We have known two Alibabas: One is the hero in Arabian Nights who opened the door of fortune; the other is the e-commerce website founded by Ma Yun (President and CEO of Alibaba.com, a well-known b-to-b company in China and all over the world), who is madly worshiped abroad. Now a third Alibaba has come along: an Arabic TV station acquired by a businessman in Wenzhou, a city in Zhejiang of China.
Wang Weisheng, the president of the Guangzhou Gulf Culture Communication Company, teamed up with his partner Liu Haitao last December to purchase the United Arab Emirates (UAE) state-owned television station Aldeer TV. They renamed the channel Arab Alibaba Business TV (AABTV), and it went to air on August 1 2006. The station provides programs in both Arabic and English to the Middle East and North Africa, offering a window into Chinese industries and culture.
As the first overseas satellite TV station purchased by Chinese, it is a brand new concept designed to help Chinese enterprises explore the Middle Eastern market.
Purchase
In 1998, Wang Weisheng, who had years of experience and savings from the domestic garment business, went to Dubai on a sightseeing trip. He was impressed and tempted by the emirates preferential taxation policies and commercial atmosphere, so he migrated to Dubai with his family.
“In the past we sold garments by piece, now we sell by container,” explains Wang. “As Dubai is a free port connecting the whole Middle East and even North Africa, this quantity is more than significant.” Wang regards his migration to Dubai as a decisive turning point in his life. In 2003, he expanded his business to furniture and household articles and became an agent for several domestic factories in the UAE and Middle East. He even hired managers to help him with his business.
But good times never last long. When Wang traveled to Dubai in 1998, its population was about two million, with less than 5,000 Chinese. Because the city was young and only grew after the discovery of oil in the area in the 1960s, almost everything except petroleum was imported, which left ample room for market development and profit.
After 2000, thanks to more promotion by the local government, numerous traders rushed to the city. Today, the population in Dubai is more than four million. Natives make up about one million, while the rest are traders from 140 different countries. Most of what they sell is inexpensive, Made-in-China goods, which are attractive to local consumers. Price wars have become the order of the day.
“I was acquainted to a domestic European-style furniture supplier, 90% of whose products were exported to the Middle East,” says Wang. “Due to the absence of their own reputable brands, they were obliged to slash costs and went so far as to use inferior materials. It was a case of lower quality, lower prices, and then worse material. Eventually it went bankrupt.” As the agent for the furniture supplier, Wang was affected by the incident.
In early 2005, the general manager of Dubai Media City came to Wang and requested some video programs introducing landscapes and providing information about China to improve its ratings. This proposal inspired Wang: if it is possible to introduce Chinese landscapes and culture to the Middle East, why not present Chinese enterprises and their products in the same way? It would certainly help Chinese enterprises build their own brands and bring a halt to the abnormal price competition.
In the Arabic countries, foreign trade accounts for 53% of their GDP, in which 40% of their imports each year come from China - and the figure is still rising fast. Despite a bilateral trade volume of US$ 51.1 billion last year, almost no traders, except a few European luxury products, can distribute brands on account of the cutthroat competition. Some Chinese manufacturers even regard the region a landmine, and those who care about brand and quality are reluctant to trade there.
In Wang’s mind, helping Chinese enterprises build their own brands in the Middle East is surely a good deed, and might be good business as well. He noticed Aldeer TV shares with the famous Al-Jazeera Satellite TV Channel the Nilesat satellite, which covers 21 Arabic-speaking countries with 400 million people. “Why not buy the TV station?” he mused. His best friend in Dubai Liu Haitao immediately applauded his idea.
Liu used to be the general agent in the Middle East of Sun TV, a major Hong Kong-based Satellite TV broadcaster of cultural and information-related thematic programs. He was among the first group of Chinese Wang met in Dubai. They jointly founded www.dibai.com in 1999, the largest Chinese website in the Middle East. They submitted applications to the local government and after one year, the two finally acquired a 100% share of the Aldeer TV station with a high price.
After the acquisition, all of the employees of Aldeer - except the founders and a few technicians and broadcasters - were dismissed for re-recruitment. The president, a veteran TV professional who’s familiar with the operation of satellite TV in Dubai and the Middle East, was offered a portion of the shares.
