Jack Ma, founder of Alibaba, stands out in a country where tycoons are often the children of politicians. He failed twice to get into college, learned his English from the radio and stumbled on the internet during a trip to America as an interpreter. He typed the phrase “Chinese beer” into a search engine and found no results, wherein, he saw an opportunity.

57 million users
Mr. Ma created Alibaba.com in 1999 to help and assist small firms find customers and suppliers without going through middlemen. Now Alibaba has 57 millon users worldwide and is sometimes likened to eBay or an online Yellow Pages. Although the business is performing pretty well, Mr. Ma is far from satisfied.

Clients in Alibaba are small firms that want to link cheaply to the global market. Machine-makers in Turkey or Britain use Alibaba to find cheap suppliers without physically going to China. Also buyers can read reviews that others have written about each seller, which foster trust, though it is far from foolproof.

… a payment system
To boost traffic through in Alibaba website, Mr. Ma set up an online payment system, ‘Alipay’, in 2004. Its growth was greatly helped by the impediments that China placed, until recently, before its American rival, PayPal. Alipay says it now has 470 million users worldwide and about 500,000 Chinese merchants accept it.

… and ‘Ali-loan’
Mr. Ma has also started a service called ‘Ali-loan’. He does not lend money but works with banks which typically have no idea if a small borrower is creditworthy. However, some in government probably think it’s a good idea to help small businesses and even consumers get loans, but others are cautious. The Communist Party is terrified of credit bubbles, the bursting of which might spark unrest. So Mr. Ma must tread carefully.

Challenges
The Economist, however, enumerates several obstacles that Alibaba is facing. First, the Chinese internet market is cut-throat and evolving fast. Second, talent is in short supply. And third, Alibaba has neglected to make much profit.

and more opportunities …
But then again, Alibaba has compiled huge database in which the firm could profit what it knows without violating anyone’s privacy. One idea might be is to use customer data to identify trends and help companies to anticipate what consumers want. Given the paucity of accurate data in China, this would be extremely valuable.

Read the full report on The Economist