Jack Ma: eCommerce Is Changing the Way We Do Business

quite interesting a dynamic group of leaders here to talk about enabling ecommerce and in particular part of the context for this important session is enabling ecommerce initiative which the World Trade Organization ewt P and the forum's international trade and investment system initiative which engages a wide spectrum of companies governments and experts are undertaking for the next year or two to try to enable the kinds of changes in both policy and private sector practices that can make trade more inclusive through e-commerce what what there is something of a debate these days about whether ecommerce is going to be a vehicle for development or whether it's primarily going to benefit large and advanced economies and companies and what I'd like to do is first introduce the panel and then get right into that discussion first we're privileged to have therese fernandez ruiz who's president and founding partner of rags-to-riches from the philippines someone engaged in e-commerce domestically and internationally then your excellency Mercedes ah Rose Prime Minister of Peru Jack Ma executive chairman of Alibaba Holding Group Limited and Roberto Acevedo director-general of the World Trade Organization why don't we start with you a view from the actual conduct of business on the ground Therese how do you tell us a little bit about your story and the extent to which you see the commerce providing opportunity and indeed some obstacles that you think could be worked on to make this a bigger opportunity for your customers and clients absolutely so we started 10 years ago in one of the biggest urban poor communities in the Philippines where there were artisans mostly stay-at-home mothers who would weave rugs out of fabric and they only earned about 20 cents u.s. dollars a day and anywhere in the world that's nothing and we thought that it was because of the middlemen they couldn't get straight to the market and they couldn't also get access to the supply so we started rags to riches or r2r as a fashion and design house empowering these community artisans to link them to the global market so imagine from the slums in the Philippines suddenly their products are in vogue or in the global stage but there are so many barriers for sure logistics the usual barriers logistics payments imagine if all of these barriers are not there anymore because right now we're making things work our artisans are having a regular livelihood but imagine the kind of impact that we could do if these barriers are not there anymore thank you very much Prime Minister we have seen a few global attitude survey that suggests that 81 percent of Peruvians see trade as benefiting the economy what opportunities do you think ecommerce holds for building on that in your country well I think that when we started the process of trade liberalization in the country people were like oh no we don't want this but suddenly especially says SMEs were the ones that say no we have a chance to start exporting our neighboring countries at the beginning then with the other countries with what we started doing this FTAs particularly US and Europe and Asia in which were working very closely why because this is the an interesting step to formalization to the process of coming back and having opportunities to have better markets so still we have to do a lot of work we have to reduce the the logistic cost which is a which are great still we have a very bad index at 59 percent below there our partners so we have to work on that a lot but for example with sad intrusion in the postal office the service for SMEs for small is exports a very low tip were a very low price very cheap and also with all the facilities also we have in the trade agreements that we sign all the facilities for couriers so they can come in and help our small firms and in APEC for example we're moving ahead pushing all the trade facilitation program because we think that trade facilitation can help SMEs in netting America we have an interesting case I was promoted but I DVM mr. Dartmouth which is connect America which also helps the Latin American companies small firms to get together through the this platform which is promoted by IDB and Google and Jack Ma and in that way also these films can get opportunities of credit which is important also for the trade facilitation process okay thanks Jack mom there you know there's still quite a significant digital divide out there nearly four billion people not yet connected and so that leads whenever there's a discussion among policymakers and others about e-commerce leads to a question mark as to whether the expansion of e-commerce may primarily benefit the advanced countries and the countries that are less developed in this regard what's your thinking and your experience in that regard yeah my belief is ecommerce is the future and e-commerce is going to replace a lot of traditional way of doing business people say in the past 20 years with poor logistic terrible payment terrible connection of the internet in the world the Stute ecommerce grow like this for our platform alone in China in the past 15 years people say our knowledge is the no credit system no financing know this and know that even that last year ourselves on our platform it's more than 750 billion US dollars GMB cells it's almost ranking number 21 country's GDP only 20 years imagine without a perfect logistic system without a perfect payment system without blockage in technology they grow like this one if the next to 20 years where all the technologies are ready when all the government and organizations and entrepreneurs are ready they think this is a lifestyle this is the way young people live and it's going to be the future so ecommerce is not for big company ecommerce is not for the developer the country's ecommerce is for developing countries for young people and small business because in the past days young people don't have chance to compete small business they don't have chance to compete with the big companies and developing countries don't have chance to imagine that country like China can can grow like this I think a Palo a few years ago I went there that day I remember I went to ask where people were demonstration right I was happened to be there people hated the e-commerce and southerner there's a young the Palou young man said I using Internet and I sold my pollute products to New Zealand Australia which I never thought in my life could do it with the Internet so it will be the future because young people love it anything young people love it it has the future that's my point okay thanks Roberto Acevedo you just came out last month of a important ministerial meeting in Buenos Aires and there was a lot of discussion maybe some of the most discussion about any topic as far as I could tell was about e-commerce tell us a little bit about how the multilateral community views this issue well I think I agree entirely what one has been said about the potential of e-commerce I think this potential as far as cross-border e-commerce is concerned business-to-consumer there is a lot of potential to be realized it's still in the very early stages it we are crawling this is we're still a baby there's a lot to be done so and I think that this potential of cross-border e-commerce needs the feedback of the international community and it's not going to be governments alone governments are known are not going to do it they need the feedback from the people on the ground it they need people like Jack Ma big company big platform and rags-to-riches and others participating together because they are the ones who understand the problems they are the ones who see the challenges they are the ones who see where the bottlenecks are governments don't government still have rules and regulations that apply to the twentieth century trade that's gone that's going to disappear so we have to have the means to have this conversation and that's why in Buenos Aires I was very excited to launch this initiative with ewt P and with the web which will bring together not only governments but also the private sector academia everybody sitting together to figure out the way forward if we cross our arms ecommerce is going to be the exclusivity of the big companies of the big guys because they're the ones who can go through this myriad of bureaucracy and tons of papers that you have to fill in hi trade costs if you want to make it inclusive and that's where governments and communities win we need to make it simpler we need to make it more expedited that is the conversation that we have to have without it it's going in the wrong direction let me broaden the the frame of the discussion for a moment you know here during this week in Davos one of the top issues for debate is where trade policy is going are we going to seek additional restrictive measures are we seeing potentially more rivalry among trading bloc's and Jack you have family famously said I think read once that when trade stops war begins how do you see the evolution of this debate and what role do you think the e-commerce industry can play in helping matters yeah I think it is impossible to stop the tree the world needs trade trade is supposed to way to solve wars if the trade stops the worlds does this is always I believe trade have to have to be changed and WTO has done great job in the past of years in order to making sure the world understand each other in order to making sure the trade is an opportunity for everybody but I think today the world has changed because of the new technology I was able to say in the future there will be no made in China no made in America no made in pallu it's going to be mating on the internet a young people connecting each other online in the future no matter you like or don't like we will enable every young people every small business to to buy global cell globally and deliver globally and pay globally and travel Google global it just to maybe with a mobile phone even without a with a passport this is the trend nobody can stop it so protectionism and globalization I think globalization is a grating you should not have killed the baby before even the baby was born today globalization is a growing pain and there were there it's so easy to launch a trade war but it's so difficult to stop the disaster of this war and I'm scared and I concerned I don't think the world should have the you know don't use trade as a weapon use a trade as the solution to solve the problems when you're sucking the other country it is you're sucking those small yeah small business young people they were killed just like you bombing somewhere civil civilization years ago so we believe we should using the internet using e-commerce encourage young people the more trade we have the more business will come up there are hundreds of ways to solve the problem but there is only one reason the one if you want to launch a trade of war it's easy but I would say it takes about 30 years to fix that pain so my view is we should not have a trade war and we have a plant of ways to solve the problem and third we should not let the world global trade controlled by 60,000 big companies we should make in technology policies to encouraging six million or sixteen million or sixty million business then can get benefit from small business from small business like entrepreneurs from Philippine they can sell globally they can buy globally this is the future and it works so you know much of the response to debate about rising restrictions is that we need to make our economies more inclusive and I guess I would open it up to the panelists to talk a little bit about how they think this aspect of Commerce Ian's abled Commerce and investment can help make the economy more inclusive make trade more progressive or inclusive anyone care to comment Yes Prime Minister I would say from the point of view of a government first open markets I totally agree just yesterday the TPP was agreed without us but there are other 11 countries already agreed to have free trade among themselves with trade facilitation with investment facilitation and and helping each other so that's very important so some countries may think that reducing trade is good for them but for us many of us are we are very happy to have trade and copper and most of us are in the Pacific area so we believe that we can increase the possibilities of our enemies second I think we have to make easy for our films to have digital knowledge so we have to build capacities we have to provide services through internet so for example in our country we have Peru that got like our main instrument to connect with SMEs so they can have easy registration paying taxes access to platforms of credit facilitating the payment processors and reduce the cost all the administrative project procedures should be reduced and then we can help them to be there and of course give information on what are other countries which we tre have as information that they will need to get into the other country so I think we the government has to help our enterprises to be promoted otherwise it will be this market taking but the big and large e-commerce retailers and we don't want that we want them to be moving as you said with other small firms altogether so this is something that we can have user-friendly and keeping people in touch with each other and the government should be the tre facilitator in this case so in the perspective of a social entrepreneur I represent hundreds even thousands of artisans who are in poverty and when you are marginalised and when you're vulnerable it comes with a lot of burden it comes with a lot of gaps so the technology definitely is a gap Logistics absolutely infrastructure Internet service definitely but also one of the biggest things that we realize is education so when we were starting just as an exam we ask our artisans to source for animal print lining for our products because we're in fashion now so we have to think fashion forward so they sourced animal print lining and they came back to us with Winnie the Pooh spider-man and we were very shocked but at the same time we realized that even if we speak the same language we don't necessarily understand each other and now the technology is really fast there are lots of people who could get left behind so I believe that we have to empower the entrepreneurs so that they can be the bridge and the connectors to communities who are in poverty because ecommerce has the potential to link them to the market definitely but also to lift them out of poverty we have such a big opportunity in our hands now so we need to empower those who can make those connections director-general we've just heard a list very practical constraints as I understand Oteri's you you sell 90% of your activity domestically 10% export and presumably part of the reason for that ratio is that you are encountering a number of very practical constraints we know in the multilateral framework in the WTO we don't yet have specific obligations and rules in detail in this area and even 20% of regional trade agreements don't have a full-fledged set of cooperative frameworks and rules in this area can you reflect a little bit about how you see our initiative as an opportunity to move the ball forward while the formal negotiating process kind of catches up to what's happening on the ground in the market yep I have to say this conversation is already happening in the WTO to some extent one big element of this conversation is the digital divide we still we know that about 4 billion people still don't have access to the Internet small developing countries don't have the infrastructure they don't have sometimes even electricity so it's difficult to bring them on board I can only imagine the kind of logistical difficulties that exist in the Philippines with so many islands and artisans in different places so this is a big challenge and I think you cannot think of e-commerce without thinking of how to integrate the small the poor countries into this equation as well so it's not something that you do only domestically you have to think it globally so another important thing that in the WTO we're trying to figure out is which are the main challenges which are the ones that we have to address first because when you begin a conversation about e-commerce it very quickly covers 1,000 different aspects it's difficult to attribute priorities and say let's let's take this first step let's do this first and just now in Buenos Aires we had more than 70 countries signing up a declaration that they will discuss the issue of e-commerce they will try to set up a conversation that could lead in the future to negotiations I think this initiative of enabling ecommerce by the web the WTO and and and EWP will allow us to frame the conversation that is going to happen because otherwise people are going to sit around the table and they won't know what to do because there will be so many things to handle that they will get lost in the forest so we need to figure out the priorities the challenges and that can only come if you talk to the private sector if you talk to the operators the people who face the challenges otherwise we're going to be lost and that's what I hope this initiative will deliver Jack you know you're you have a rapidly mushrooming business and indeed by 2020 it's been estimated that e-commerce will want to be a trillion dollars or more value yet you're spending time in doing what the Roberto just talked about which is to be part of a process to get very concrete discussions between private sector not just your firm but many other firms and governments to try to improve the enabling environment there tell me why you want to allocate your precious time to that type of endeavor yeah thank you I think this is what this initiative about this is we are very excited about partner with WEF and WTO to promote the ewt peacock electronic world trade platform or electronic world tourism platform we think tourism because of the cross border of tourism is going to bring a lot of business opportunity for small business but let me think this it's very important for private sectors and public sectors to have a dialogue to discuss I respect a Acevedo's idea positive thinking today a lot of regulators worry too much oh my god you got a security you don't have enough this enough that you know you worried this worried that when you worry it comes you don't worry it comes right you like it it come if you don't like it it comes many years ago 17 years ago when I study commerce in China because they hate China even don't have a PC so why do you have any commerce well then we'd never nobody expect China suddenly have become a country with so many mobile phones which is easier to build a roads or build a mobile system buuuut mobile system is much easier than build up the roads and infrastructures I remember 1994 in the winter night in Beijing a group of experts of IT and Internet expert I was confused 1994 there's internet experts gathered together think about how to regulate Internet I was in that meeting and then after like two hours debating they have a lot of worries so 20 years passed all the things those people worried never come up all the things they don't worry about all come up let me tell you one thing that calm Commerce is changing the way we do business as I said the traditional business is B to see in the future is it to be consumer to business most of the things are tailor made in the past all the traditional cross ball the business is goals through containers in the future most of the business work goes through packages so the rules and laws we have a huge change today from China to Russia even through is there's one minim package from China to Russia and without even consider how many package from Russia to China but even 1 million packages from China to Russia per day think about it for years 5 years ago we launched a campaign only 80,000 packages from China Russia the whole Russian post of the system crashed today one minute no problem government is learning people are learning ancient producer learning when there is a demand there's a way so I think government should not think about how to regulate the way government think about regulate is the way they think about 30 years ago when I talked a lot of government offices the first thing they think about is hmm how can i regulate I hope next the city years the first thing to think about how can I help what shall we change to making sure our young people our small business our trade can in and out smoothly this is the positive thinking so I sat in Argentina whether you like it do it do it you don't like it we will do it right because this thing is coming and the hope of making this thing good is work with young people work with the smart government offices organizations let's push let's talk anything coming up don't worry there is a way if you are not smart there are smart people there this is my belief so that's the spirit bottled in one piece of what this initiative is about it's you know there are a series of practical obstacles as you have described the payments e-signatures consumer protection customs logistics and whatnot these are not solely the province of regulation I think is your point and so the process that you've just articulated so well is a very practical solution in one and I'm happy to say a Prime Minister that there early discussions between the initiative and the Pacific Alliance and the inter-american Development Bank of potentially supporting such a very practical process in the region and I just want a signal appreciation and give you an opportunity to talk about how you see the Pacific Alliance moving forward in this regard Pacific Alliance which is growing now because now we are not only for up right now we're gonna be eight very soon because Canada Australia Singapore and New Zealand probably will be joining the Pacific Alliance is another way to address the issue with cooperation and learning across each other because it's very interesting the processes each country can bring given their own experiences so this is an interesting way to address the issue in as you mentioned young people are the ones who are creating the new things you know I can remember my daughter teases for her graduation as a business professional was trading art to Internet and she prepare a special application where you can trade art for young people which is so hard to get in the galleries and there it's expensive you know so these young people are creating things and I'm sure young people across all these countries can create this development because these young people are the Millennials are the ones who I'm pushing ahead our trade in just a couple of years Peru growth in terms of e-commerce when grew like almost 300% in couple of years and we think this process will be still growing 30 percent each year min as a minimum so it's because these young people are moving in that direction we are improving broadband and we have to work all together in creating these spaces of growth among ourselves thank you we've reached the end of our time will you join me in thanking with appreciation the great panels we've had here today audience I wish everyone a good remainder of the day

Channel: World Economic Forum

Views: 30,675

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Keywords: Jack Ma, Alibaba, China, Chinese, ecommerce, Davos 2018, Davos, WEF, World Economic Forum, WEF2018, politics, finance, economy, news, leadership, democracy, education, 4IR, technology, tech, AI, automation, work, future, webcast

Id: lJCGMr9pCWQ

Length: 29min 44sec (1784 seconds)

Published: Wed Jan 24 2018