Last week, Class 2 of Alibaba’s Global Leadership Academy (AGLA) visited the world’s largest wholesale market located in Yiwu (义乌), Zhejiang province, a mere two hours bus ride from Alibaba HQ in Hangzhou. It not only turned out to be a trip to one of the most impressive wholesale cities in the world, where its over 75,000 merchants last year sold around 70% of the world’s Christmas decorations, but also a trip back in history to a time when Alibaba’s journey just began 18 years ago: as a platform for Chinese producers and wholesalers to export into the world through Alibaba.com.
Yiwu today represents one of only few cities in China that have become a center for B-2-B business, supplying the full range of products manufactured in China. Just Yiwu alone, a city of approaching 2mn people, managed to generate a turnover in Gross Merchandise Value (GMV) last year of an estimated 177bn RMB. With this turnover, Yiwu managed to take the fourth place in cross-border commerce only behind Shenzhen, Shanghai and Guangzhou – and thereby drawing a significant community of foreign traders to Yiwu. The variety of products to be found in Yiwu’s massive market halls is endless…
Any product produced in China can be found in Yiwu’s market places…
Alibaba is still present with whom we call the “Iron Soldiers” of the very beginning of Alibaba.com. Those brave and enduring colleagues walking the streets of Yiwu and the corridors of its never-ending market places scouting for merchants among the sheer endless number of sellers to be part of Alibaba’s online ecosystem to offer their goods to China and the world on our platforms Alibaba.com, 1688.com, Taobao or AliExpress to China and the world. This belief did not only form the mission of Alibaba at its very beginning but also remains part of our core vision today: to make it easy to do business anywhere. For one day, AGLA was privileged to accompany our fellow colleagues in Yiwu and learn a lesson in strong will and endurance while scouting for new merchants.
Starting the day with our work buddies for the day – full of motivation
However, today Yiwu developed into more than just a physical place for the exchange of goods. As commerce in China has been transformed and brought online over the past decade – with Alibaba’s eco system at the forefront of that transition – Yiwu has adapted as well. More and more merchants of those 1mn people engaged in e-commerce in Yiwu sell online. So-called “Taobao villages” (Alibaba’s online B-2-C market place inside of China) have emerged in which almost everyone does business on Taobao, 1688, Alibaba.com or AliExpress. Strolling through such a village and visiting some of our clients, we saw and felt a community all geared up to do business online.
Exploring one of Yiwu’s “Taobao villages”
The emergence of Taobao Villages, of which Alibaba identified around one thousand across China in an internal study, is not only enabled through online platforms like those provided by Alibaba, but also by a strong entrepreneurial spirit in those places. To nurture this entrepreneurial spirit and teach the relating skillset, Prof Jia Shaohua, Headmaster and Founder of the Yiwu Industrial and Commercial College is one of the pioneers, offering young students to start their own businesses. In close cooperation with Alibaba, Prof Jia teaches at the College that is focused on hands-on entrepreneurship and enabling students that normally would not be able to get into one of China’s most prestigious universities due to the high entrance exam standards, to become their own boss. In a conversation with Prof Jia, the AGLA group learned about how the currently 8000 students are being taught to open their own stores from day one and how many of them have become some of the most successful e-commerce entrepreneurs in China today. Finally, we also had the chance to meet Yu Feng, who, once an Alibaba employee, went on to open its own e-commerce company, Yiwu Qetesh Trade Co., in Yiwu and today shares his insights and success story not only with AGLA but young students and entrepreneurs across China.
Meetings with Prof Jia and Yu Feng
Today, Yiwu represents a melting pot, starring Chinese merchants and international business people, in transition. While historically the business model has been focused on the local exchange of goods, Yiwu has – along the development of Alibaba’s services and products – adapted to the apparent trends to conducting business online. Whereas the halls of Yiwu’s massive markets might have been more lively back in 1999 when Alibaba.com started its mission to bring those merchants online, today Yiwu, Taobao villages and its merchants inhabit the full range of Alibaba’s eco system and have successfully adopted to the trends of today and the future. It was a great privilege for the AGLA group to go to Yiwu and be as close to our customers as we can and learn about their lives, businesses and perspectives and bring those experiences back to HQ and make it the basis for our work on the solutions for our customers of the future.
Jan Philipp Poeter is a member of AGLA Class #2. Jan, originally from Germany, loves exploring the world and has lived and worked in many places, including China, the U.S., the UK, El Salvador, Austria and Belgium. Holding Masters degrees from Peking University and LSE, Jan has worked in Banking in London before joining Alibaba in 2017 and is excited to get into the world of E-Commerce.