Ebay “believed they were smarter than Chinese local people”, Jack Ma (below) once said. The founder of Alibaba, which operates the world's largest internet marketplace for trade among companies, never tires of lecturing that western companies such as Ebay and Yahoo failed to thrive in China because they tried simply to transplant business models from their home markets.
Now Alibaba has set out to master the same challenge. The company, which began in 1999 as a Yellow Pages-style service for Chinese would-be exporters, has grown into a sophisticated site offering dozens of services, such as helping small enterprises gain working capital bank loans. It now has more than 45m registered users, 6m virtual storefronts and 580,000 paying members, most of them Chinese companies offering everything from machines to nail polish for export.
Alibaba has now launched an aggressive push to sign up foreign customers . In November 2008, as the world descended into financial crisis, it drastically cut fees. Extra services were offered to those paying for Gold Supplier membership. In addition, it launched a starter pack for less than half the normal price.