Jack Ma, the billionaire Chinese businessman behind e-commerce and media company Alibaba Group Holding Ltd., has a message for Canadian entrepreneurs curious about entering China’s market: don’t be so timid.
Reeling off an array of statistics about the strong appetite for foreign products among the growing Chinese middle class – some 350 million citizens now and potentially hitting 500 million after 2020 – Mr. Ma was stark about both the opportunity and the cost of missing out: “If you cannot do business with the Chinese, it will be difficult to do business with any other country.”
Speaking from Toronto’s Exhibition Place at the Gateway 17 conference organized by his company, Mr. Ma was joined on stage by Prime Minister Justin Trudeau in front of 3,500 attendees for a simulated “fireside chat” hosted by Canadian entrepreneur and reality-TV personality Michele Romanow.
“I think Canadian businesses have been very lucky for a long time to have a really big market directly to our south,” Mr. Trudeau said. “We now need to look at being bolder, less modest, less quiet … even though [China’s] further physically, what Alibaba means, what the Internet means, is it’s really not that far in terms of finding your customers.”
The pair shared a stage for almost an hour, bantering about the five previous times they had met and said that each pushes the other on issues such as empowering women entrepreneurs and breaking down barriers to trade between China and Canada. Mr. Ma’s solutions veered from talk of creating free-trade zones for small businesses within Canada to much larger initiatives, including a trade deal that would lower tariffs between the two countries. The Prime Minister confirmed that trade talks had advanced into substantial details but with no announced timeline.
At one point, Mr. Ma complimented Canadians for not being, in his view, too European.
“In Europe, there’s no big Internet companies,” said Mr. Ma, who then mocked what he saw as a hidebound bureaucratic culture. “They worry too much! ‘Ahhh, privacy, oh, security, oh, rules and laws,’” Mr. Ma said, to much laughter in the crowd.
Mr. Trudeau interrupted, saying: “I don’t know, here in Canada, we worry a lot about privacy and security, too … there’s a balance.”
Another moment of tension came when Mr. Trudeau joked that, unlike in Vancouver, in Bejing, you could see the air – a not-particularly-subtle reference to that city’s crippling air pollution problems.
Mr. Ma bristled that 100 years ago, all the great cities of the Western world were in the same straights and that China was racing fast and would soon catch up on quality-of-life measures such as air quality.
Both Mr. Ma and Mr. Trudeau pitched a romantic view of opportunity for “brand Canada” in China, built on a perception of this country as an unspoiled place, as well as a source of high-quality food and even luxury items. The two highlighted everything from maple syrup to fancy parkas, ice wine and even whole, live lobsters.
The lobster example comes from Clearwater Seafoods Ltd., the Bedford, N.S., company that sells live lobsters in China via Alibaba’s services.
According to Don Holdsworth, vice-president of global marketing at Clearwater, Canadian lobsters are, by volume, a small business for the company, and the margins aren’t great. But red-tipped bei gei bei, or Arctic surf clam, has become a popular sushi topping (referred to as hokkigai) and helped Clearwater triple its business in China in the past five years.
Selling in supermarkets and with a direct-to-consumer channel on Alibaba’s TMall app has also revealed the dark side of trading with China: IP theft. Bei gei bei is so popular that North Korean smugglers and Chinese counterfeiters have been cloning Clearwater’s boxes to sell a similar-looking clam caught off North Korea’s coastline.
Food safety is such a hot issue in China that Clearwater has gone so far as to plaster its boxes with a code that consumers can use to verify they have the real Canadian goods, caught in the Atlantic Ocean.