Alibaba: China’s genie in the bottle

Posted on June 8, 2011

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We are constantly told that China is the factory of the world.

It’s true – choose any item of clothing that you’re wearing right now and there’s a high chance it was made in China. If none of your clothes were made here, then pick almost any item on your desk. Even your precious iPhone started its life in China.

Since working here, I have met people who come from large cities where the main industry of their hometown is producing one or two key products. My Chinese friend Ryan, who comes from Yongkang, works in a factory that makes metal door knobs. Almost every factory in his city produces some form of metal hardware – letterboxes, window frames, locks, door knobs. Almost everyone living in his city works for a factory. So in other words, he lives in a giant Bunnings Warehouse factory. Other cities like Yi Wu are a haven for wholesalers where you can buy almost any item you can think of.

The other day, I had the opportunity to visit the headquarters of Alibaba, one of China’s great success stories. Alibaba is one of the global leaders in e-commerce, and in 2010, Alibaba had a growth rate of 43.4% in revenue.

Basically, the company offers Chinese wholesalers and foreign buyers a platform to trade online – it’s sort of like eBay for wholesalers. Alibaba also runs an eBay equivalent for individual Chinese customers, TaoBao.

Alibaba is the online child of China’s many factory cities, places like Yongkang and Yi Wu. What is most phenomenal about Alibaba is that its key market is made up of domestic buyers. Stories like this remind us that as the nation continues to develop economically and socially, China’s local consumers will  continue to grow dramatically and increase local spending.

China is no longer just a factory producing for the world, it is also creating products for itself.

Alibaba employs nearly 50,000 people. Its headquarters in Hangzhou are modern, colourful and user-friendly. The buildings are made of high glass windows looking out onto statues and parks. The walls are painted in splashes of orange and green. There is a cafeteria, a gym, and staff are rewarded with ‘Alidays” – holidays for staff members and their families at Alibaba. On International Children’s Day, Alibaba encouraged its staff to bring their children to work for the day. These are hardly the working practices we would typically associate with a large Chinese wholesaler.

Of course, Alibaba is more of an exception than the rule. When I visited China’s Online Shopping Mall, an e-commerce platform for fashion, I met with high-paid executives peddling local fashion designs that would later be sold to global brands like H&M and Zara. But the women and men who worked to sew those clothes were paid less than $1 per garment – and none of the executives were afraid to share that information. In fact they seemed almost proud of their shrewd money-saving management skills.

So we can only hope that Alibaba represents the future for China. Our understanding of Chinese factories, markets, big businesses and working conditions are changing. And that in itself is a good thing. Earlier this year, Shenzhen – another factory city, perhaps China’s most famous – introduced a minimum wage for its workers, which is another step in the right direction. In a country of over 1.3 billion people, stereotypes are impossible.

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Posted in: Travel, Writing