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Alibaba

China’s Alibaba partners with banks, agencies to introduce B2B financing and rating services

Alibaba and trade show giant UBM also plan to pilot a new online platform connecting suppliers and buyers at five Asia-based conventions in Hong Kong, Kuala Lumpur and Shanghai

PUBLISHED : Wednesday, 13 January, 2016, 5:02pm
UPDATED : Wednesday, 13 January, 2016, 7:19pm

China’s e-commerce juggernaut Alibaba announced on Wednesday that it has partnered with more than 25 banks and credit rating agencies globally to provide cross-border trade financing for SMEs as well as a new credit reporting service.

The move comes as the company continues to ramp up its business-to-business (B2B) ecosystem globally by cooperating with offline industries.

By building up the credit profiles of Chinese SMEs based on business-related data, Alibaba.com’s credit reporting service can help overseas buyers identify trustworthy trading partners and provide Chinese suppliers access to innovative financing options
Sophie Wu, Alibaba

Alibaba is an online platform that evolved from a directory of Chinese suppliers to a one-stop platform providing a variety of services for international buyers and suppliers, including logistics and business verification services.

“To Alibaba, regardless of B2B exports or imports, the ecosystem is very important. The Alibaba mission is to make it easy to do any type of business,” Alibaba Group CEO Daniel Zhang said at a conference Tuesday in Hangzhou, Zhejiang province. The group is headquartered in this affluent city in East China, also the birthplace of founder and chairman Jack Ma Yun.

Mainland Chinese partners for Alibaba’s latest initiative to finance SMEs include Alibaba-backed internet bank MYBank, as well as Bank of China and China Merchants Bank.

Currently, only Chinese SMEs are able to take out loans from Alibaba to fund cross-border trades.

Alibaba also aims to launch its own rating platform (credit.alibaba.com) later this year. It said it will rate Chinese suppliers who join the platform. Credit ratings are determined by an analysis of Alibaba’s big data, public records and ratings from traditional credit scoring firms.

“By building up the credit profiles of Chinese SMEs based on business-related data, Alibaba.com’s credit reporting service can help overseas buyers identify trustworthy trading partners and provide Chinese suppliers access to innovative financing options,” said Sophie Wu, president of Alibaba’s B2B business unit.

READ MORE: Alibaba begins search for next generation of Hong Kong entrepreneurs

Over the last year, Alibaba has implemented a number of initiatives to create a more robust ecosystem.

In July, a trade assurance programme was implemented to give buyers coverage on their purchases on Alibaba. Should a buyer find quality issues with the goods, or receive a shipment late, they are entitled to a full refund.

The company also works with different shipping companies to provide logistics solutions to buyers who use the Alibaba platform.

In December, the e-commerce juggernaut inked a deal with tradeshow giant UBM, where both companies will combine their online and offline strengths to develop an online platform to help connect buyers and suppliers at trade fairs.

Interested parties can look up prospective partners and reach out to them before a trade show. Tim Cobbold, chief executive of UBM, described the platform as a “matchmaking” service for businesses, a view echoed by his colleagues.

READ MORE: China’s Alibaba, Baidu and Tencent join hands to promote ‘Internet Plus’ strategy

“We’re very excited about this co-operation because we really believe that for our customers, exhibitors or buyers, we can make the face-to-face meeting much more efficient and increase the return on investment for them if we can connect the offline world with the digital world,” said Jime Essink, president and CEO of UBM Asia.

Essink said that the Alibaba and UBM will pilot the new platform at five Asia trade shows in Hong Kong, Kuala Lumpur and Shanghai.

“[This online and offline partnership] has never happened before, because originally the trade show industry tended to look at the development of online as a threat to its business,” said Cobbold.

“Through this partnership, we can create a new range of products and services, the aim of which is to generate more returns through efficiency and more business for the exhibitors,” he added.

Alibaba’s Zhang said that as more offline companies integrate online operations, opportunities are rife for the B2B sector to seek out new channels and business models.

“The business-to-business era is just taking off,” he said.