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Alibaba uses data analytics to link SMEs with trusted Chinese suppliers

3 min read

20 May 2015

Former editor

In an effort to make dealing with suppliers in China less risky, ecommerce platform Alibaba has created a new service to “create trust in trade” and boost growing company’s ability to engage with new suppliers.

Citing figures from Frost & Sullivan predicting that business-to-business online sales will reach $25tn by 2020, Alibaba’s Trade Assurance platform will pull in the past performance of a supplier to make sure firms are confident suppliers will honour details of a contract.

Cross-border trade can often be stymied by concerns about payment security or product placement, Alibaba said, despite Frost & Sullivan’s figures suggesting sales in the space will account for 27 per cent of total global manufacturing trade by 2020.

Alibaba’s Trade Assurance means a buyer’s deposit or pre-payment is protected up to 100 percent, with a refund due if goods aren’t shipped on time or the quality is not up to expectations.

Wu Min Zhi, senior vice president at Alibaba Group, commented: ““Building trust has always been a hurdle to overcome in international trade and Trade Assurance from Alibaba.com is a data-based way to help buyer and supplier build trust. Leveraging what we call ‘big data insights’, we are able to differentiate the experience and competence of suppliers, which allow us to assign them with a Trade Assurance value.

“Even small inventory investments for a small business can have serious repercussions if their order isn’t delivered promptly or doesn’t meet their expectations in terms of quality. We are committed to them and the many other businesses missing out on the benefits of international trading due to trust concerns over product quality or payment security.”

Read more about Alibaba:

Having listed on the NY Stock Exchange (NYSE) in September though the biggest initial public offering (IPO) in history, Alibaba has recently signed partnerships with both ezbob and iwoca to supply trade finance when goods are purchased and Bigcommerce to help merchants grow online businesses.

According to a statement, in the first phase of its release, Trade Assurance will cover payments made by telegraphic transfer, with extension to other payments in the future. If a buyer makes a deposit or pre-payment, and the supplier does not live up to the shipping time or pre-shipment product quality requirements agreed in the contract, the buyer’s money is protected.