Trade Websites 2….Alibaba’s Problems

by Julian Righetti on September 12,2012 in Factory Review , Trade Websites ,

So, I think everyone knows Alibaba is a necessary evil. Alibaba’s problems can’t be listed easily here. Most people hate Alibaba. When I do research on suppliers, I usually consult Alibaba to see if I should avoid some factories. It’s essentially the phone book and while they have tried to bolster their “reliability”-it’s a joke-their reputation is terrible. Moreover, the user experience, interface, and overall feel of the website is typical of Chinese designs-small font, too much clutter, and confusing layout.

To that end, I have played around with developing a basic trade website that uses reviews as a basic mechanism for vetting sellers. Some of my friends in Shenzhen have also talked about open source “black lists”…..

Why hasn’t Alibaba developed this? The market really wants this….

I think Alibaba has avoided this because it would impact their sales. What factory would sign up for Alibaba if most buyers were giving them 0 out of 10 scores. But in a ways, I think Alibaba continues to enable fraud by not adopting a more rigorous screening process and helping buyers tell the difference between Nanjing Machinery and Chongqing Machinery.

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Sources uses a 5-star rating system, but I think this is worthless as well. I want to see an extensive review system

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that includes a variety of metrics like professionalism,product quality, communication, attention to packaging…etc.

I think this idea is important for China and international trade for two reasons:

1. There are good and honest Chinese suppliers who deserve to move ahead on an even playing field. Their reputation is tarnished by fraudsters on Alibaba just as much as Alibaba’s reputation.

2. The whole industry of due diligence and inspections on Chinese factories (and it has really grown into a large industry) will come crashing down and thus reduce costs for importers and consumers. If Japan and South Korea can ship quality products that adhere to contract specifications, why can’t Chinese suppliers? They can and will IMO.

Thus, we come to Panjiva.com. I really like the website, the layout. They are charging a lot of money and I don’t know how many entrepreneurs would really spend that money. Also, Trademango.com provides part of Panjiva’s services for free….. I also don’t know if entrepreneurs or small business people would really find this useful.

Alibaba’s problems are apparent to most traders and I can’t imagine Chinese factories are happy with their services.

Regardless, there are a lot of cool ideas coming up…..and Alibaba’s problems aren’t going away anytime soon.

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