Anthony Hilton: Alibaba opens a treasure trove of global trade

Variations on this script have been acted out in hundreds of small firms over the past few decades, and is one reason our export performance disappoints. But it may be that, thanks to technology, life is about to get simpler for these would-be exporters because of an initiative by Alibaba, the Chinese tech company, a corporate behemoth which is most commonly referred to as that country’s equivalent of Amazon, but which is really very much more.

Alibaba does many things — as befits a company with a market capitalisation of almost $500 billion — and has the modest ambition to double the number people who use its retail market 500 million to a billion in the next five years. For today’s purposes one way it hopes to achieve this is by rolling out internet platforms which will give the world’s small companies, including those in Britain, direct access to Chinese consumers.

Alibaba accumulates vast amounts of data every day because virtually every Chinese household uses it. This gives it a unique knowledge of what its customers are looking for and, crucially, what products are popular but hard to find. Armed with this data Alibaba can then go looking abroad for companies which no one in China will ever have heard of but which have the products which could meet Chinese needs.

Thus, it might — indeed, it has already done so — approach Tangle Teezer a UK maker of hairbrushes and separately, the Cambridge Satchel Company as well as better-known names such as Whittard the tea and coffee retailer and Holland & Barrett. What it then does is offer guidance to these UK firms on how they could supply the Chinese market and what sort of service and delivery customers there would expect.

The data Alibaba can supply dramatically reduces the uncertainty around what will sell and the risk to the supplier in trying to get into the market. Then if both parties agree, it offers the suppliers access to its technology platforms, so its Chinese customers can find them in a search, place an order online and expect it to be fulfilled.

There are different platforms for firms depending on their stage of development and their willingness to make a commitment. Thus there are more sophisticated services for better-known retail names such as Burberry, Topshop, Next, Ted Baker and Mothercare which they use to create brand awareness and generate business in the Chinese market.

In addition there is Alibaba.com — a platform which gives access the other way round and is used by British businesses looking for Chinese suppliers. There is also a cross-border payment platform Alipay which you might find in Harrods or Selfridges.

There is also a logistics platform which helps UK firms to understand what Chinese customers expect when it comes to speed of delivery, and this has partnered with, among others, Royal Mail and Metapack.

All this puts the UK’s flirtation with fintech into perspective. What is being done in Britain is good, innovative and challenging. But it is dwarfed by what is already happening in China, the apps which are being developed, the platforms which exist, the level of integration of the digital and real economies, and their global ambition.

The sheer scale of what is happening is hard to comprehend. Entire logistics and payments platforms are being built in developing countries which will end their reliance on primitive infrastructure. Soon they too will be opened up and plugged into the world via Chinese technology platforms and networks. The ability of a British firm to find and supply customers anywhere in the world is becoming easier every day thanks to Chinese technology.

Alibaba’s founder Jack Ma had a vision when he started the business almost 20 years ago of using technology to connect all the world’s consumers and producers so that Earth could become one marketplace with order fulfilment and payment being both intuitive and easy.

He is getting very close to delivering on it. It is hard to underestimate the power and knowledge that will result.