Think China for Small Business Growth

China’s middle class is expanding fast, offering an opportunity for U.S. small business sellers to boost sales by expanding into a new market.

During a recent small business forum in Chicago hosted by Ken Chenault, CEO of American Express, Jack Ma, founder and executive chairman of Chinese ecommerce giant Alibaba, made his case for taking a look at the Far East. While small businesses have largely sat on the sidelines as globalization opened up new markets for big corporations, technology is now leveling the ecommerce playing field, he said. 

“Today, because of the Internet, cross-border trading for small business is so easy,” said Ma. “The World Trade Organization (WTO) was set up for big companies,” he said before proposing an Alibaba-backed alternative for small businesses “using the cheapest in logistics systems [and] payment systems.” His international trading model also encompasses easy access to suppliers and buyers.

“Anybody—if you have ideas—you can sell things abroad,” said Ma.

And there’s a good reason to consider selling abroad, to China at least. Imports are growing in the populous nation that staked its economy on being the world’s exporter.

China’s Rising Middle Class

“We can help the American small business sell things to China,” Ma said, referencing his own company’s international ecommerce platform.

Alibaba Group: small business global ecommerce

Beyond the relative ease of expanding into the Chinese market using, the math makes sense. Today in China, “the middle class has already more than 300 million [people]. It’s almost the same size as the American population.” According to U.S. Census Bureau estimates, the U.S. population currently hovers at slightly more than 321 million people.

Within the next ten years, the Chinese middle class will balloon to roughly 500 million people, he added. Small business entrepreneurs and innovators will want to start planning now.

The Chinese middle class “needs good products [and] good services,” asserted Ma. “I think Americans have the good products, good services. Chinese people love American products,” he encouraged.

Noting that big brands have already established a strong presence in China and benefit from the fervor for American products—Apple’s booming iPhone 6 sales in the country are a recent example – Ma said it’s time for U.S. small businesses to start making their mark.

Customers First for Small Business Success

Setting up shop in China isn’t the only reason behind Jack Ma’s success. Estimated to be worth more than $22 billion according to Forbes, he approaches business from a customer-first perspective.

In terms of competing globally, “focus on creating value for your customers,” Ma advised. “Focus on customers rather than competitors,” and don’t expect an overnight success. It may take a while for a U.S. small business to find its footing in China, but the potential payoff is huge.

Since he founded Alibaba in his apartment 16 years ago, “we never changed our focus,” he said. “Good business always takes a long time.”

American Express is 165 years old, he noted, and Alibaba has existed for a small fraction of that time. Admitting that calamity may strike his company at any time, he plans to avert a business-killing downturn and achieve the longevity of American Express by never losing sight of his principles.

Ma also advocates learning from the mistakes of others, not success stories. “If you know why people fail, and you learn [from it], you make progress.” And don’t wait for the storm clouds to gather before changing course.

“My philosophy is, repair the roof while [there] is still sunshine,” said Ma. When the company is doing well, “change the company” and pursue other opportunities. “When the company is in trouble, be careful, don’t move,” buckle down and wait for the bad times to pass.

Pedro Hernandez is a contributing editor at Small Business Computing. Follow him on Twitter @ecoINSITE.

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