China’s Alibaba All Set To Enter Pakistan

Alibaba is all set to enter Pakistan. On Tuesday, the country signed a Memorandum of Understanding (MoU) with the world’s largest e-commerce company with the aim of boosting exports from small and medium enterprises (SMEs).

China, Pakistan, Alibaba, CPEC

By Charliepug (Own work) [CC BY-SA 4.0], via Wikimedia Commons

How the agreement helps Pakistan

The agreement was signed during Prime Minister Nawaz Sharif’s visit to Alibaba’s headquarters in China between the Trade Development Authority of Pakistan (TDAP) and Alibaba Group Holdings Limited. On behalf of the Chinese company, the agreement was signed by Alibaba Group President Michael Evans and Ant Financial Senior Vice-President of Global Business Douglas Feagin. Alibaba Executive Chairman Jack Ma was also present during the signing of the agreement, notes the Tribune.

Under the terms of the agreement, the parties involved — Ant Financial, Alibaba and TDAP – will work together to push worldwide exports of products by SMEs. The Chinese company will also offer online and offline training programs to help SMEs operate on Alibaba’s platforms. In exchange, TDAP will select suitable SMEs to participate in training programs based on the industry analysis framework provided by the e-commerce giant, notes the Tribune.

Apart from promoting exports, TDAP, Ant and Alibaba will also help promote financial services in areas like mobile and online payment services in the country. In addition, the parties involved will support SMEs’ online and mobile e-commerce efforts in Pakistan by adopting cloud computing services, notes the Tribune.

“The initiative will help create more opportunities for people working in the e-commerce sector and generate more jobs in the country,” said Prime Minister Nawaz Sharif.

Further, the PM said he believes in economic development as a way to politically empower people, adding he will continue to push e-commerce in the country to expand the reach of small businesses.

Alibaba sees massive e-commerce potential in country

Sharif acknowledged Ma’s contribution in the e-commerce space and appreciated his opening of an e-commerce platform in Pakistan.

“My appreciation of Ma’s dynamism and performance of [the Alibaba] group comes not only from its success as a e-commerce giant but more so from the focus of the group on job creation and livelihood generation,” the PM said.

Meanwhile, Ma said there is massive potential for e-commerce in emerging markets. Further, he said that e-commerce is a promising tool for small businesses, adding that more and more businesses are embracing e-commerce platforms as part of their business systems. Ma said that they were monitoring the growth of Pakistan’s e-commerce sector.

“E-commerce has been established for developing countries and for SMEs. Pakistan has seen significant progress in recent years and we look forward to working together with TDAP to further enhance the potential of their SMEs through the signing of this MoU,” Ma said.

Ma stated that they are supporting 60 million companies worldwide and that over 300,000 consumers from Pakistan have agreed to use the company’s services for transactions, notes The News. Further, Ma said that a focus on youth in the country will help them get more productive for the national economy. Youth account for two-thirds of Pakistan’s population.

Strengthening bond between China and Pakistan

Over the past few years, the Chinese company has been encouraging foreign brands to join Tmall stores to offer their products to China’s massive and rising middle class. According to Ma, close collaboration between China and Pakistan could turn the “iron brothers into golden brothers.”

The two countries are already working on CPEC (the China-Pakistan Economic Corridor). It is a road, rail and infrastructure link that connects China’s remote northwestern Xinjiang province with Pakistan’s Gwadar Port on the Arabian Sea. Pushing forward with the construction of CPEC, the two countries recently announced plans to jointly develop a 1,600-kilometer railway linking southern and northern Pakistan.

“China and Pakistan have signed memorandums of understanding to increase the speed of the railway connecting Karachi and Peshawar, as well as upgrade its signal system and railway stations,” said Pakistan’s special envoy on CPEC, Zafaruddin Mahmood, in an interview with The News.

Recently, there were some questions raised about China’s intentions with regards to CPEC. Pakistan’s English-language news daily DAWN published comprehensive details of the project, tagging it as a land grab plan which may compromise the country’s sovereignty.

“The plan envisages a deep and broad-based penetration of most sectors of Pakistan’s economy as well as its society by Chinese enterprises and culture,” says DAWN.




About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com