Alibaba is the beginning of a new global trade system

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Interesting article here that sees Alibaba not simply as another ecommerce company like Amazon or ebay but as a trading platform for any business, and hence a strategic tool for China to take over world trade and banking.

The platform not only provides a front end for customers to interact with businesses, the businesses deliver products via their supply chains, and payments are processed in the back end, so the company also becomes a bank.

” it’s not just that China has well over a billion people – it’s now reaching into markets like India and Africa, consolidating those bi-lateral trade corridors. This means China has captured markets that account for more like three to four billion users, in places with fast emerging middle classes. It is using a web-based platform approach, to the degree that this constitutes a revolution in the actual structure of trade.”

“What’s relevant to Alibaba is that it has integrated logistics with payments with merchant to consumer trade. What you have there is the beginning of a new global trade system. That’s what I think people miss.”

“A growing host of new businesses, often global SMEs, will be trading through platforms like Alibaba. So the banking side of the business will gravitate towards Alibaba, and there may be one or two other platforms competing alongside them.”

“So you should see Alibaba being a platform for Chinese soft power developing the Indian small business community, incentivising the Indian small business community to sell into China, helping the Indian small business community to grow.”

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