Produced by | Bullet Finance

Art Direction | Qianqian

Reviewed by | Songwen

On October 21, the SWIFT International Banking Operations Seminar (Sibos) 2024, known as the 'Olympics' of the financial world, was held at the China National Convention Center in Beijing.

The 'City of Two Olympiads' welcomes the financial Olympics, and the importance of this conference is self-evident.

This is the first time Sibos has been held in a mainland Chinese city in its 44-year history. During the conference, over 10,000 guests from more than 150 countries and regions gathered in Beijing, including heads of central banks, financial regulatory authorities, executives, and experts from various financial institutions and their partners.

Alibaba.com stood out at this conference.

It was the only cross-border e-commerce platform invited to attend.

Why did cross-border e-commerce platforms participate in the Olympics of the financial world? And why was Alibaba.com the only one?

Alibaba.com President Zhang Kuo provided the answer by sharing three stories at the conference. This 25-year-old company has consistently pursued one goal: to make global trade as simple as online shopping.

(Photo / Alibaba.com President Zhang Kuo at the Sibos conference)

It uses digitization to connect Ethiopian merchants who often face visa rejections and travel inconveniences to the world.

With its pioneering B2B online escrow transactions, it helps small and medium-sized enterprises (SMEs) overcome cross-border payment challenges. Today, the number of online transactions on Alibaba.com has quietly surpassed the total number of global transactions processed through letters of credit.

And now, it is leveraging AI to penetrate the core links of foreign trade, truly transforming the landscape of foreign trade.

These are real changes happening in the fields of global trade and cross-border payments, and they are all occurring on Alibaba.com.

1. Ethiopian Merchants Who Often Face Visa Rejections Can Also Sell Globally

Founded in 1999, Alibaba.com was Alibaba Group's first business segment. After 25 years of development, it has grown into a leading global B2B digital trade platform, providing comprehensive trade services to SMEs worldwide.

Public data shows that Alibaba.com covers over 190 countries and regions, serving more than 50 million SMEs globally.

However, many of the countries and regions served by Alibaba.com still face numerous challenges: suspended international flights, visa rejections, and security concerns… It's hard to imagine the difficulties local entrepreneurs face in doing global business when they can't even leave their own country.

The first story Zhang Kuo shared was about Ethiopia.

June 27th is designated as the United Nations Micro, Small, and Medium-sized Enterprises (MSMEs) Day. This year, Ethiopian coffee bean merchant Dagmawit Abebe, representing African female entrepreneurs, was invited by the International Trade Centre (ITC) to speak at the World Trade Organization (WTO) forum. However, due to visa issues, she could only participate online.

(Photo / Ethiopian coffee bean merchant Dagmawit Abebe on Alibaba.com)

Zhang Kuo was present at the UN MSMEs Day event, and Dagmawit Abebe's absence left a deep impression on him. In the past, a simple visa rejection could hinder an entrepreneur's dream of global trade. Platforms like Alibaba.com, therefore, become especially valuable in such situations.

"Not everyone who wants to start a business can afford or easily travel to other countries to meet their clients. Technology enables equal access to trade, allowing these SMEs to realize their dreams of going global and selling globally," said Zhang Kuo.

Data released by the General Administration of Customs in September this year shows that private enterprises accounted for 64.6% of China's total exports. This figure was less than 1% in 1999. In addition to connecting abundant Chinese supplies to the world, more and more overseas sellers are also creating a richer global supply on Alibaba.com.

A similar story is unfolding in Vietnam.

Steven, a young Vietnamese man who inherited his father's fan company, moved his 20-year-old offline traditional business online. He said, "In tropical countries like Vietnam, we can only sell during hot seasons, and sales drop to almost zero during rainy seasons. We need new markets. That's why I started looking into cross-border e-commerce."

Within just two months, Steven received his first order on Alibaba.com, which filled two entire containers. Last year, he earned $300,000 through the platform.

(Photo / Vietnamese merchant Steven's first shipment received on Alibaba.com)

In Zhang Kuo's view, Southeast Asian merchants like Steven can offer more relatable products to Southeast Asian buyers. "They share the same climate and understand better what kind of fans local consumers need. They don't require fancy features. They need a product that can deliver stable performance, withstand voltage fluctuations, and remain comfortable in high humidity environments," he said.

Continuous digital innovation enables any SME to 'buy globally and sell globally' on Alibaba.com.

"Even if they've never met the people they're doing business with in person, the internet can connect them from all over the world," said Zhang Kuo.

2. Online Escrow Transaction Orders Have Exceeded the Total Number of Global Letters of Credit Orders

Apart from travel, another challenge in B2B trade lies in its complexity, which is particularly unfriendly to SMEs.

For instance, letters of credit, commonly used for cross-border payments in global trade, are easier to obtain for large enterprises but more cumbersome for SMEs. However, this classic concept taught in international trade textbooks is quietly being surpassed.

Alibaba.com's online escrow transactions now process over 20 million orders annually, exceeding the total number of global letters of credit orders.

In Zhang Kuo's view, "Cross-border trade involves many complex payment terms, which are established due to a lack of trust, necessitating different rules for different situations."

"As China's largest B2B platform for going global, Alibaba.com has aimed since its inception to simplify cross-border trade through digital innovation, making it as easy as domestic online shopping. Digital cross-border transaction financing services are one of the paths to achieve this," added Zhang Kuo.

Just as Alipay accelerated the transaction process on Taobao, Alibaba.com pioneered B2B escrow transactions for cross-border buyers and sellers, significantly reducing the 'trust cost' of cross-border transactions. Every transaction on Alibaba.com, whether $10 or $1 million, is now covered by credit guarantees.

This year, Alibaba.com has been actively expanding its cross-border financial services, partnering with global payment giant Mastercard to launch the first co-branded B2B e-commerce platform credit card for the US market.

It also covers all three major 'buy now, pay later' brands (Klarna, Afterpay, PayPal) in the European and American markets.

For emerging global trade markets such as Southeast Asia, Latin America, and Africa, Alibaba.com has actively pursued localization strategies for payments, introducing local currencies and payment methods in cooperation with local mainstream wallets and online banking services, allowing buyers to pay easily and conveniently in local currencies.

SMEs are the capillaries of the economy, and their performance is intricately linked to the development of the national economy. To better serve SME buyers and sellers, Alibaba.com has introduced several innovative financial initiatives.

For example, to address the challenge of cross-border returns, it offers free local return services in addition to guaranteed compensation for lost or damaged packages. In the US, local consumers can now return products at any of the 4,500 local return points nearby. It also provides up to one year of official local warranty and production quality compensation for equipment and customized products, respectively.

Notably, Alibaba.com has launched a chargeback protection service for sellers, providing professional defense services and a $12,000 quarterly deductible for credit card chargebacks.

3. Embedding AI into the Core of Production

AI is transforming various industries, and cross-border e-commerce is an ideal application scenario for it.

Over the past 20 years of digitization, SMEs have contributed more than half of global trade, becoming the mainstay of global commerce. AI is poised to further accelerate this process.

However, due to the complexity of foreign trade processes, sellers often have to switch between different AI tools in various stages, jumping between countless websites and apps, without necessarily achieving optimal results. These AI tools vary widely in capability and are mostly not designed for foreign trade, lacking interoperability.

To embrace the AI trend and explore better AI applications for foreign trade, Alibaba.com recently launched the industry's first full-process AI specifically developed for the foreign trade industry. This AI tool, equipped with the most professional and foreign trade-savvy capabilities, integrates all aspects of foreign trade merchants' operations, from store setup and product launches to business opportunity matching and marketing lead generation, and even connects with Alibaba.com's subsequent digital logistics fulfillment and financing services. What was once known as 'comprehensive foreign trade services' has been fully transformed into intelligent services through this upgrade.

From this perspective, Alibaba's AI strategy is very 'down-to-earth,' which is closely related to Alibaba.com's original intention. Unlike the grand narratives of AI startups often backed by hundreds of millions of dollars in funding, Alibaba.com has established an AI application standard from the outset that focuses on solving practical problems rather than showcasing technology.

"Many people are waiting for the 'iPhone moment' of AI, but we're currently in a 'fruit ninja' phase, addressing superficial issues. AI must penetrate into the core of production processes to truly exert its significant impact," said Zhang Kuo. He believes that the complex and challenging landscape of global trade presents an excellent application scenario for AI in foreign trade, and Alibaba.com is already ahead of the game in this field.

For example, at the annual global buyers' conference CoCreate 2024 held in the US in September, Alibaba.com unveiled its new AI Sourcing Agent to global buyers. This AI procurement agent creates a conversational experience, actively translates buyers' procurement needs, provides additional suggestions, and offers advanced features such as intelligent comparison.

(Photo / Overseas buyers trying out Alibaba.com's AI Sourcing Agent at the CoCreate 2024 conference)

Alibaba.com's AI Business Assistant, launched nearly a year ago for domestic sellers, already has 45,000 users. Data shows that AI-optimized products on Alibaba.com can increase overseas exposure by 37% and boost payment conversion rates by 52.5% among overseas buyers.

4. Conclusion

At the financial grand event Sibos, the three stories shared by Alibaba.com President Zhang Kuo demonstrate not only Alibaba.com's commitment to 'buy globally and sell globally,' its digital and financial innovations, and the deep application of AI technology but also its continuous evolution and dedication as a significant player in global trade.

From these stories, it is evident that Alibaba.com empowers SMEs to realize their global trade dreams and leads in addressing cross-border trust issues and promoting trade digitization. These small yet significant strides are testament to Alibaba.com's reshaping of the future of global trade and explain why it is the only cross-border e-commerce platform invited to the prestigious financial event Sibos.

*The lead image in this article is from Shutterstock, based on the VRF agreement.