Go Lean…Caribbean

Go Lean Commentary

The Chinese company Alibaba Group is another model for the Caribbean Postal Union (CPU): our logistics solution for delivering the mail … and modern commerce – 21st Century trade – to the Caribbean region.

The US Postal Service (USPS) is not the model for the Caribbean. The book Go Lean…Caribbean describes the USPS as a failing enterprise (Page 99). Alibaba, on the other hand, just went public on the New York Stock Exchange (NYSE), raising $25 Billion in the first week.

Alibaba Group Holding Limited is a publicly traded Hangzhou-based group of Internet-based e-commerce businesses, including business-to-business online web portals, online retail and payment services, a shopping search engine and data-centric cloud computing services. The group began in 1999 when Jack Ma founded the website Alibaba.com, a business-to-business portal to connect Chinese manufacturers with overseas buyers. In 2012, two of Alibaba’s portals handled 1.1 trillion yuan ($170 Billion) in sales.^[13] The company primarily operates in the People’s Republic of China (PRC), and at closing time, on the date of its historic initial public offering (IPO), 19 September 2014, Alibaba’s market value was measured as US$231 Billion.^[14]. Analysts says that performance marketing will play a key role in meeting the financial markets’ expectations of such market valuation ^[15]

In September 2013, the company sought an IPO in the United States after a deal could not be reached with Hong Kong regulators.^[16] Planning occurred over 12 months before the company’s market debut in September 2014. The NYSE Alibaba ticker symbol is “BABA.N”, while the pricing of the IPO initially raised US$21.8 billion,^[17][14] which later increased to US$25 billion, making it the largest IPO in history.^[18] However, buyers weren’t purchasing actual shares in the group, since China forbids foreign ownership, but rather just shares in a Cayman Islands shell corporation.^[19]

Alibaba’s consumer-to-consumer portal Taobao Marketplace, similar to US-based eBay.com, features nearly a billion products and is one of the 20 most-visited websites globally. The Group’s websites accounted for over 60% of the parcels delivered in China by March 2013,^[13] and 80% of the nation’s online sales by September 2014.^[14] Alipay, an online payment escrow service, accounts for roughly half of all online payment transactions within China.^[20]

Alipay.com is a third-party online payment platform with no transaction fees.^[1] It was launched in China in 2004 by Alibaba Group and its founder Jack Ma. According to analyst research report, Alipay has the biggest market share in China with 300 million users and control of just under half of China’s online payment market in February 2014. According to Credit Suisse, the total value of online transactions in China grew from an insignificant size in 2008 to around RMB 4 trillion (US$660 billion) in 2012.^[2]

Alipay provides an escrow service, in which consumers can verify whether they are happy with goods they have bought before releasing money to the seller. This service was offered for what the company says are China’s weak consumer protection laws, which have reduced consumer confidence in C2C (Consumer-to-Consumer) and even B2C (Business-to-Consumer) quality control.

The company says Alipay operates with more than 65 financial institutions including Visa and MasterCard^[3] to provide payment services for Taobao and Tmall as well as more than 460,000 Chinese businesses. Internationally, more than 300 worldwide merchants use Alipay to sell directly to consumers in China. It currently supports transactions in 12 foreign currencies.

The payment methods are MasterCard, Visa, Boleto Bancário, Transferência Bancária, Maestro, WebMoney, and QIWI Кошелек as of May 2014.^[4]

The PBOC (People’s Bank of China), China’s central bank, issued licensing regulations in June 2010 for third-party payment providers. It also issued separate guidelines for foreign-funded payment institutions. Because of this, Alipay, which accounts for half of China’s non-bank online payment market, was restructured as a domestic company controlled by Alibaba CEO Jack Ma in order to facilitate the regulatory approval for the license.^[5] The 2010 transfer of Alipay’s ownership was controversial, with media reports in 2011 that Yahoo! and Softbank (Alibaba Group’s controlling shareholders) were not informed of the sale for nominal value. Chinese business publications Century Weekly criticised Ma, who stated that Alibaba Group’s board of directors was aware of the transaction.^[6] The incident was criticized in foreign and Chinese media as harming foreign trust in making Chinese investments.^[7] The ownership dispute was resolved by Alibaba Group, Yahoo!, and Softbank in July 2011.^[8]

In 2013 Alipay launched a financial product platform called Yu’ebao.^[9] As of June 2013 the company still had what it called “a minor paperwork problem” with the China Securities Regulatory Commission, but the company said that they planned to expand the product while these are sorted out.^[10]
Wikipedia Online Encyclopedia – Retrieved October 2, 2014
http://en.wikipedia.org/wiki/Alipay

Source References:

1. Zhe, Sun (Jan 2012). “From Stall to Mall”. News China.
2. John Watling (14 February 2014). “China’s Internet Giants Lead in Online Finance”. The Financialist. Credit Suisse. Retrieved 15 February 2014.
3. “About Alipay”. Alipay. Retrieved 10 October 2013.
4. https://alipay.alibaba.com/checkout.htm (free registration required)
5. Wang, Shanshan (27 May 2011). “Alipay Awarded Third-Party Payment License”. Caixin Online.
6. “How Jack Ma’s Mistake Damaged China’s Market”. Caixin Online. 14 June 2011.
7. “Jack Ma Talks To China Entrepreneur Magazine About The Alipay Case (UPDATED)”. DigiCha. 6 July 2011. Retrieved 10 October 2013.
8. Rusli, Evelyn M. (29 July 2011). “Yahoo and Alibaba Resolve Dispute Over Alipay”. DealBook.
9. Chohan, Usman W. “Financial Innovation in China: Alibaba’s Leftover Treasure – 余额宝”. McGillUniversity. Retrieved 14 May 2014.
10. Hsu, Alex (27 June 2013). “Alipay’s Issue with CSRC Only a Paperwork Problem; Alipay Will Continue to Expand Yu E Bao”. BrightWire News.

Alibaba’s 2013 revenues amounted to USD 7.5 billion^[11] with 22,000 employees (March 2014).^[12] This Alibaba model relates to the Caribbean in so many ways, including the fact that it is a Cayman Islands incorporated business entity.

If the CPU can duplicate some of Alibaba’s success, that would be a win-win. The focus of the CPU is not just postal mail, but rather logistics. Alibaba does so much more than just sell Chinese manufactured goods online, it facilitates a complete eco-system for Small-Medium-Enterprises (SME’s) to thrive: finding customers for their wares and collecting payments. (The end result is the generation of $170 billion in commerce). We need that functionality in the Caribbean. Alibaba is therefore a good model, not just for the CPU but the entire Caribbean Union Trade Federation (CU). The book Go Lean…Caribbean, serves as a roadmap for the introduction and implementation of the technocratic CU.

Alibaba was the brainchild of just one person, Jack Ma.

This VIDEO demonstrates an additional theme from the Go Lean book, that one person can make a difference in transforming society:

VIDEO: CBS News 60 Minutes – (Posted 09-28-2014) –
http://www.cbsnews.com/news/alibaba-chairman-jack-ma-brings-company-to-america/

(VIDEO plays best in Internet Explorer).

Jack Ma and Alibaba have greatly impacted Chinese society, elevating the economic engines. This result synchronizes with the Go Lean roadmap for elevating Caribbean society. The CU will employ technologically innovative products and services to impact its prime directives; identified with the following 3 statements:

• Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
• Establishment of a security apparatus to protect the resultant economic engines.
• Improve Caribbean governance to support these engines.

The Go Lean roadmap seeks to change the entire eco-system of Caribbean commerce and the interaction with postal operations. This vision is defined early in the book (Page 12 & 14) in the following pronouncements in the Declaration of Interdependence:

xv. Whereas the business of the Federation and the commercial interest in the region cannot prosper without an efficient facilitation of postal services, the Caribbean Union must allow for the integration of the existing mail operations of the governments of the member-states into a consolidated Caribbean Postal Union, allowing for the adoption of best practices and technical advances to deliver foreign/domestic mail in the region.

xxvii. Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.

Email and text messages have replaced “snail” mail in advanced economy countries for personal written communications. Electronic Bill Presentation & Payments (EBP&P) schemes are transforming business-to-consumer interactions, and electronic funds transfer/electronic commerce is the norm for payments. So ICT must be a prominent feature of any Caribbean empowerment plan. This is why creating the CPU and the Caribbean Cloud is “Step One, Day One” in the Go Lean roadmap. This is the by-product of assembling regional organs into a single entity with multilateral cooperation and a separation-of-powers (Page 71). The roadmap also includes establishment of the Caribbean Central Bank (CCB), as a cooperative among existing Central Banks, and its facilitation of electronic payments schemes so as to enable the region’s foray into electronic commerce and trade marketplaces, as depicted with the Alibaba/Alipay model in the foregoing article and VIDEO.

The Go Lean book details a series of community ethos, strategies, tactics, implementations and advocacies to foster the best practices for the delivery of the CPU and trade marketplaces in the Caribbean region:

According to the foregoing article, trade business models can be very successful as a strategy to grow the regional economy. Increased trade will undoubtedly mean increased job opportunities. The CU/CPU/CCB/Go Lean plan is to foster and incubate key industries for this goal, incorporating many of the best practices as related in the foregoing article and VIDEO; imagine a Caribbean-based marketplace – www.myCaribbean.gov – with 150 million subscribers (Page 74). Alibaba is now worth over US$231 Billion, though it is a recent start-up. This is a role model for the CU/CPU/CCB/Go Lean roadmap to follow, a methodical start-up with technocratic efficiency.

Now is the time for all of the Caribbean, the people and governing institutions (like Postal Operations), to lean-in for the changes in the book Go Lean … Caribbean. This is a Big Idea for the region, that of a Cyber Caribbean effort (Page 127), in which trade marketplaces play a major role. This roadmap is not just a plan for delivering the mail; it is also the delivery of the hopes and dreams of generations of Caribbean stakeholders; it is about delivering the future: a better place to live, work and play. 

Download the book Go Lean … Caribbean – now!

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Appendix – Commentary References:

11. “Ali Group’s revenue in 2011 amounted to $ 2.8 billion over 40% profit margin”. Sohu.com – Chinese Internet Search Engine . Retrieved 2012-06-07 from: http://it.sohu.com/20120607/n344991768.shtml.

12. “Alibaba group FAQs”. Retrieved 2012-06-07 from: http://www.alibabagroup.com/en/about/faqs.

13. “E-commerce in China: The Alibaba phenomenon”. The Economist. Retrieved 23 March 2013 from: http://www.economist.com/news/leaders/21573981-chinas-e-commerce-giant-could-generate-enormous-wealthprovided-countrys-rulers-leave-it.

14. Lianna B. Baker, Jessica Toonkel, Ryan Vlastelica (19 September 2014). “Alibaba surges 38 percent on massive demand in market debut“. Reuters. Retrieved 20 September 2014 from: .

15. “How Alibaba can double sales“. Retrieved 30 September 2014.

16. “U.S. to get coveted Alibaba IPO after Hong Kong talks founder“. Reuters. 25 September 2013. Retrieved 26 September 2013 from: .

17. “IPO launch of Alibaba pushed back by a week“. China National News. 1 September 2014. Retrieved 1 September 2014.

18. Picker, Leslie; Chen, Lulu Yilun (22 September 2014). “Alibaba’s Banks Boost IPO Size to Record of $25 Billion“. Bloomberg. Retrieved 23 September 2014.

19. Solomon, Steven Davidoff (May 6, 2014). “Alibaba Investors Will Buy a Risky Corporate Structure“. New York Times (Dealbook blog).

20. “Alibaba: The world’s greatest bazaar“. The Economist. Retrieved 23 March 2013.