Vancouver seen as a logical location for Alibaba

 

City’s technology industry and talent are a natural fit for Chinese ecommerce giant

 

BY EVAN DUGGAN, SPECIAL TO THE SUN NOVEMBER 18, 2014

 

Commercial realtor David Choi of Royal Pacific Realty poses for a photo with the proposed Oakridge development in Vancouver.

VANCOUVER — Jack Ma, China’s wealthiest man and the founder of international ecommerce giant Alibaba, has captured the attention of the Vancouver business and real estate community with comments that he is seriously considering launching an Alibaba office in Vancouver.

Ma, who is worth an estimated $25 billion, made the comments to Prime Minister Stephen Harper in Hangzhou on Nov. 7 ahead of the APEC leaders’ meetings, which took place days later in Beijing. The 50-year-old tycoon started Alibaba Group in 1999 and the firm is expected to handle some $270 billion in transactions this year.

Alibaba Group operates online sales platforms similar to Amazon under the banners of Taobao, Tmall and Alibaba.com. The services are available to businesses and individual consumers who are seeking to buy or sell products in more than 40 different categories such as electronics, clothing and machinery.

While Ma may have been shooting from the hip with his comments, his interest in setting up a so-called beachhead office in Vancouver comes as no surprise to David Choi, a high-profile Vancouver real estate businessman.

Choi, the founder of Royal Pacific Reality, said that Ma is likely interested in an Alibaba Vancouver anchor given the city’s deepening high-tech talent pool and reputation for livable conditions, and the region’s world-class universities.

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If Ma were to set up a branch office here it would also act as a major “vote of confidence” that could spark a boom of mainland Chinese commercial investment in Vancouver akin to the post-Expo residential investment surge in the late 1980s and early 1990s by investors from Taiwan and Hong Kong such as Li Ka-shing, Choi said in an interview.

“If Jack Ma decides to set up here, that would be a strong signal to the Mainland Chinese … by one of their own magnates, one of their own rising stars — the latest tycoon,” he said.

Alibaba is succeeding in borderless transactions, one of the most dynamic sectors of the economy, and has “provided a platform for countless small enterprises aspiring to become medium enterprises,” Choi said. “I think Alibaba is targeting something much bigger.”

A Canadian beachhead, possibly in Vancouver, would give Ma a platform to do business with the vast number of small and medium-sized enterprises in the country.

Choi said his firm’s number of commercial transactions in Vancouver involving Mainland Chinese is increasing each year and he predicts “exponential growth” in coming years. “We have seen this year a number of very large sales,” he said. “Buyers buying property with the intention to develop.”

However, most of the interest from Mainland China in Vancouver continues to be focused on residential properties and commercial investments, and hasn’t translated yet into Chinese firms setting up branch offices in the Lower Mainland, he said.

When Chinese firms do search out office space, most of the interest has been focused on smaller “liaison” office spaces of about 2,000 square feet, he said, “but not in any large operational way.”

Alibaba declined to make anyone available to comment for this story, and a spokeswoman via email downplayed Ma’s comments about his interest in Vancouver.

“Ma mentioned that Vancouver is a place of interest for its technology industry and talent,” Alibaba spokeswoman Pamela Munoz said in the email. “I can tell you, though, that no definite plans for investment in Canada are currently in place.”

Office specialist Colin Scarlett of Colliers International in Vancouver said the message he is receiving from Mainland China is that interest in Vancouver is on the upswing.

He travelled last spring to a conference in China that involved Colliers representatives from around the world. “Whenever we went to meet with either clients or with our offices in Beijing, Shanghai and Hong Kong, when it got opened up for questions, the first person that they called upon was me, for Vancouver’s perspective,” he said. “What are the opportunities? Who are the ownership groups in Vancouver? What’s the best way to get in?”

Scarlett pointed out that their interest had nothing to do, however, with setting up branch offices. “It had everything to do with interest in purchasing either commercial or multi-family residential,” he said.

But that could soon change, especially if Ma is serous about what he says, he added. “I think Vancouver has proven itself to be a technology hub that can stand on its own against some of the best in the world and it has a lot to do with the quality of labour here, and the quality of talent that the universities put out,” he said, pointing to offices in Vancouver held by other large tech firms such as HootSuite, Global Relay, Microsoft and Facebook.

“I’d be surprised if [Alibaba] didn’t realize Vancouver for everything that it has and set up a beach-head office within the next 12 to 24 months,” he said.