Global dreams of SMEs getting helping hand from Ma's Alibaba

Beijing - If someone were to be nominated as the person who changed the way companies do business, then Jack Ma tops the list of contenders.

The 47-year-old Ma, with prominent cheekbones, a trim figure, and passionate speech, has long been regarded as an icon who helped companies, especially the numerous small and medium-sized enterprises (SMEs), to tap into the global market through the Internet.

Ma's involvement with SMEs began in 1999 when he and 17 others set up Alibaba.com Ltd, a cyber marketplace for businesses to meet and trade with one another. "Before the history of Internet, no company could help over 50 million SMEs. Today we are trying, and I feel proud of that," Ma said in September at an industry forum.

By 2000, more than a year after the company was set up, Alibaba had 500,000 registered users worldwide and had evolved as a platform for sellers and buyers to connect with each other. That year also saw Alibaba fast-tracking its internationalization by setting up overseas branches.

The big picture at the time, however, was not that promising because the Internet industry in China was in the preliminary stages of its evolution. By the end of 1999, the US had 110 million Internet users, compared with only 8.9 million in China.

With SMEs still a minority among Internet users at the time, Alibaba eventually slowed its pace in going global by shutting a number of overseas offices. The first few years were indeed a tough time for Ma.

"We had zero revenue for three years. It was difficult ... The only thing that encouraged us to continue to do so were the letters and e-mails of thanks that we got continuously - every week, every month," he said.

While Ma was riding out the rough early years, things started to quickly change. In 2002, a year after China joined the World Trade Organization, the total value of China's imports and exports soared to $600 billion and was ranked fourth worldwide.

By then, China had 59.1 million Internet users, and the average time each one spent online was 9.8 hours a week.

All of this helped turn the tide for Alibaba, and it made a profit of 6 million yuan ($942,000) in 2002. The years that followed went much more smoothly for Alibaba, including its listing of shares in Hong Kong. But running a company that provides services for numerous SMEs is no easy task, Ma said.

The company hit another tough time in 2008 after the global financial crisis, when large numbers of Chinese firms, especially SMEs, had to close down. To solve the problem of the decline in overseas demand for Chinese exports, Alibaba invested $30 million to attract about 4 million overseas buyers in 2009.

"It's not the coldest when it is snowing, but when the snow is melting," Ma said in 2010, hinting that the following time would be a tough period for SMEs.

This year is the "coldest", and, for Ma and his team, the main task is to transform Alibaba from a platform that simply posts sellers' and buyers' information to one on which all the processes of a business transaction can be made. "Our job is to change from 'meet at Alibaba' to 'work at Alibaba'." It has acquired six companies in the past two years to make itself into such a platform. The company had 73 million registered members by the end of September this year, and offices in more than 70 cities across the world, 12 years after it was founded.

But that does not seem to be enough for Ma. Back in 1996, Ma had made his "five-year plan" clear: to create 1 million jobs, serve 10 million SMEs, and create output worth 100 billion yuan.

"People say 'Jack, if you make Alibaba successful, that means you are pulling a million tons of ship on the top of the Himalayas' and I say 'yes, we will carry that thing down'," he said. "And we did."