. and we want to get enough experience and understand the market even better.
The thing we want to do is we want stuff from Detroit. And we already got quite a lot of Detroit – small business in Detroit are using our Alibaba services like Kellogg’s, Gerber, Hush Puppies, Kitchenaid and Whirlpool. So we already got some local business there and we hope that with this conference, we can educate more people and we can share more experience – share more experience about how to do ecommerce, how to reach China’s consumer market, how to talk to the third parties. So this is the knowledge we want to share.
Q: What are some of the opportunities that can materialize from an event like Gateway?
MA: In China right now, on all platforms, Tmall and Taobao, we have 12 million small businesses that are already hosted and selling through our platform. We find that each small business will hire at least three jobs – three people to work, and that’s not even including the logistics and others.
So this is our plan, is that in next five years, we will help one million small business, farmers, entrepreneurs, to help them to list their business on our site so we can. We are trying to help these small business to reach the global market but start with China.
And I think if we can help one million small business, American business, online, on our platform, each small business just created one job, not three jobs, like China, we can create at least one million jobs. Today let me tell you that we created over 33 million direct and indirect jobs for China because of the infrastructure we’ve been building for China. So we are very confident if we can work better the next five years we can create one million jobs. It is not that difficult.
Q: Can you elaborate on the one million jobs commitment and how you will reach it in the next five years?
MA: We have a lot of experience because in the past 18 years of Alibaba, we have always been focused on small business. And we are strong believers that small businesses are the main driver of job creation. And we think that the internet can help small business to go global. Today, because of ecommerce, we can help small business to globalize their market. And a small business in the Midwest can now have the chance to go to China and now it is our chance.
Like I said, we created more than 33 million direct and indirect jobs in China by supporting more than 12 million small business on the platform. It also needs a lot of partnerships so we are working with – through this event in Detroit, Gateway’ 17, we are working with a lot of state-level government SME administrations and we’re working with logistic companies, payment and banking systems. So I think if the model starts rolling, lot of jobs will be created on the service provider like the logistics, packaging. So this is something that we view – it’s the ecosystem that we’re building up.
Q: Are you planning to work with state-level and local governments across the country?
MA: Yes, we – let me tell you, one of these key factors that we did in China was we worked with almost every provincial government. We’re even working with the local county governments to support local farmers to check the quality, to give enough of facilities and investments on the infrastructure in order for the local farmers and small business to sell and to receive the things.
So we think the same thing should be done here. So that’s why our office here is contacting a lot of state governments, especially the SME-related organizations, trade related. We’re talking to them so we’re inviting a lot of government offices joining this Gateway 17. And if it is possible, we are going to host another huge China entrepreneur event. We believe that in the past we called them entrepreneurs, in the future, we call netrepreneurs. Every business, small business, has to be online. So we are going to host some big netrepreneur conference in China. We will invite a lot of American small business, maybe government organizations, go in there, see how we did it in China, and they can come back with the knowledge and knowhow. Then they can do better jobs.
EVANS: We clearly are partnering with state and local governments in all of the states where we find small businesses. That’s very, very important and our government affairs people in Washington have a huge amount of work ahead of them to make those connections and do that work.
And we’re also obviously in touch with the small business administration, the local chamber of commerce, the national chamber of commerce, so that’s a whole dimension of making sure that we’re touching all of the right people. And then this, as I think Jack alluded to, that this is not all about Alibaba. We also have strategic partners who are working with us and they include people like UPS, Goldman Sachs Small Businesses, HSBC, Shopify which provides software services.
These are the types of things that are very, very important and to make sure that in providing the services and supporting the small businesses as they seek out that China and the Asia consumer opportunity that we’re working with lots of local partners here the same way that we work with local partners in China.