HANGZHOU, CHINA – Recently ousted Alibaba.com CEO David Wei and COO “Elvis” Lee have both left the building. While the majority of the western world was sleeping at approximately 4:45pm Beijing time, things were downright explosive on the opposite side of the planet, before most Chinese residents had even begun their Monday evening commute home. News of the pair’s abrupt resignation riveted the wholesale, retail, and manufacturer community in what most members of those industries consider the undisputed epicenter of goods, that are exported to the rest of the world.

(photo credit: Reuters)

Now, as daylight breaks over buyers and sellers in Europe and North America, the shock wave will undoubtedly continue to shake things up. TopTenWholesale.com was the first to break the story, but it didn’t take long before virtually every major media outlet in cyberspace had pieced together stories of their own, and headlines about the scandal that rippled through Hangzhou flourished upon search results pages soon afterward.

The next logical questions, of course, are simple ones:

• What will become of global trade, as buyers find themselves doubting the authenticity and ethical conduct of the world’s largest B2B marketplace, China-based Alibaba.com?
• How long has the company known of unethical and illegal practices being conducted under its watch?
• Will the ensuing PR nightmare ever fade away enough to allow customers to regain trust?

Reports are hitting the news wires about the online giant hustling millions of dollars out of clients in every corner of the globe, and it comes at a time when, perhaps ironically, the company had aggressively thrust itself into the American marketplace with a series of personal visits from founder Jack Ma, as a way to build relationships with eager customers who were willing to take Alibaba for a spin.

Prospective customers are more likely to kick the tires and do more shopping around for alternatives before signing on the dotted line, after reading the news of the company’s alleged involvement in defrauding thousands of customers with phony storefronts, some operating as far back as five years ago, or longer. A source in Alibaba’s home city of Hangzhou – who refused to be named – stated quite frankly that “it [has been] known by insiders for years that fraud exists in many years on Alibaba. [It happens] with factory owners having friends and families open accounts to fake Chinese companies having a gold supplier membership with the only [aspiration] of stealing your money.”

When contacted for a statement of his own, Jason Prescott, CEO and founder of JP Communications, said “This is indeed very unfortunate for Alibaba. Jack Ma built a truly great company, but it is now quite clear that a new industry standard is needed. It will be years before trust is regained again, and Alibaba, which was already having a hard time penetrating the enormously valuable USA marketplace, will find itself with yet another major obstacle to overcome.”

With that being said, experts in the industry are pointing out the value of alternatives, as proprietary credit services like Manufacturer.com and the Supplier Pass™, which is based out of the USA and backed by a team of savvy industry experts, and come at a time when viable options are needed in secure global sourcing.