Alibaba — Is China Really Still the Top Supplier to Global Buyers?

When you see headlines like this coming from sources like you have to question not just whether they're right, but the motives of the sources behind them. So whether or not it's true that Alibaba's latest "quick poll of top global buyers from Fortune 500 companies affirms that China remains the world's top supplier despite rising production costs" is almost irrelevant. Look at the source. Alibaba has pulled one of the best fast ones in history on any supplier community in existence. I know from talking with various suppliers and procurement staff in China that Alibaba essentially promised suppliers that their site was the go-to resource for anyone looking for suppliers in the region.

To hear Alibaba market themselves to suppliers, you'd think their website had replaced Microsoft Word, Excel and PowerPoint as the most used application in existence. But as we all know, Alibaba is about as useful as the Yellow Pages in researching supplier details -- in China and beyond. Western buyers quickly smartened up to the fact that the listings and much of the review / commentary were pay-to-play. In fact, despite its market cap, Alibaba is a great metaphor for the state of global sourcing today and many of the lies and mistruths that both buyers and suppliers got themselves into when trying it out in the first place.

I personally believe that global (and China) sourcing is here to stay. But the second wave will look very different from what we've seen to date -- as well the applications and supplier information sources. Alibaba must change with the times -- suppliers and buyers are too smart to get sold a false bill of goods (or a fake ISO certification) another time. What should Alibaba 2.0 look like? If it features true community-based ranking and feedback of suppliers, provides detailed information into supply -- and buyer -- risk in place of non-existent credit ratings in China and offers a means to truly vet whether a suppliers credentials, ownership structure, labor practices, etc. are accurate, then, and only then, will the site live up to the true global sourcing hub concept that it promised to paying suppliers in the first place.

Jason Busch

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