Northwest businesses already benefiting from Alibaba
WOODINVILLE, Wash. -- Mark Zoske understands the impact of Alibaba. Fourteen years ago he started Saltworks in Woodinville. It's now the largest gourmet salt producer in the world, and he's just now starting realize the potential boost Alibaba can have on his sales.
"It's absolutely been good for us," said Zoske. "It's given us access to countries that we never dreamed of pursuing".
The giant ecommerce conglomerate of websites will begin trading on the New York Stock exchange Friday, making its founder Jack Ma and two key investors, Yahoo and Softbank, tens of billions of dollars in what should be one of the largest initial public offerings of all time.
For the last two years, The Northwest Cherry Growers have been selling their highest grade premium cherries on Tmall.com, just one of several China centric websites run by Alibaba. This year, the association hopes to sell 600 tons of cherries, all of them airlifted to Tmall customers in China without 48 hours at a promotional price of $7 per pound.
"Alibaba is a force to be reckoned with in the US when they come here," said Kevin Hu, Director of International Marketing for the Northwest Cherry Growers.
Think of eBay and Amazon combined and you have size and scope of Alibaba. But it's run differently because its founder Jack Ma is a bit different.
The former English teacher learned business from westeners visiting his home town of Hangzhou. In the early 90s, he traveled to Seattle, where a friend showed him something new that would change his life -- the internet.
It wasn't easy for Ma to start Alibaba. Communist leaders where reluctant to approve his idea of first building a China-only style yellow pages online. But eventually he find provincial leaders to allow him to create a platform to promote china only online businesses.
Alibaba started with 13 people in 1995 in Ma's apartment. Now it's on the eve of having one of the largest market caps of any company in the world.
"Of all of the entrepreneurs in China, he's probably the one with the most global view which is one of the reasons he's expanding into the US before other entrepreneurs do," said Porter Erisman, who for eight years was Alibaba first international marketing vice president. He made a film about his experiences called "Crocodile on the Yangtze".
"I wanted to present to American audiences what it was like as an American working inside a chinese internet company that was going through all the ups and downs of a startup," said Erisman.
The filmmaker from Denver says a start up in China is really no different than one in the US. The only differences are cultural, but the drive to crush the competition is the same.
Alibaba boasts roughly 280 million users, nearly the size of the population of the United States. It's more like Ebay than Amazon because it's strictly an ecommerce platform and doesn't hold inventory like Amazon. It has two major online websites Taobao.com and Tmall.com.
"One way to think of Alibaba and Taobao as is more like a dating site that matches buyer and seller but in the end its up to the buyer and seller to decide if they are going to deal together," said Erisman.
Seattle entrepreneur Keri Andrews is leery of investing into Alibaba. She searched the site for a manufacturer for her business YouKickAss.com, which produces customized personal action hero figurines.
"It was tough to tell the difference between a manufacturer that was going to be a reliable company versus one that might just be totally ripping people off," said Andrews.
Alibaba has opened its first US only online store,11main.com, which is a storefront for several boutique retailers. Erisman says Alibaba learned it's lesson when it fought off a change by eBay to take over China's online commerce several years ago. He says Alibaba learned that what might work in one country doesn't necessary work in another.
"american's shouldn't expect Alibaba will move in and try and take on Amazon in a head to head battle," said Erisman.