Alibaba Exec stresses the importance of small businesses to the U.S. economy

John Caplan, Alibaba.com President of North America and Europe joins Yahoo Finance’s On The Move panel to break down the Alibaba’s growth and share how the company practicing business in the U.S during the coronavirus pandemic.

Video Transcript

JULIE HYMAN: You're watching "On the Move" on Yahoo Finance. I'm Julie Hyman. We've talked a lot about e-commerce companies that have done well, on a relative basis, during this pandemic. Alibaba.com is no exception. It focuses in North America and the US on business-to-business transactions. Those have risen about 120% amidst this pandemic.

And we're joined now by John Caplan. He is the president of North America an Europe of Alibaba.com. We're also joined by our own Julia La Roche. John, I actually-- I want to get to those [? big ?] numbers, but while I have you here [INAUDIBLE] I have to ask you what it's like being a Chinese company right how that is trying to grow its business in the US, as we see tensions rise. Are you seeing any impediments from a policy perspective or business perspective that are being thrown at Alibaba?

JOHN CAPLAN: So it's great to be here with you today. What's remarkable about Alibaba-- and frankly, the Alibaba group-- is our mission. Our mission is to make it easy for businesses everywhere to do business anywhere. And here in the United States, small businesses represent 46% of the US GDP and 62% of new jobs, so there's nothing more important to the US economy than helping US small businesses thrive.

And that's whether that's a small business in Wisconsin, or in North Carolina, or out in Michigan. Small businesses need to get digital and go global, and Alibaba.com is all about helping make that easy for them to do that.

JULIA LA ROCHE: Hey, John. It's Julia La Roche here.

JOHN CAPLAN: Hi, Julia.

JULIA LA ROCHE: How are you all helping small businesses, especially in this environment, realize that, what are you doing to get them onboard?

JOHN CAPLAN: So we have a remarkable team, and so when COVID just started, we had a program called B2B Tuesday, where every Tuesday, we would share content and information resources to help small businesses get digital. And when COVID started, the team pivoted instantly, and now it's B2B Today. And what we're sharing is content, and resources, and information, and webinars every day-- often multiple times a day.

Whether it's a lawyer sharing insights on how to apply for the PPP loan or a inspirational pivot story of a small business that was a traditional distributor that quickly went digital, B2B Today is all about helping US small businesses either export more effectively and faster, or source raw materials and the supplies they need to operate. And so we're really focused on providing the resources and information to make it easy for folks to do that. That is the essence of the Alibaba.com platform.

ADAM SHAPIRO: John, it's Adam Shapiro. Thank you for joining us. It's not a pleasant question or topic, what Julie was alluding to, but have you seen, because of the escalating potential for cold war with China, a drop-off among these smaller businesses and a reluctance to do business with Alibaba because they are not a US company?

JOHN CAPLAN: We are a pretty data-driven organization, and Alibaba-- as the earlier host shared, in March and April, our business was up over 100% year over year in transactions involving US businesses and over 76% up year over year with US business buyers. Alibaba.com is active in 190 countries, with people sourcing and selling around the world, small businesses helping one another.

And as someone who-- frankly, I'm talking to you from home, but someone who used to travel a lot, I can tell you, a small business owner in Vietnam, or in Italy, or in Detroit all wants the same thing. It wants more customers. It wants more margin. They want simple and easy-to-use tools. And Alibaba provides all that for the folks who are active on our platform.

JULIA LA ROCHE: John, the last time you and I spoke was in January, and you were getting a read on just the sentiment of small businesses. I can imagine that's probably changed. And I understand you don't have updated data at this point, but just from an anecdotal perspective what are you hearing from the small and medium-sized business community right now? What are the challenges? We know the obvious ones, but maybe what are the ones that we're not immediately aware of?

JOHN CAPLAN: So US sellers are the fastest growing segment on the Alibaba platform globally right now, and I think what we're seeing underlying that is that it used to be that getting digital was potentially a nice to have, an if. That's what that data that you and I talked about in January shared, which was that the majority of us small businesses were still using a fax machine to do business.

They weren't yet really fully transacting digitally. And now I think that is-- we've seen 20 years of change in two months, and that is just off the table. Folks need to get digital to sell their products around the world, to source around the world, and that is, I think, underlying the change. That's number one.

I think the second would be the categories. We are seeing 10 to 20 times growth in medical equipment, in PPE supplies, but we're also seeing an interesting other pivot. With more people working from home-- frankly, just like I am-- and doing business on their laptops, the categories that are growing are outdoor furniture of 47%, yoga wear up over 100%, educational toys up just about 50%.

So I think the distributors of America recognize, and are the grittiest, most innovative, the best. Those distributors are hustling to meet the surging demand for a changed economy, and I think that's why Alibaba.com's so essential to them.

JULIE HYMAN: John, I'm curious about your ecosystem with Amazon third-party sellers. Do you folks have an idea of how many of the folks-- the businesses, the small business-- are people who then turn around and sell this stuff on Amazon?

JOHN CAPLAN: It's a great question. Alibaba.com is the critical resource for the world's e-commerce sellers to use to source goods, to customize goods. Someone may invent the perfect iPhone case. They go to Alibaba.com, they find the manufacturer who can make it for them just so, and then frequently, they will distribute it on Amazon, or Walmart.com, or multiple other platforms that are B2C platforms. Our platform's a B2B platform, where businesses trade with one another globally, but then Amazon, which is a B2C platform-- folks will then distribute their goods there or to-- in retail or lots of other places.

JULIE HYMAN: All right, John, thanks for your time-- appreciate it. John Caplan is president of North America B2B at Alibaba.com. Good to get some time with you-- appreciate it.

JOHN CAPLAN: Great to be here. Thank you.