China’s eCommerce golden child, Alibaba, has made major moves in recent months to strengthen the position of the nation’s small suppliers. Last March, the company struck a partnership with two U.K. alternative lenders to boost funding for U.K. buyers wanting to do business with Chinese suppliers. Just days later, the firm revealed a deal with Lending Club to strengthen B2B buyers’ access to credit while they procure goods through Alibaba.
The company’s latest venture, revealed Wednesday (May 20), sees Alibaba working to build the confidence of international buyers that want to purchase goods through Alibaba and from Chinese suppliers.
In an announcement, Alibaba announced the launch of Trade Assurance, a service that uses Big Data to assess an existing supplier’s past performance as a way to measure risk or potential buyers. The service, which is offered for free, also provides foreign buyers with various features of protection that ensure a supplier honors any deal made over Alibaba.
According to a statement from the firm, Trade Assurance is a reaction to the explosion in online B2B eCommerce, which is estimated to reach new heights within the decade. But SMEs especially can be reluctant of doing international procurement as it is more difficult to assess product quality or guarantee payment.
“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,” Senior Vice President of Alibaba Group Wu Min Zhi said in a statement, adding that with the use of so-called “Big Data insights,” Alibaba can assign suppliers a Trade Assurance Value based on their commerce history.
Alibaba’s Trade Assurance is immediately available to all global buyers and to all Chinese suppliers working with the platform. Participating suppliers can also provide free payment protection in which Alibaba will refund 100 percent of the Trade Assurance Amount as agreed upon by the parties. The company said it plans to roll out the service for suppliers across the globe within the next few days.