The Alibaba Initiative: Enabling North American SMB Growth Through Global Market Connections – 281
In episode 281 of the AM/PM Podcast, Tim and Anthony discuss:
- 02:30 – A Book That Influenced Tim’s E-commerce Journey
- 04:45 – How Anthony Got Started In Alibaba
- 06:15 – What Is Alibaba?
- 08:00 – Marketplace Vs. Directories
- 12:00 – Finding Value By Expanding Their Presence
- 13:00 – A Huge Opportunity For Manufacturing In North America
- 17:15 – The Catalyst Of Demand For Manufacturing In This Region
- 20:30 – Long Term Value In Finding Other Manufacturers
- 23:00 – Finding A Competitive Sourcing Advantage For Each Region
- 24:30 – Why Is It Difficult To Connect Manufacturers And Sellers Here
- 27:00 – Improving Alibaba To Meet Cultural Differences In Different Regions
- 31:00 – Is Mexico The Next Big Thing In Manufacturing?
- 34:15 – A Big Event In Mexico City About Sourcing In Latin America
- 35:00 – The Challenges In Sourcing In North America
- 36:45 – Enabling The SMB Ecosystem
- 39:00 – Alibaba Is Focused On Creating Connections And Relationships
- 43:00 – Localizing The Alibaba Platform For The American Buyer And Seller
Transcript
Tim Jordan:
When I accidentally found my way into the world of e-commerce. One of the biggest challenges that I had was actually finding something to sell. And I don’t mean discovering a product that had selling opportunity. I literally mean finding the product to sell. Now, I didn’t understand e-commerce and I didn’t understand, I guess the global world of supply, but I found this magical website called Alibaba that literally changed the entire trajectory of my life. We’re gonna talk about that as we talk to one of the leaders of the North American Alibaba, how do we say this initiative, I guess is a good word. It’s gonna be a great episode. Tons of great information. You need to hear, make sure you listen all the way to the end. Here we go. Hi, I’m Tim Jordan, and in every corner of the world, entrepreneurship is growing. So join me as I explore the stories of successes and failures. Listen in as I chat with the risk takers, the adventurous, and the entrepreneurial veterans. We all have a dream of living a life, fulfilling our passions, and we want a business that doesn’t make us punch a time clock, but instead runs around the clock in the AM and the PM. So get motivated, get inspired. You’re listening to the AM/PM Podcast.
Tim Jordan:
Hey, everybody. Welcome to another episode of the AM/PM podcast. I’m your host, Tim Jordan. And today we are talking about a topic that has been actively researched and massively discussed in the e-commerce/small and medium size business world. When we look at basically the life cycle of an e-commerce business or small business, one of the very, very first segments that we have to look at, and that’s massively important is actually finding a product that is well designed well produced. Easy to get your hands on priced. I guess in a way that could be marked up, we’ll say I hate to say cheap, but priced in a way that is affordable to be marked up and actually make some profit on. And that whole process used to be very, very complicated, right? Large companies had massive teams of manufacturers that were being communicated with by sourcing and procurement agents and for small businesses, especially like the ones that I started that would’ve been nearly impossible to do.
Tim Jordan:
I would’ve essentially, if I was gonna sell something here, like in the US had to go through wholesalers that were working directly with manufacturers and input, and it eliminated a lot of my ability to customize products, to get them quickly, and to get them inexpensively. One of the greatest books I’ve ever read, I need to see if it’s up here. One of the most enlightening books, if you’re watching the video, I’ve got the book it’s called Alibaba: The House That Jack Ma Built built by Duncan Clark, it’s the biography of Jack Ma. And it starts off talking about this kid that really didn’t know what he was gonna do in life. And he found a computer somewhere in the Northwest, brought it back to China. It was one of the first computers brought back to China and actually was able to promote a hotel in a city that Bill and Hillary Clinton were coming to. It’s like their first trip to China.
Tim Jordan:
And using the internet was able to massively blow up this business for this hotel. And it sparked this realization in him that this crazy thing in the nineties called the internet was going to allow people on one side of the world to find a service, a supplier, or something on the other side of the world directly without having to go through those sourcing agents, procurement agents. Most of you’re familiar with Alibaba and of course, that’s what I’m talking about. And today in this episode, we’re talking about maybe some pieces or components of Alibaba that you’re not familiar with. And we have with US Anthony Ferreira, who works with Alibaba. And I’m gonna ask him to kind of introduce himself, talk about maybe how he landed in this role, talk about what his role is. And then we’re gonna jump into talking a little bit more about some of my experience in history with Alibaba and also some amazing things that are coming with Alibaba specific to North America. So Anthony, welcome to the show.
Anthony:
Thank you for having me. I’m so excited to be here and, you know, we’ve been recently on a couple initiatives that we’ll probably touch on later, so I’m happy to be part of the podcast.
Tim Jordan:
So how did you land at Alibaba?
Anthony:
So it’s an interesting story. I started my career as one of the founding members at an e-commerce startup called OpenSky that underwent a handful of iterations as many startups do, trying to find our way. We landed on a model that was effectively a B2C marketplace for SMBs to sell to consumers in the United States. So think like Etsy, but for actual brands and not necessarily stuff that was handmade. Throughout that journey, Alibaba actually invested in that company, ended up purchasing that company in OpenSky in which today was one of Alibaba’s biggest acquisitions in the United States in North America. And as a function of that transaction, the OpenSky team effectively became nucleus or the starting team for alibaba.com here in North America which had never existed to that point.
Tim Jordan:
So what is your role specifically with Alibaba here in North America now?
Anthony:
alibaba.com for those listening, it’s a B2B marketplace, right? It’s over 21 years old now, right. Founded in 1999 by Jack Ma. And being that it’s a marketplace, it really serves to function two audiences, right? There’s the supply side which in our case means manufacturers exporters, you know, SMBs and then there’s the demand side, which in our parlance is buyers, SMB buyers.
Tim Jordan:
That’s our audience. It’s the people that are buying products.
Anthony:
Exactly. If you’re listening to this right now, you’re likely on the demand side of the alibaba.com marketplace equation. So I’ve serviced both sides of the equation, working on buyer development, buyer marketing buyer partnerships a few years ago but more recently I’ve stepped into a role leading all of our supply efforts in North America. So helping suppliers, exporters manufacturers, distributors in North America, join alibaba.com to actually sell which a lot of folks don’t realize is, is actually possible today.
Tim Jordan:
The majority of Alibaba’s traffic is probably similar to the way I started with Alibaba. And the way that started was I was actually looking for heavy machinery, caterpillar construction equipment on Google, and I was trying to buy it in the US to ship it to Africa of all things and this crazy site for called Alibaba kept popping up, showing me this caterpillar equipment. And, you know, a very short version of the story is there were people in China that had equipment that had been left there after the Beijing Olympic construction. And it was this American made caterpillar. And I was like, great, there’s all this equipment there. It looks less expensive than I can buy in the US. And using these connections I made in Alibaba, I actually, just got a plane ticket and went to China, a funny story. I didn’t know you needed a visa to go to China.
Tim Jordan:
So I actually landed into China without a visa. And that was a crazy story. But I got into Shanghai and made a lot of connections that literally changed my life. I ended up with business partners, starting businesses based in China, people that I met on that trip. And it was because this marketplace, not marketplace, this directory allowed me to find these different people. So can you explain the difference between a marketplace and a directory and explain exactly what Alibaba is? Cuz a lot of people think that Alibaba is a place that you go to buy products, but that’s not actually the case, is it?
Anthony:
Yeah. That’s part of the equation and maybe the most important part of it, but it’s, it’s definitely more than that. And so you know, as I mentioned, there’s a supply side on the demand side in our DNA and why alibaba.com was founded in 1999 by Jack Ma was the, the concept was to bring Chinese manufacturing and allow the world to access it in a way that they never had before. I mean, I’m sure a lot of the folks listening you’ve been to Canton fair or various trade shows, that’s the kind of historical way of finding a manufacturer or a business.
Tim Jordan:
Yeah. There was a lot of steps trade shows or those procurement agents or the exporters. So this is a way to directly connect the buyer with the seller.
Anthony:
That’s exactly right. Like the whole, the whole idea of the platform was to kind of cut through all that, bring that trade show, concepts online, have it be 24/7, 365 and allow SMB buyers to talk directly to manufacturers and give them a way to actually filter, find, vet them in a way that wouldn’t necessarily cost, you know, thousands of dollars for a plane ticket, an adventure getting a visa in your case you know, trap teasing through the rural you know, China to speak and meet and vet your factories that we thought, Hey, you can bring this concept to the internet and you can cut through all that and create a lot of value, and again, help the world. SMBs actually make the things that they wanna make in a much easier, more efficient way.
Tim Jordan:
So if we, and I say, we myself, the audience is thinking of Alibaba as that, which is this way to connect essentially Chinese manufacturers to buyers throughout the world. We would actually be wrong. That may be how it started, but things have changed a whole lot. So you’ve already talked about the addition to the Alibaba group of alibaba.com, which is essentially north American based. We talked about the acquisition of OpenSky, which was a North American based company that Alibaba invested in and then purchased. And now you have the role of running a team here that essentially does what? So talk to me about your role specifically Alibaba in North America.
Anthony:
Yeah. So as I mentioned, you know, today, my role is, is strictly about enabling and helping North American suppliers sell on alibaba.com. So, you know the platform Alibaba is gigantic millions and millions of buyers. Hundreds of thousands of suppliers, as you’ve mentioned, the majority of them today are based in China, but as of we’ll call it 2019, we’ve started to really launch and invest in supply hubs in other parts of the world, outside of China. The reason we did this is a lot of our research was telling us that, Hey, yes, while China is kind of the manufacturing hub of the planet there’s still a lot of categories kind of business scenarios–,
Tim Jordan:
Yeah, different industries completely.
Anthony:
Industries, trade agreements between countries. So specific trade Laness have different kind of considerations than all others. That says, Hey, actually, our buyers are telling us they want kind of a more diverse supply base so that when they are making that decision on supplier selection, it’s not just China only they can find suppliers in Italy or the United States or Vietnam or Mexico. And then that today is what I focus on is, is building up our supply in North America, alibaba.com.
Tim Jordan:
And this is so valuable because there is nothing like that. You know, I run mastermind groups and I speak at conferences. And like, it’s always talked about like, how do we find suppliers? How do we find suppliers in these different places, whether it be Vietnam or India or North America or Mexico or South? And there’s nothing like Alibaba, right. Or there hasn’t been, I should say. So even finding a supplier in my own city, in North Alabama, I’m literally just poking around Google and hoping something comes up. Right. And it’s very, very difficult. So Alibaba has obviously decided that there is value in expanding their presence, not just recruiting buyers, but also recruiting sellers, fighting these manufacturers in North America. Alibaba is not stupid, right? Like we know that Alibaba is one of those companies that probably does a lot of due diligence and a lot of research before jumping into something, Alibaba must know something that a lot of the world doesn’t know, which is that there’s a huge opportunity for manufacturing in North America. Would that be a correct statement or, or what does Alibaba see as the future, I guess, of manufacturing in a region like this?
Anthony:
Yeah, I think there’s a huge opportunity to digitize kind of B2B trade in the United States and especially manufacturing. You think about a lot of these manufacturers that we deal with today, a lot of them still don’t have a website. They still don’t really have a legitimate e-commerce or strategy. They’re a little bit behind the times in that regard and it’s still a major engine of the US economy. And so to us, that’s a huge opportunity to digitize that, bring that online, and really help and enable the growth of US manufacturing in a way that currently isn’t service today, helping them find buyers and markets, that they may never have been able to access in the past or provide tools to help make the trading across borders, easier, whether it’s financing or supply chain support, that sort of thing.
Anthony:
And so, that’s kind of our, vision in our quest is to really, you know, kind of enable SMB exporters manufacturers to actually get the same advantages that Chinese suppliers have had on alibaba.com for 20 years. And has helped them grow into, you know, multimillion dollar operations from small kind of, you know, entrepreneurial–,
Tim Jordan:
Family shops. Yeah.
Anthony:
Family shops in a garage. And now, you know, we have some suppliers that are multinational conglomerates, but they started \alibaba.com, you know, as a small family enterprise. And, you know, we helped the that’s really kind of all we do and what we pride ourselves on.
Tim Jordan:
So I understand that Alibaba recognizes this need to connect, right? Connecting the manufacturers with the people that are looking for it. But do you see the biggest opportunity being connecting manufacturers that did not have marketing, which you just mentioned? Right. So are you saying that there’s a ton of manufacturers, people just don’t know how to find them, or is it kind of one of those situations where there are many more manufacturers coming online now? Like the demand is actually increasing? So the timing is right? Or is it a combination of both?
Anthony:
It’s definitely a combination of the two. You know, there, isn’t a great kind of centralized directory of US manufacturing capacity, especially when you talk about catering to a global audience. You know, there are some smaller directories here in the US. If you’re in America, you probably can use them and access them. But if you are interested in US supply and you’re in Brazil year in kind of Europe, and today, there really isn’t a great solution. And we’ve always been kind of a global first platform, especially from the demand side, the buyer side, all of our tools are kind of in a million different languages and there’s automatic translation tools and all that kind of fun stuff. And so we wanna bring that value to US businesses and help them kind of within the way that we know best. And so to answer your question, yes, I think there’s an opportunity just to get them the visibility that they didn’t have before. That’s first and foremost, right. And then once that is there, then our plan is to really double down on the services to enable the trade. Once they’ve become visible and it can start attracting buyers.
Tim Jordan:
When we look at this opportunity of sourcing. Now, we’ve said a couple of different things. We’ve said either north America and we’ve said US, but really the focus is on not just the US, but North American in general. Right? So we’re looking at North America being the US, Mexico, which is a hot topic. And then also, probably Canada, you’re trying to onboard maybe a little bit of Central America, too. So why is this important now from the Alibaba perspective? And I’ll give you my opinion. When we look at the hot topics in product based businesses, small and medium size businesses in the supply chain, we look at a lot of changes in the past three years, really, probably. And then as things moved into COVID the supply chain, the boats parked off a long beach that can’t get into the port the lack of containers, the factories in China being shut down for COVID. Like, do you see those as being catalysts for a massively accelerated demand for manufacturing here in North America? Or do you think that it was coming already? Like what do you see as the, I guess the catalyst or the rocket fuel that’s poured on this demand?
Anthony:
I love the analogy to rocket fuel. Cause what you just mentioned, I think is more gasoline to a fire that already existed. So when we think of kind of the overall strategic vision of why we’re doing what we’re doing, the feedback from the buyers on our platform is that you know, labor in Asia is actually is–, the cost of it is going up, right. Which is in general from like a global perspective, great, like generations of people are being pulled outta poverty. But that also means that there is a growing middle class there with higher wages and manufacturing work. There is not as super low cost as it used to be.
Tim Jordan:
And that’s unrelated to COVID, that’s unrelated to tariffs, totally something that was already happening. And I witnessed this you’re a hundred percent, right. I wasn’t thinking about it, but this was happening prior to these short term crises. Right?
Anthony:
Definitely, definitely that this has been just a trend over the last we’ll call it 15, 20 years as Asia really kind of steps forward and kind of the global playing field, so to speak, and like kind of the power that they have. But that, that comes with kind of rise and standard of living and rise in wages. And that will obviously impact kind of your manufacturing cost if that’s where you’re all based. So that’s kinda one element to it is more parity in kind of the labor costs with manufacturing doesn’t necessarily give them that kind of all out advantage that they’ve had in the past. But then you add in things like, like tariffs, which you mentioned, right? Like, you know, there’s a big time tariff benefit of sourcing from Mexico or Canada based on the trade agreements that are in place.
Anthony:
There’s cultural aspects of doing trade in North America versus China. There’s a lot of cultural differences that are, some people can navigate easier than others. There’s language, there’s time zone, there’s shipping speed, right? Like anything sourced from say, Mexico, if you’re in the United States can get to you much, much, much quicker and over roads and rail instead of a two month journey over the Pacific Ocean. And so when you add that all together you start to come up with a pretty compelling case as to why we should actually have more supply choices closer to home and not have it be so concentrated in Asia, which is historically kind of where we’ve been. And so the things you mentioned are just kind of gasoline on that fire. That’s been, I believe building for the last 15, 20 years.
Tim Jordan:
I love that you said it was a fire that was already there, and I couldn’t agree more. And this is important folks that are listening. Listen to this. When we are thinking about where we’re going to source our products, or what products we’re going to sell, do not make the mistake of thinking that potential interest in North American sourcing is just a response to a short term crisis. All right, this isn’t just, oh, let’s react quickly because of COVID or let’s react quickly cuz of tariffs, but that stuff will work itself out. So why should I invest my time building relationships with suppliers that are more regionally, you know, close to me because I’m not gonna need that again in two years if you’re thinking that I think you’re dead wrong, right? There was already reasons to be sourcing more in regions like North America before these accelerators happened.
Tim Jordan:
All right. So don’t shirk past this episode. Don’t shirk pass this idea of sourcing locally. If you’re here thinking that it’s a short term problem to be solved. I think that there are long term reasons and there is long-term value in finding multiple places to source. Now I do wanna step back for just a second and I’m gonna make a statement. You’ll probably agree with me. Anthony, I don’t know, we didn’t talk about this before, but I still firmly believe that the majority of the products in the world will continue to be made in China for a very long time. I’m looking around my office. I’m like 90% of the things in my office are probably made in China. I’m not saying that all the manufacturing and all the sourcing is leaving China and it to be located to India or Mexico. I’m not saying that.
Tim Jordan:
But when I look at the catalog of products that I’ve sold over the past five years, probably half of those items could have been sourced and manufactured a lot of different places. And I wish that I had looked at places like Mexico for a lot of these products that I was sourcing in China. So we’re not saying that you should stop sourcing from China completely. And I’m not saying that any product that you’re sourcing in China right now can be sourced in other places. Like there’s a lot of moving pieces to this, it’s a very complicated equation. But there are a lot of applications, products, and industries that can be sourced from other places. Would you agree with that? Or do you wanna kind of fix maybe an incorrect statement that I made or anything like that, Anthony?
Anthony:
No, I think that’s, that’s really well stated. You know, it is still our core kind of supply base is still in China. That’s not gonna change in the foreseeable future for Alibaba.
Tim Jordan:
Even a lot of raw materials still, like if I’m sourcing a leather product outta Central America, probably the zippers, the buttons, and the snaps are still coming from China to Central America where it’s all added to local leather assembled and then sold in the US.
Anthony:
That’s exactly right. Correct. Its the manufacturing capacity is so broad and so deep. That’s not going away over time. And it still has its place. And it still today, the number one, I think still will be the number one for the foreseeable future, but you’re starting to see some of that diversification to your point. And so the one thing I would add to it is the kind of the category side of things, I think which we haven’t spoken about. And so there are certain categories that our research tells us that the buyer prefer to, you know get their supply from other markets, whether that’s medical devices from the United States, you know, the demand on our platform shows that buyers much prefer to source their medical supplies from American suppliers versus suppliers in another kind of global markets. Right. And that goes the same for, for a few other category is as well. And so for us, it’s about trying to figure out globally, where does each country have a real competitive advantage and then really doubling down on those categories so that we’re offering the world the best, you know, selection of supply in, you know, the markets that they wanna source from. And so that’s a component of this as well, and worth considering when you’re trying to make a sourcing decision.
Tim Jordan:
Absolutely. So by now we have convinced listeners of this episode that there are benefits to sourcing in different regions. So specifically let’s talk North America. So let’s talk about the US, let’s talk about Mexico, places like that. We also know that the manufacturers here want to sell to buyers here, but maybe they’ve struggled. What challenges does Alibaba see affecting the ability for these buyers and sellers to connect? Why has it been so difficult for this, I don’t know, divergence to happen before? Like what, what is the problem?
Anthony:
I don’t know if it’s a problem at as much of is. I think a change of mentality. And from what I mentioned earlier as a kind of a legacy business, I got most manufacturers in the United States were founded, you know, some years ago. And so, it’s a matter of just kind of modernizing the thinking, and what I mean by that is what actually surprises me sometimes when we’ll talk to some manufacturers and you’ll ask them, Hey, like, what’s your kind of growth strategy, you know, for next year, where are you sourcing your clients? And sometimes I’ve actually heard, Hey, you know what, we’re actually good. We’re good with the clients that we have. Right. And like is kind of a, to me a strange kind of, you know a position to take, but more and more like, as we offer resources for folks to be able to kind of where they sit at home using the internet, using marketplace, like alibaba.com to reach buyers everywhere.
Anthony:
It allows them to kind of think about growth in a way that they never had before or in the past. It was, well, do we wanna go to this huge trade show or invest in this, you know, a big initiative. Like, I don’t know if we can do that where Alibaba allows you to kind of do that in a way that’s a little bit easier. You could do it from home. You have your own sales staff can deal with the leads that you get. And it just kind of makes it a bit, a bit easier for folks. So I think it’s more of a, just a change in mentality that we have that we’re up against that we’re, we’re constantly trying to help our, sellers educate that, Hey, there’s possibilities all over the world for you that you may not know exist, like let Alibaba, or let other platforms or other trade Joes kind of help you get there.
Tim Jordan:
Do you think that Alibaba’s core experience, which is connecting global buyers to a primarily and initially sellers in China, do you think that that experience is maybe a little bit of a hindrance in trying to figure out how to make those connections in other places because culturally there’s gonna be some differences? So as Alibaba having to relearn and restructure kind of the game plan for how they facilitate communications with these different regions or has it been fairly easy?
Anthony:
Oh my gosh. That’s like you get peek into my everyday work here at alibaba.com. You know, the truth is a platform is, you know, again, it’s 22 years old and for the first 18 years of the platform’s existence, it served one type of supplier SMB manufacturer in China. Since we started adding suppliers from all over the world in mass, you’re starting to deal with like a lot of cultural differences with how suppliers in Italy or US, or Mexico or Vietnam use a platform in a much different way than the Chinese factory has traditionally used the platform. And so every single day, we’re constantly working with our product engineering team to make changes what we call localize, you know the design of the product, the usability of the product, to make it easier for folks to operate and use it and get value from it that’s every single day.
Anthony:
And sometimes, you know, there’s conflict with, Hey, you know an American supplier wants the platform to work this way, but Chinese suppliers want the platform to work this way. And so that’s kind of the day-to-day challenge that we have to deal with, cuz again, truthfully our goal is to serve all SMBs and we think that’s all SMB manufacturers and exporters. And so we think we can get there, it’s just every day, little by little kind of chipping away and localizing the product for, you know, the markets that they can use it in the way that they want to use it and sell.
Anthony:
Another thing I would add is just kind of the competitive nature of the platform, you know, any marketplace that you join, B2C, B2B, whatever. When you join it’s, it’s a competitive environment, right? Like you have to have the best product listings. You have to have the most product listings in some platforms you have to have the best reputation or seller score, whatever that may be. And so kinda one of the challenges that we’re constantly grappling with is enabling our sellers from outside of China to compete with Chinese sellers that have had a 17 year head start. Right. And so you know, that’s also something that’s to really top of mind for us and something that we spend a lot of time and kind of energy on to help enable them and compete for the, for the, you know, eyeballs of these valuable buyers.
Tim Jordan:
If we’re looking at North America, right. There’s a very big contrast between the US and Mexico. And these are two very hot topics in sourcing. Now you’ve talked about some things that ideally want to be produced in the US. These could be things from pharmaceuticals and supplements to medical devices to very high end athletic apparel, maybe, right? Like specific branding. You’ve already talked about inexpensive labor and how important that is for a lot of industries for manufacturing. Right. And you mentioned that when you were saying that the cost of labor is going up in China, so it’s not always the cheapest place to have something manufactured anymore. So we’re thinking about inexpensive labor and as an asset for some products, and we think about products that we ideally would like to source in the US, but we know is very, very expensive to produce things generally in the US, we have to talk about Mexico, right?
Tim Jordan:
It’s been a hot topic now, Latin America in general, but specifically Mexico, Central America has been something that I’ve had in mind for a number of years. Years ago, I actually had a small sourcing company in Guatemala and we were sourcing products from local artisans and selling them through brands here in the US, and I’ve had my eye on Mexico for a long time. But it’s been really hard to find manufacturers there. Just like you talked about, you know, there’s been this fire burning for a lengthy period of time from guys like me that are trying to find manufacturers, but there aren’t great trade shows that I can just go to. There’s no Canton fair in Mexico. There hasn’t been a place for buyers and sellers to meet online, like Alibaba. Right. And we know that that’s kind of changing, but what does Alibaba see in the value and the future of specifically Mexico? Like, are you pinpointing Mexico as a high priority opportunity for manufacturing and sourcing, and selling in this region?
Anthony:
Yeah, certainly. So again, of all the points we mentioned earlier in terms of time zone and supply chain savings and tariff savings and cultural savings and all of those kind of you know, points that it can be challenging when sourcing from halfway across the world, a lot of those end up being solved in Mexico. And so when you add that on top of a recent administration change in Mexico, which is really starting to make a point of investing in the manufacturing economy in Mexico and enabling more exports, enabling manufacturing growth in Mexico, in the different provinces. I think you see a really, really nice recipe for the growth of Mexican exports manufacturing, and specifically the US-Mexico trade lane, which is one of the biggest in the world to start to, but a lot of it today is dominated by massive corporations. I think what you’ll start to see is entrepreneurs in Mexico, in the US doing kind of what they do best and starting their own businesses and starting to trade with each other you know, in a way that we’ve never seen before. So for that reason, we’re extremely excited about the market and we’re investing very heavily
Tim Jordan:
In it. And the administration change is something that I didn’t know about till recently, but I’m now understanding how important that is. Now for a long time, I don’t know, 20 years or more we’ve had the North American Free Trade Agreement, right. NAFTA, which it very simple terms made it a lot easier for me as someone in America to bring something in from Latin America with little to no duties, tariffs regulations like it was easy to bring it in. However, it didn’t mean that I could actually find it. It didn’t mean that I could have a manufacture. So a combination of two things, I think one, this administration change in Mexico that is enabling the more rapid investment and increase in infrastructure to get manufacturing ramped up there has helped as well as maybe some of these more highly pressured Asian companies and technology and engineers are now starting to invest as well, privately in Mexico and sending experience, and sending education, sending their technology and sending machinery in some cases to Mexico because they see it as a hotspot.
Tim Jordan:
So Mexico is very exciting. Don’t wanna give too much information here, but we’ll tell all of you listeners that there is going to be more capabilities to source for Mexico, not all only the investment and build out of the infrastructure and the connections and the platform that Alibaba is doing, but also in person myself, Norm Farar Amy Wees, as well as partnering with great folks like Alibaba and Anthony here we’re putting on some events this year here in 2022, starting off in Mexico specifically in Mexico city, you can get more information if you would go to themexicotrip.com is a website where you can check out information about an educational series where we’re basically teaching people how to source in Latin America. And we’re doing this in Mexico City. And then the trade show EVOLATAM, E V O L A T A M spelled off of like evolution LATAM or Latin America, which is a trade show being hosted in Mexico City, where Alibaba is gonna be instrumental in helping fund that in Denver essentially, and promote it and sponsor, and also lend their education and data that they have.
Tim Jordan:
And this is a trade show to connect regional manufacturers in Mexico with buyers really all over the world. We have people from the UK, from Australia, from Spain. We actually have interest from people in China to come to this trade show already Anthony, which is interesting. So there you go. If you guys wanna be on the lookout for that, themexicotrip.com and evolatam.com, there’s some stuff. And thank you, Alibaba and Anthony for helping us put that on as we go forward in investing in Mexico. What are some of the challenges that we have with sourcing and finding manufacturers and finding supply chain solutions in Mexico? We talked about why there’s a lot of advantages, but what are some of those potholes, those hurdles, those pitfalls, those challenges.
Anthony:
Yeah, I think when we like survey the market, a lot of what we see again when you think of the trade volume between the US and Mexico is mostly driven by massive corporations who will put their manufacturing hubs in Mexico. And it’s a very kind of highly tightly controlled manufacturing flow. Like you make your cars in Mexico and you ship them over the border and you sell your cars here. But for us, for what we do and kind of for our vision of the of that market from a supply base and to help US small businesses source from Mexico, it’s really investment in SMB contract manufacturing, you know, SMBs in Mexico that can like make what you need. You can get them on the phone. You can–,
Tim Jordan:
They’ll do smaller MOQs. Cuz I know for a long time like Ford motor company could buy transmissions from Mexico, but that doesn’t help me who needs to buy 750 widgets. Right?
Anthony:
Correct. Exactly. And so in, in helping kind of enable like the Mexican SMB manufacturer to understand how big of an opportunity it is for them to start to really, you know, grow in that regard, again, not dissimilar from China, we’ll call it 25 years ago. Like this is kind of like that opportunity now, I believe is there for Mexican SMBs, which, you know, ultimately would benefit, you know, US sources, US B2C companies, e-commerce companies to be able to bring some of that sourcing closer to home. And so for us, it’s really kind of enabling that ecosystem, helping train that ecosystem and nurture it so that it can grow and in the way that we really believe it can.
Tim Jordan:
I love it. I think that when we look at the way the world is changing when it comes to business, the future is small and medium sized businesses. Right? Like even if we look at giant behemoths like Alibaba and Amazon, those businesses are functioning and succeeding because of the small businesses that use them, you know, over 50% of the products sold on Amazon are independent small businesses. Alibaba literally exists because it started connecting small businesses. And when we think about the potential for, I would say the growth of, and the increased utilization of the smaller manufacturing businesses, especially in places like Mexico, it’s very exciting. It’s awesome. More potential products, more capabilities, more I don’t know, abilities to source products that are maybe unique and very specific to what we’re looking for, but also what a great way to support economies. Right?
Tim Jordan:
We know that underdeveloped countries, whether that be in some of the Latin American areas we look at like what’s happening in India, you know, it’s developing and just creating so much wealth. It’s the small businesses that’s doing it. And the ability for small manufacturing business to grow, I think has been very limited in a place like Mexico, because even if they were able to produce their products, they weren’t able to market their products and they weren’t able to connect. So I am just beyond excited at the focus that Alibaba has on creating that connection and creating those relationships, which will enable small businesses that I love to continue to grow and sell, because they will have the ability to connect with the people that they need to. I don’t know if I sum that up. Right. But that’s kind of how I feel about it.
Anthony:
Yeah. I mean, like, I think that the stat that we’ve used in some of our kind of, you know, internal research is that more businesses have been started in the last two years than at any point in the last 30 years, like entrepreneurship in the US is whenever there’s like chaotic moments in US history entrepreneurs generally seem to really shine through and step into that kind of chaos. And we’re seeing that now. And so for us, you know, our entire business, alibaba.com exists to create wealth and empower SMBs, you know, gigantic Megacorp don’t need a marketplace to help source. Like they have sourcing offices in wherever they’re sourcing from it’s our kind of whole existence is to create value on the, you know, the buy side and the sell side for SMBs. And so, you know, wherever their heads are at and wherever we can help them and nurture them and grow them is that’s all we wanna do, honestly. So I think you mentioned it and you, you kind of talked through it really, really well there. And I think we’re, we’re fully aligned. That’s kind of our mission. And I think the future is bright for US entrepreneurs and kind of the audience listening here and especially in North America and Central America, South America, you know, becoming kind into the future of global manufacturing is how we see it.
Tim Jordan:
Well, there you go, folks, you heard it first. Alibaba is not just a place to find Chinese product sellers. Alibaba is a facilitator of small businesses globally, and they are actually putting their money where their mouth is by supporting in, in places like North America to bring on more sellers, more manufacturers, more suppliers, and even in the stuff like what they’re doing to support EVOLATAM and The Mexico Trip. I know that small potatoes compared to the big grand scheme of things in the platform, but it is so cool to see a company like Alibaba focusing on really facilitating more options, right? It’s not just a one way street across the Pacific ocean, sending containers over, you know, Alibaba understands that this world is evolving fast, it’s growing fast and small businesses and manufacturers and sellers globally are going to continue to increase their I don’t know, the necessity to depend on each other while becoming less dependent on one specific region or one specific supplier.
Tim Jordan:
So it’s a pretty cool time to live in my opinion. All right. Anything else, it’s kind of a last wrap up moment. You’re on a stage one stat and thank you all that are listening. I know again, we had over 20,000 downloads, so amazing. Thank you all for supporting the podcast and sharing it. And it’s amazing that many people actually listen to me get on here and talk every week, but I blame it on the amazing guests that we have. So, Anthony, you’ve got 20,000 people listening to this. What would you tell them as a piece of advice we sign off?
Anthony:
Yeah, I would tell them that Alibaba’s not some spooky kind of Chinese company that’s 4,000 miles away. You know, we have a big office here in New York. We have a big office in California, get in touch with us. You know, don’t be a stranger. If you wanna sell on the platform, we can help you. If you wanna buy on the platform, we have services and support and account managers that can help there as well. You know, we’re here, we’re localizing the platform in the business for the American buyer and seller and we’re not going away. We really believe in this market. And so please don’t be a stranger we’re, we’re here to grow with you. So I think that’s it.
Tim Jordan:
We appreciate all of you for listening, especially to the end of the episode. If you found any value on this, make sure to leave a review on whatever podcast platform you’re listening to, whether it’s iTunes or Spotify. If you’re watching us on YouTube, give us a thumbs up and make sure to subscribe to this channel, if you have it ready. And if any of you think that maybe a mastermind that you’re in or a coaching group that you’re in or some other business network, a Facebook group that you’re in would find value in this, make sure to share that with them. It makes it a lot more fun to try to put together really good content when it gets shared around and people listen to it, and then we get responses from that.
Tim Jordan:
So make sure to do that if you feel so behooved to do so. alibaba.com, we don’t need to even give any like shoutouts and call to action, cuz everybody knows what Alibaba is. You can go there and check that out, but start keeping your eye out for more manufacturers being listed on the platform in different regions. You can filter any search results on the left hand side of your screen by the country or the region. Start watching cuz Alibaba is investing heavily and bringing more manufacturers, more places in the world onto that one platform. So it’s gonna be a fun ride. Thank you all for listening. Thank you, Anthony, for being on and we’ll see you all on the episode next week.
Anthony:
Thanks for having me, Tim.
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