Alibaba.com Helps SMEs Build Trust in Cross-Border Trade with Trade Assurance
Alibaba.com, the leading platform for global wholesale trade owned by Alibaba Group (NYSE:BABA) , today launched Trade Assurance, a free service designed to create trust in trade by giving businesses peace of mind when trading with China. Through the use of data analytics on a supplier’s past performance and Alibaba.com trading history, Trade Assurance provides global buyers with a set of features and protections to help ensure a supplier honors certain details of their contract with the buyer. Trade Assurance is immediately available to all of Alibaba.com’s millions of global buyers that are ready to trading internationally.
According to recent analysis from Frost & Sullivan2, B2B online sales will likely hit 25 trillion USD by 2020, accounting for close to 27 percent of total global manufacturing trade. Buying online from traders across the globe gives businesses access to a wider range of products and more competitive prices, but some businesses, especially small and medium businesses, are often reluctant to trade across borders due to concerns about payment security or product quality.
Alibaba.com’s new Trade Assurance service aims to make trading easier and offers businesses of all sizes peace of mind when buying goods online. The free payment protection service is currently available from participating suppliers in China with plans to roll out the service to global suppliers over the next few years. Alibaba.com will refund up to 100% of the Trade Assurance Amount1 that was agreed between the buyer and supplier on a contracted purchase if the order is not shipped by the date agreed in the contract and/or the products do not meet the quality requirements set out in the contract3.
“Building trust has always been a hurdle to overcome in international trade and Trade Assurance from Alibaba.com is a data-based way to help buyer and supplier build trust. Leveraging what we call ‘big data insights’, we are able to differentiate the experience and competence of suppliers, which allow us to assign them with a Trade Assurance value,” said Wu Min Zhi, Senior Vice President, Alibaba Group. “Even small inventory investments for a small business can have serious repercussions if their order isn’t delivered promptly or doesn’t meet their expectations in terms of quality. We are committed to them and the many other businesses missing out on the benefits of international trading due to trust concerns over product quality or payment security.”
In the first phase of its release, Trade Assurance will cover payments made by telegraphic transfer (T/T) and extend to other payments in future phases. If a buyer makes a deposit or pre-payment, and the supplier does not live up to the shipping time or pre-shipment product quality requirements agreed in the contract, the buyer’s money is protected.
For more information on Trade Assurance, visit http://tradeassurance.alibaba.com/.
The first business of Alibaba Group (NYSE:BABA) , Alibaba.com (www.alibaba.com) is the leading platform for global wholesale trade serving millions of buyers and suppliers around the world. Through Alibaba.com, small businesses can sell their products to companies in other countries. Sellers on Alibaba.com are typically manufacturers and distributors based in China and other manufacturing countries such as India, Pakistan, the United States and Thailand.
1 “Trade Assurance Amount” is the monetary limit that Alibaba affiliate One Touch has agreed to pay the buyer for, and on behalf of, the supplier in the event of the supplier’s breach of the Trade Assurance Services provisions in a Purchase Contract.
2 Frost & Sullivan, April 2015, Future of B2B Online Retailing (http://www.frost.com/ma4e)
3 This feature is optional. Buyers must enable it when they place their order. Quality requirements will be guaranteed pre-shipment and upon receipt of the goods at port of entry.
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