Is it they lack ideas or is it just that import export trade is not suitable for low profit margin bulk merchandise business?

None of the two devoted any of their resources in building an independent and importer-friendly user each engine. Payment gateways and dispute resolution mechanism are the outstanding issues they haven’t bothered to address.

Way back when in 1998 Dot.com bubble had started building up, a host of technology enthusiasts had set up trade boards, newsletters, classified sites and trade portals without having any inkling of how the export import trade operated.

As an hands-on exporter, it was clear to me that Internet could not on its own generate low-margin bulk B2B export import transactions without human intervention.

Major issues then were cost-related: driving traffic, collecting payments, freighting, customs clearing, quality control and inspection, and above all the usual mistrust factor arising from any long distance relationship.

None of the host of search engines was powerful to drive enough money-paying traffic even to the B2C ecommerce sites . Traffic was being driven by traditional advertising ways.

Trade journals were reluctant to go online and were struggling to find justification for web development.

Major among them was Asian Sources (now Global Sources) the pioneer and leader in disseminating information on Asian merchandise trade.

Coming from a traditional brick and mortar enterprise culture, they took their own time to figure out what direction to take.

Instead of understanding the web capabilities and building the whole online business from scratch, Global Sources converted their print products into verticals without bringing in online culture. It was more or less forced on them.

Alibaba and a host of online trade information providers took birth at a time when China’s small and medium enterprises were growing and groping in the dark on how to market their products.

Outside China, a new generation of importers – largely consisting of small and medium enterprises – was at the same time looking for cost-effective ways to get into business.

Luck was on the side of Alibaba and a host of clones of Asian Sources (now Global Sources). There was no credible monetization model nor there was any need for it. Dot.com boom fed them with enough money to grow and go into all sorts of directions.

Smaller Chinese enterprises lacked direction because business came to them on a platter. Attracted by China’s low labour costs and aggressive pricing, it was importers who went looking for them. Until 1994, it was sort of a secret that was known mostly to Hong Kong and Taiwan exporters who were the major beneficiaries.

The deflation cycle started somewhere in 1993 and consumer goods became cheaper and cheaper every week forcing big importers to go out of business by 1998. Unable to understand how to manage inventory levels in the face of weekly price declines, and still make a decent profit, a large number of them chose to shutter their warehouses.

The setup was perfect: a new generation of importers – largely arising out of the ranks of small wholesalers and retailers – was looking for buying goods directly.

Small assembling factories of China were willing to accept smaller quantity orders. Doors were opening for smallest of the buyers to become an independent importer. Thanks to WTO regime, Customs clearance had become easier and cheaper. Logistics was no more restricted to serving big boys. Courier and small parcel services had become a substantial part of freight business. A good number of cost-effective inspection agencies were in place.

And the missing link between the sellers and the buyers was provided by Alibaba’s communication services and merchandising tools – all for free.

Alibaba and later the growth of China’s wholesale markets hastened the entry of small traders in importing directly from China.

Alibaba happened to be there when it was most needed. Yes Alibaba has been lucky for all including its early financiers who got a decent exit finally.