Due to matters beyond my control, this is going to be the last in the series, for awhile at least.
So I’m going to depart from the issues that I raised in the last few Gabs – after all, expounding on politics is a thankless task – As Emma Goldman so poignantly and pointedly declared all those years ago, “If voting could change anything, it would be made illegal! Oh, wait – in many places they have, and many more wish they could!
OK, let’s discuss a subject near and dear to all of us who do business in Asia – e-trading and, in particular, I am going to refer to those associated with Alibaba. I chose Alibaba as it is the most well known as well as the front runner, the company who singlehandedly turned a day of no particular account into the biggest retail e-commerce day in the world. A huge doff of the chapeau to them, without question.
But we’re now past the introductory stage and, notwithstanding that Alibaba is a public company, there’s “public” and there’s “public”. Jack Ma and company were fast of the draw to announce the daily take of the last Singles’ Day (November 11th) at US$30.8 billion and proclaimed it a “record” and “up 27%”…..all true, so far as we know. However, the rest of the information that would be of great/vital interest to anyone involved, however cursorily, was remarkably absent/unavailable/’unknown’ (sic). In the last year+, Alibaba and its competitors have gone to great effort and expense to draw in those hundreds of millions of people still living in remote areas of China, many of whom are subsisting at or below what even official China acknowledges as poverty levels. That said, these people still have needs and income with which to fulfill same.
So the fact that sales were “up 27%” when well over 20% of potential clients were added to the client base, almost all of whom had never previously participated in this orgy of low prices would lead me to wonder what the average ring (of the sale was), how many clients overall participated, how many items they bought, and what average delivery costs were etc. vs last year’s metrics for the same simple questions. Yes, I acknowledge that there are many other questions but, hey, this is a column, not a Ph.D dissertation
I want to point out that I am not being overly critical of Alibaba per se – I remember the figure last year was that they did as many as 252,000 transactions a second and their computer systems didn’t freeze once – maybe Starbucks and Delta Airlines could learn something. The point that I am making is that companies, particularly in China, all have the observable ability to provide the facts and statistics favorable to their storyline(s) but are seemingly woefully unable (if you want to believe that) to relate the entire story. And the legal and financial systems in place do not compel them to do so.
So you, the reader, should understand that facts are like words and that they mean different things to different people and different things under different systems. Auditing standards in Shanghai, notwithstanding the huge improvements of recent years, are nowhere near those of Hong Kong, New York or London, as those who invested in Sino-Forest or An Bank Insurance or a slew of others can well attest. Doing due diligence on any deal is tedious at best, but failing to check for the absence of leaks and the availability of lifejackets on the boat before embarking and setting sail is inexcusable, especially when so many have foundered and even more are observably foundering.
Best of luck.
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