They thought they knew China - NOT

kw: book reviews, nonfiction, business, business practices, entrepreneurs, memoirs

I have about all the entrepreneurial talent of a house cat. I've been in business a couple of times and managed to come away with my skin intact, but not much else. From time to time I like to read of remarkable business success. I suppose I'm looking for some secret or effective method. But I must confess, so far the value of such books to me is almost purely as entertainment.

I had a supervisor many years ago who would often speak of having a "business reason" for doing something. One day I asked her, "What is a 'business reason'?" She said, "It is something people are willing to pay you to do." Though her emphasis was on the word "something", I realize that my own business troubles arose more from the "you" part, that is, the "me" part. Maybe they'd pay "someone" to do that something, but somehow, rare it was to find someone who would pay "me" to do it. Simply put, I couldn't attract customers.

I've just read Alibaba's World: How a Remarkable Chinese Company is Changing the Face of Global Business by Porter Erisman, who was an executive with the company from 2000 to 2008. Clearly, Jack Ma, the English teacher who founded Alibaba, knows how to attract customers. His key to attracting the largest number of online customers in the world's most populous country, starting before most of them were online, has been his knowledge of the Chinese way of thinking and of doing business.

Just to give one example that I think I understand a little. Midway in the rise of Alibaba, Inc. to dominance in China's e-commerce scene, Jack Ma very deliberately took on eBay. Part of it was psychological jousting, which induced the eBay CEO, Meg Whitman, to publicly react and back the company into a corner. That also garnered lots of free publicity. But a bigger part was that eBay had simply cloned its US-based business as a China-facing portal, presumably with translated text (the book doesn't happen to mention so, but it is a logical assumption). They got some business because they were the only game in town. But Americans and Chinese think differently (I've learned that first-hand, having been very active in a church that is home to many Chinese-born Americans and their children). In particular, Americans are not just comfortable doing business at arms' length, so to speak; they practically demand it. But the Chinese want to get to know their opposite number and establish a relationship of trust before they will do business. So the Alibaba B2B sales portal made communication between buyer and seller easy, including a chat feature and easy ways of getting into face-to-face contact if they wished.

Actually, eBay does allow a buyer to contact the seller, such as for asking a question, and I've taken advantage of that. But because it isn't obvious, most people don't know it is possible. And Chat? No way, still. Considering that Alibaba is a bit over 20 years old, I think I can detect their influence in the American online marketplace. Many e-commerce sites have chat and contact features that are not just right up front, sometimes they can be pushy.

Alibaba is now bigger than eBay and Amazon combined. How big will it grow? The Chinese economy has stumbled since the book went to press, but with 1,300 million people, all rapidly climbing the learning curve of capitalist markets, China has the potential to dominate global trade. Jack Ma declares he crafted Alibaba to last 80 years, and later revised that to 102 years, so it would have a presence in three centuries. Long-term thinking is required for long-term results. He is also a creator, less of an overt competitor. He knows you cannot win a race while looking over your shoulder.

The book isn't a how-to manual. If you want to do what Jack Ma did, you have to be Jack Ma. But with most of the world's commerce passing through small (and smallish) businesses at some point or other, lots of folks have come up with a way that works for them, enough of the time, to keep them solvent. Few grow so large. Few need to. Alibaba's World is a glimpse at some of the turns in the road that led to one company that got very big, and not as fast as you might think, but fast enough.