Why Jack Ma Is Correct In Asking More U.S. Businesses To Sell To Chinese Consumers

Alibaba Group Holding Ltd BABA founder and Executive Chairman, Jack Ma, gave a speech in New York on Tuesday in which he asked more U.S. businesses to sell their goods to the Chinese.

Victor Anthony, Axiom Capital Management, was on CNBC recently to weigh in on Ma’s comments.

Strong Secular Growth

“I feel the math is very, very simple when you look at it. 650 million internet users on in China, that’s probably going to go to about a billion over the next 10 years,” Anthony said. “So, rapid, rapid secular growth story that exist there and e-commerce penetration rates are sub-10 percent, that’s probably going to go to in the mid-teens over the next 5 years.”

He continued, “So, there’s a strong secular growth story there for retail and retail over the Internet. So, I think it makes sense what he is saying to get [down] U.S. consumers, global consumers all over the world in my opinion to be selling to the Chinese economy.”

Global Platform

Anthony was asked does Alibaba really need to involve more U.S. businesses to sell to Chinese to support its business model. He replied, “They do not. I mean, they could support that business, I think, almost entirely through Chinese consumers…their numbers prove it out. But I think, he has aspirations to create more of a global platform and, I think, that’s what he is really talking about right now."

Authentic Products From U.S.

On why a Chinese consumer would buy a U.S. made product instead of one made in China, Anthony said, “In China…fraud, counterfeit products are a huge problem in their market. So, they will definitely get authentic products from U.S. sellers that’s number one to a large extent. They will get brand name products which are probably hard for them to get over there, U.S. brand name products.”