HANGZHOU - The online commerce operator Alibaba.com Ltd, partly owned by billionaire George Soros, is seeking to further improve the security and quality capabilities of its merchants, a move that will enhance revenue as it expects to make $200 billion this year from the business-to-business platform.

On Tuesday Alibaba.com signed an agreement with London-based Intertek, a quality and safety solutions provider to assess its online merchants. The agreement came following the termination of about 1,200 suppliers in the third quarter from Alibaba.com's export-oriented Gold Supplier program. The cooperation with Intertek is also part of Alibaba's effort to crackdown on quality problems in online trading, which it aims to further improve customer experience and foster value-added services in the long run. "More than 74.5 percent of online buyers don't believe the information given by the suppliers," said Peng Yijie, vice-president of Alibaba.com during the signing ceremony, which was held at the e-commerce operator's head office in Hangzhou. He said that more than 90 percent of buyers visit the suppliers or entrust a third party to investigate before finalizing their purchases.

However such investigation is rare, as the majority of local small buyers, including those from abroad, could not afford the time and money to do so.

Under the agreement with Intertek, it will allow the company to comprehensively assess the manufacturing and trading capabilities of Alibaba.com's merchants. The assessment also includes the number of staff in a company, production capability, trading potential and future product and service development. Following this, Intertek will grant approval via a certificate with assessment reports to the approved merchants. Alibaba.com will then highlight these qualified merchants on its website.

"The cooperation will help Alibaba.com to systematically manage online members and enhance the brand trust of its trading platform," said Peng.

Fred Bai, China president of Intertek, said that during the first month of trial operation, more than 500 Web merchants of Alibaba.com applied for its certificate and about 1,000 more expressed their willingness to accept Intertek's assessment. Bai said Intertek is also discussing the cooperation with Taobao.com, China's largest online retailing site, which is operated by Alibaba.com.

So far, the cooperation is limited to product quality examination sold by Taobao.com shopping malls.

Analysts believe that the cooperation will enhance the brand trust of Taobao.com's shopping platform. It could also help Taobao.com get rid of a negative reputation that it is "a platform that sells copyright infringement products", which is seen as an effort to pave the way for Taobao.com to seek an IPO. The cooperation with Intertek is said to be part of Alibaba.com's strategy in exploring the international market and quickening its globalization process.

In August, Alibaba.com purchased US-based Auctiva, a third-party software developer for e-commerce websites.

The e-commerce operator said in August also that it is eyeing to acquire US companies to expand its overseas business.

Alibaba.com recently revealed its third-quarter financial report, saying that profits rose 55 percent to 366 million yuan from a 236 million yuan a year earlier. Peng from Alibaba.com said that the total revenue from the business-to-business platform is expected to reach $200 billion this year alone.

By Lu Hong (China Daily)

(China Daily 11/17/2010 page17)