publive-image

Alibaba is a multinational conglomerate company in China and a vital partner of SMEs. Since 1999, the company has been providing online market services to SMEs in the country and assisting them to sell to the world. The company operates in four segments – core commerce, cloud computing, digital media and entertainment, and innovation initiatives. Currently, it has nearly one million customers across 200 countries worldwide.

It has also an online marketplace with name Alibaba.com that offers an online trading platform and a one-stop service platform. Collections is one of the major offerings of this one-stop service platform. It allows Chinese firms to streamline their exporting process and suppliers can easily access order financing, manage logistics and export through their Alibaba account. And in turn, the company gains access to a wealth of trade information and offer direct benefits to importers in other countries, including shorter delivery times and detailed supplier exporting data for identification of qualified suppliers.

The Business Challenge

Alibaba, in order to help more SMEs globally, has exported its successful experience in China to other markets and continues seeking to expand its global presence. Its one-stop service platform involves thousands of different industries, various trade patterns, distinct buyers and millions of transactions from different countries and diverse currencies. 

However, Alibaba needed to develop a set of cash management solutions that seamlessly met the demands of a non-traditional model of collections and payments service. Also, the issue of cross-border remittances is particularly challenging for Alibaba.com when dealing with SMEs.

The Solutions: Alibaba Met with Citibank to Address Its Challenges

As an important partner of SMEs, Alibaba worked with Citi and developed three solutions to address the overall challenge. SWIFT gpi assisted greatly here, raising transactional certainty to new altitudes, with the faster settlement and enhancing overall customer experience by creating predictable settlement times and clear statuses.

Alibaba also deployed a Virtual Account Solution that addresses the need for an automated payer identification service which streamlines reconciliation for electronic receipts. Payer ID, implemented by Citi, can be customised by name and account, and a single virtual account number can receive funds in several currencies. 

For the third element of the solution, API connectivity and automated reconciliation offered a single-access to a global-connectivity API solution that leverages MT942 and MT940 in order to facilitate intra-day and end-of-day reconciliations. Thus, this enabled Alibaba OneTouch to gain real-time account activity and balance data to answer customer notifications and meet customer reconciliation needs.

The Outcomes

By leveraging solutions provided by Citi, Alibaba sees incredible outcomes, as follows: 

On the payment process, the new payment tracking system can now track every payment from each bank account under Alibaba, and can accurately check the payment status, precisely determine the source of funds, time involved and fees of each node in the remittance route.

For collections through SWIFT gpi, Alibaba can now seamlessly receive the status of each fund, the time taken and the cost of each intermediary bank through the route. Furthermore, this eradicated the uncertainty of transactions and payments and improved the experience of the entire transaction process. And in the future, reverse tracking may be possible to capture all the information once the inbound payment has been released.