How Alibaba is using AI to 'empower' small businesses

The World Trade Organization is currently hosting its 40th Geneva Week in Switzerland, with an emphasis on small and medium enterprises (SMEs). Alibaba.com (BABA) president Kuo Zhang joins Wealth! to discuss his company's initiatives to support these enterprises globally.

Zhang highlights Alibaba's commitment to serving SMEs, catering to sellers and buyers. The platform has a network of over 200,000 suppliers and more than 50 million buyers worldwide. He emphasizes Alibaba's role in providing tools and platforms "to transform the way they do business."

Recognizing SMEs as "the backbones of the global business," Zhang outlines Alibaba's strategy to leverage digital tools "to empower" these enterprises across the globe, including developing regions in Africa and Asia. Zhang reveals that Alibaba is "heavily investing on the technology side" of AI with two primary objectives: enhancing platform efficiency for both sellers and buyers, and evolving the platform from "a sourcing engine to a creative engine." These advancements aim to streamline workflows for SMEs and "build trust between each other" on Alibaba.com.

Addressing concerns about the impact of global elections on their business operations, Zhang emphasizes Alibaba's focus on "things that do not change." This includes their core SME customer base, products, target markets, and manufacturers. "We are back to the fundamentals," Zhang told Yahoo Finance, adding, "These are things we think are not going to change for a hundred years, so that's where we are focusing."

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Angel Smith

Editor's note this post has been updated to correct Mr. Zhang's title and reflect that Alibaba's platform has more than 50 million buyers worldwide.

Video transcript

The World Trade Organization, the WTO as you know them in your hood kicked off its 40th Geneva week on Tuesday.

It's a twice annual week long event where business leaders and executives travel to Geneva Switzerland to weigh in on recent developments in international trade.

Now, one point of interest this year is the potential of micro, small and medium size enterprises also known as M SME S. Now M SME S, they currently account for 90% of businesses, more than 70% of employment and 50% of GDP worldwide and more experts believe that they are the backbone of many global economies.

Joining me now live from the conference for this Yahoo Finance exclusive is quote Zhang, who is the president of alibaba.com quote.

Great to have you here.

And thanks for stepping away for a hot second from the discussions taking place to hop on with Yahoo Finance.

What are international business leaders pledging to do to protect small business growth from the conversations that you're having?

Sure.

So hello from uh this, this quote from alibaba.com and now I'm in Geneva and uh actually, you know, kind of a discussion with uh WTO S with T CS about our kind of ongoing program to help uh to either help or incubate or empower Sme S. So our business uh I talk a little bit about alibaba.com.

We are founded in 1999 by Jack Ma actually in day one, we are focusing on working or serving for SME si mean SME S for the both sides, both the sellers and the buyers.

Actually.

Now we are serving more than 200,000 of suppliers all over the world and we are serving more than let's say 50 million of the SME S as buyers all over the world.

So, so in a simple word is that we are using all the digital tools to transform the way they do business and help them to lower the barriers to kind of entry the global platform.

What do you believe that the health of small businesses is worldwide based on the interactions that you're seeing with alibaba.com, right?

So I can, I can give you an example first that when Alibaba founded in 1999 at that time, I see the numbers, you said that the 50% of the GDP kind of global trade GDP contributed by SME S. But at that, at that time, in China, actually that number is less than 2% back in 1999.

So now actually that the number in China is more than 62% of the kind of global trade GDP is contributed by the SME S. You can see in the last 20 or 25 years, the SME S actually they are have more and more power in the global state and now they are the backbones of the global business.

And that the similar things that happens all over the world, both in Europe, in us, the developing countries as well as in developing countries like uh such as Asia, like Latin America, like Africa.

So we are using our digital tools to empower them there.

What is the ability for SME S and, and and micro and small and mid size enterprises to make the digital transformation like some large enterprises and multi billion dollar conglomerates are making as they're spending heavily on everything from Blockchain to generative A I seemingly to make sure that they're staying ahead of the curve technologically.

Yeah, sure.

So what we are doing actually take A I example.

So what we are doing is democratize A I.

So we are heavily investing on the other technology side and we want to using the technology to empower the sme.

So especially for this year, we are focusing on two things.

One is A I to using A I, we can improve the efficiency for both buyers and sellers and also transform our platform from a kind of sourcing engine to a creative engine.

And the other is to kind of upgrade our supply chains, which is called Alibaba Guarantee.

The meaning that when the buyer buy a product or source a product from alibaba.com.

We will take care of all the logistics of the extra payment financing services as well as after sales services.

So that's greatly kind of lower the barrier and help the small sme S to build the trust between each other.

So this is basically what we are doing.

Quote.

I I wonder especially considering the environment for elections this year with more than half of the world going to be participating in elections of some sort or another that could change, what globalization looks like that could impact companies like alibaba.com as well.

How are you positioning yourself to navigate what the outcome of some of these elections could be knowing that it also impacts your core customers, both consumers or end consumers of products but also other small businesses and mid size enterprises.

See.

So um from our perspective, actually, you know, alibaba.com is uh funded for more than 25 years.

So there's a lot of uh elections, a lot of change um during this kind of uh time period period.

And what the latest change or the challenge is the pandemic.

Actually, after the pandemic, we see that actually more and more SME s now it's a power time for them to change, to embrace the digital.

And you're talking about the elections actually, what we are focusing on is the things that does not change.

So take the SME is a bi example if you are an Andrene and you want to build something, build your own brand and sell.

There are a bunch of things that you need to focus in on what product I'm going to build, who are the customers, what are the targeting market and how we can find a kind of best partner to manufacture it and with the best price quality and what kind of employees I'm going to hire.

And in the end, probably there's a tax and the tax tariff is a part of the tax.

So they need to consider a lot of things, but we are back to the fundamentals is the demand of supplies, how to provide all the buyers with a variety of supplies, high quality, with a competitive price and delivering time.

And the, we just keep, keep kind of doing on that and perfecting the tools and make sure that we can empower SME S and to make it easy to do business anywhere.

So these are the things we think is, is not going to change for 100 years.

So, and that is what we're focusing if, if there were more tariffs that were ratcheted up, would that have a net impact on your business?

So, uh first of all, we are kind of uh a platform which supports global supplies and the supplies, not only from one country actually, now we have supplies from uh 200 different countries and for example, in Eu in Europe, so there are kind of wines, there are fashions, there are machineries and there are also a lot of other tools from Germany, from France, from Italy.

And we have lots of uh suppliers from Southeast Asia as well.

So that this number one, the second part is that as I mentioned, the fundamental rule for global trade is uh demand and supplies.

So always find the better supplies with better kind of price and adding together is a kind of uh competitive uh strength for the supplier side.

What we are doing is just lower the barrier and letting them easy to kind of uh go to the global to uh do business with each other.

So that is uh basically what what they are doing and that is what we are focusing to do.

Quo Zhang alibaba.com president quote.

Thank you so much for taking the time here with us today.

I really do appreciate it.

Thank you.