E-Commerce DaySantiago, Chile

Alibaba.com Presentation

May 27, 2015

Michael LeeHead, International Marketing & Business Development

Americas

Part I:

• Alibaba Group overview

• The international B2B opportunity

Part II:

• Main challenges for online B2B

• Solutions for those challenges

Overview

Part III:

• Alibaba solutions

• Alibaba core features

Part IV:

• Payment options

• Shipping & logistics

B2B B2C Services Payment* Logisticst

The original international B2B site.

International B2b (“little b”) site.

China domestic B2B site.

China domestic B2C/ C2C site.

China international B2C/ C2C site.

Taobao Global

China domestic B2C site.

Tmall Global

China international B2C site.

China domestic group buying site.

Cloud computing.

Cloud OS.

Algorithms and Big Data.

Advertising platform

Payment and financial servicesLogistics network

* Please note that Alipay is a division of Small and Micro Financial Services Company, a related Alibaba company.

t Cainiao Internet Technology Ltd. and China Smart Logistic Network (CSN) are a related Alibaba company.

International E-Commerce Related Business Units

The original international B2B site.

China domestic B2C/ C2C site.

China domestic B2C site.

Payment and financial services

Where we stand today?

China consumer-to-consume(C2C)More than 500 million registered users 800 million products and Top 20 most visited sites in World (Alexa.com)

Business-to-consumer (B2C)70,000 merchants selling products

Online Payment GatewayMore than 700 million registered users, 170 financial partners and support 14 currencies

A truly global marketplace with 40+ million registered users in more than 240 countries and regions

2.5 million supplier storefronts5,900+ product categories in 40+ industriesGlobal Traffic Ranking on Alexa.com: 77

No. 1 in E-Commerce categoryNo. 1 in International Business and Trade category

• The US was the leading e-commerce market in the world up until this past year— the international opportunity is huge!

• The online B2B market is roughly double the size of the B2C market, yet for many is a relatively new concept.

• B2B products and services are hugely in-demand in international markets, and are easier to manage the logistics, payment, and marketing.

The International Online B2B Market Opportunity

B2B $559b

B2C$250b

Forrester Research, “Key Trends in B2B eCommerce for 2013

The Average Sourcing Cycle

Search/ Discovery

Evaluate Negotiate Transact

Average sourcing cycle: 3.3-4.2 months

52% of time spent on searching for / identifying appropriate suppliers

20% of time spent on screening / sorting proposals

18% of time spent on RFQ development / RFQ response

10% of time spent on contract negotiations

Traditional Sources of Supplier Information

- Referral (colleagues, associates)- Trade shows- Industry magazines, trade journals

- Industry associations- Trade directories- Existing suppliers

Credibility/ trust

Payments, shipping &

logisticsCustomer ID

Communication: language & information

Challenges to International Online B2B (Online businesses generally)

Authentication & verification & Trade Assurance

E-credit line, transaction,

global freight forwarders

Global & domestic

customers

Communication tools:

translation & access to global

markets

The Internet & Alibaba are disrupting international trade barriers

What does Alibaba.com do?

• Alibaba.com is an online international B2B directory that primarily exists for the purpose of promoting products and companies.

• Alibaba hosts storefronts/ companies (which we refer to as suppliers) as well as products.

• The primary goal of Alibaba.com is to matchmake global buyers, suppliers, and products to increase international trade opportunities.

• In 2015, Alibaba.com is upgrading from a information based website which mainly matched buyers and sellers, to a B2B transactional website by offering online contract system, financing solution and upcoming logistic solution

• Although the website looks like a consumer products marketplace, it is in fact designed to accommodate business-to-business international trade opportunities.

Alibaba.com: Global e-commerce platform for small businesses

Global Buyers

Global Suppliers

- Typically small businesses

- Ten to a few thousand employees

- 5,900+ product categoriesin 40+ industries

- Companies of all sizes

- Entrepreneurs, e-retailers, buying agents, MNCs, etc.

- Diverse end-markets

B2B: Largest online suppliers and buyers network trading raw materials, components, finished goods cross border and also leading in many domestic markets

52%

17%

15%

9%4%3%

Others U.S. Europe (excl. U.K.) India U.K. Australia

Geographic Breakdown of Registered Users

Over 40 million users International & domestic

*Data is from 12/2012

Alibaba.com Core Features

• The list on the right is a comprehensive set of all features available on Alibaba.com

• Alibaba.com is built and focused on the buyer experience— which is important for global sellers to keep in mind as they design their

Find Products

AliSourcePro- Fast & effective RFQ

system- Accredited suppliers

- Comparison tool

Wholesale Checkout

- Competitive prices- Seasonal products

- Latest styles & trends

Find Suppliers

Advanced Search- Country-specific- Company search

- Filter for Trade Assurance, e-credit

line

Trade Assurance- Ensure on-time shipment & quality

of orders from China- Online contract

system

Inspection Service- Reliable, rated

inspectors- Secure payment

- Affordable service

Contact

Contact Supplier- Offline contact- Secure Email

messaging- Company and user

lead qualification tools

Trade Manager- Chat in real-time- Send files of any

size- Translate messages

instantly

Multi-language marketplace

- 14 languages for selling

- Country and language specific

versions of alibaba.com

Transact & ship

e-Credit Line- Trade financing that

allows users in certain countries to buy now and pay

later

Trade Assurance- Allow buyers to submit PO online so

that:- Covers on-time

shipment- and product quality

Shipping marketplace

- VAS marketplace that includes international

inspection and freight-forwarders

International Marketing

Memberships - Paid and free memberships that allow global sellers

to market their products

Offline marketing- Alibaba promotions

at Trade Shows, through social

media, and success stories

Payment optionsIn general, you want to ensure that you accept payments in a manner that is:

• safe and secure for you and your buyer

• convenient for your buyer (every country has a slightly different common business payment standard/ method)

Typical payment options for cross-border e-commerce:

• T/T (Telegraph Transfer)

• L/C (Letter of Credit)

• D/P (Document against Payments)

• D/A (Document against Acceptance)

• Western Union

• MoneyGram 

• Alipay or other online payment gateway such as Paypal, Square, or International Checkout

• Credit cards (for smaller-sized B2B and B2C transactions)

• Freight forwarding

• For B2B business, sellers work out with buyers at what stage the buyers take possession of the goods, and then arrange transport from port-to-port

• Shipment usually are determined by size (cubic meter -less than container load/ LCL or by full container-load)

• Pricing varies depending upon the size, time of year, type of container origin, and destination

• While these factors can seem daunting when setting prices— websites such as uship.com (international), shiphawk.com (currently US), globalshopex.com, borderfree.com, or individual freight forwarders’ sites— oftentimes provide tools for estimating these costs or can customize solutions for your business

• Final-leg delivery

• Typically this is more important for cross-border B2C e-commerce. This can involve using carriers such as UPS, FEDEX, DHL, or National Postal Services

• In some instances due to antiquated treaties, NPS’s can be the most cost effective solution, depending on size, origin, and destination

Shipping and logistics

What are your opportunities for leveraging Alibaba in Chile? • Alibaba.com

• Source internationally

• Sell internationally

• 1688.com

• Sell on Alibaba’s China domestic B2B platform

• Aliexpress

• Source small quantities of consumer goods

• Alipay

• Integrate with Alipay to enable faster and more convenient payment for Chinese customers

• Tmall Global

• Sell direct to Chinese customers B2C (typically for large brands)

International Trade: No longer just the realm of big corporations

Online marketplaces can enable small businesses to overcome a number of barriers to international trade

Challenges Solutions

Limited capital and resources

- 24 x 7 product showcase and global reach

- Highly efficient online marketing tools

- Low-cost financing solutions

Lack of foreign market knowledge / connections

- Active trading community- Online market research tools- User forums / knowledge sharing- Robust global online company

database

Lack of confidence in doing international trade

- Trade Assurance- On- and offline partnerships (with

trade show organizers, trade associations, government bodies, big buyers, etc.)

- Education materials, seminars, etc.

Thank youGracias

Michael LeeHead, International Business Development & Marketing

Americas Region

Authentication & VerificationWhat is this?Why is this necessary?What are the benefits?

Communication Tools

12 Multi-language sites Industry & customs data Messaging

Payment, shipping, and value-added services

Buyer tools Online trade shows Wholesale checkout

Lead Qualification

Appendix 10: Customizable Minisite sample