Chinese e-commere company Alibaba plans a sales target of $1 trillion worth of goods within 5 years, founder Jack Ma says. To help get there, he's encouraging American and European small business owners to sell their goods in China.
He's on the way. The company's gross merchandise volume was recorded in March 2015 to have reached around $393 billion, which is higher than the previous year by up to 46 percent.
To achieve company growth, Ma believes that small businesses in the U.S. are the key. He wants to bring these businesses to China and even wants their products to cater largely to China's growing middle class. According to Ma, who is making the rounds in the U.S. to encourage small businesses to investigate Chinese market opportunities, the middle-class population in China is almost as large as the entire population in the U.S., which was estimated as almost 312 million in mid-2011. In a decade or so, Ma says that number will grow to as many as half a billion people.
"We want to connect small business in the West with the largest, fastest-growing market in the East," said Ma, executive chairman of Alibaba Group Holding Ltd. "Chinese consumers will get to buy the American products they want." In turn, Ma continued, this "will help create American jobs and increase U.S. exports."
Since 2010, cross-border purchases by online shoppers in China have spiked to $20 billion. This clearly shows just how big the opportunity there is for American businesses today to sell their products to China compared with the opportunity Chinese businesses have when they sell their products to the U.S.
"The demand for good products, good service, is so powerful, so strong," said Ma, adding that at present, only 2 percent of the company's business is done outside of China. Ma hopes that, eventually, this would grow to 40 percent.
Part of the reason Ma wants to empower small businesses in the U.S. to sell via the company's e-commerce platform is the desire to change China's focus. For the past 20 years, the country has focused entirely on exporting. Ma believes that it is high time for China to focus more on importing and doing more purchases. The company has 350 million buyers now, with that number projected to grow to half a billion.
"Chinese people love American products," said Ma. "Ebay and Amazon did a great job in America. But I think American small business can sell things to China."
Ma said that around 95 percent of the companies that sell their products through the Alibaba platform are small businesses. His vision is clear. He sees the company as a huge Internet-based world trade organization with the goal of helping to break down the barriers in trading through e-commerce.
"I think this is our mission, helping doing business easier," said Ma at a CNBC Exclusive interview. "We choose the name Alibaba because it is a global company. It is founded in China but it was created for the world. I think our goal is the next 10 years, I hope that 40 percent of our GNV is from outside China. Not because we need money from outside of the world. Because our mission making sure we helping small business doing business easy anywhere in the world."
