In the fairytale The Thousand and One Nights, the cry of "Open sesame!" opens the door to the cave of Alibaba and his 40 thieves. Now, a Chinese business-to-business (B2B) electronic marketplace called Alibaba.com aims to open the internet trading door between China and the rest of the world.

The website was launched in March 1999 as a global marketplace for international trade, and now has more than 250,000 buyers and sellers from around 200 countries. In a first round of funding, the company received $5m in October 1999 from investment bankers Goldman Sachs.

Alibaba received a further $20m from Softbank, the Japanese investment company, in a second round in January 2000. Peter Sutherland, former director general of the World Trade Organisation (WTO) and current chairman of Goldman SachsInternational, and Masayoshi Son, chief executive of Softbank, both sit on Alibaba's board.

Jack Ma, Alibaba's founder and chairman, is a 35-year-old native of Hangzhou, the most beautiful city in the world, according to 13th-century traveller Marco Polo. After graduating in 1988 with a BA in English, Mr Ma lectured in English and international trade at Hangzhou Electronic & Engineering Institute from 1988 to 1995.

Mr Ma's 'road to Damascus' came in 1995, when he visited the US and encountered the internet for the first time. "When China was connected to the net in July 1995, I built one of the first Chinese websites," he says. Two years later, that site, Chinapages.com, had annual revenues of Yn6m.

At this time, Mr Ma built the website for China's Ministry of Foreign Trade and Economic Co-operation (MOFTEC). He was then asked to head the information department at MOFTEC's China International Electronic Commerce Centre (CIECC), where he developed a number of Government trade websites.

In early 1999, Mr Ma left CIECC to launch Alibaba. "Our core services revolve around 27 vertical industries, with Alibaba.com providing trade information and services relevant to each," he says. The four largest vertical sectors are agriculture, chemicals, industrial supplies and food and beverages.

In the future, Alibaba intends to become a fully functional trading platform with all transactions taking place online. "Every day, there are over 1,500 new postings on Alibaba.com, making it the largest and most up-to-date marketplace," says Mr Ma. A posting receives, on average, four potential business leads.

"We're employing the very best people to make sure our technology works optimally," says Mr Ma. One such person is John Wu, who designed the search engine for US portal Yahoo!, and is now Alibaba's chief technology officer with a new 17-strong research and development centre in Silicon Valley.

And what is the company's business model? "We are not charging for the current services," says Mr Ma. So how does Alibaba intend to make money? "Through charging for value-added services from a third party, like shipment," he replies. "Businesses using Alibaba are shipping containers of goods every week."

Mr Ma explains that shipping companies are going to give a 10 per cent discount to his members, and pay Alibaba a commission. "Shipment, insurance, banking, and quantity inspection are going to co-operate with us, because we are getting more business for them," he says.

Later, Alibaba intends to charge for online transactions. Mr Ma is rather vague about when the company will come into profit. A year or two, is what he suggests. "By the end of this year, we shall definitely have revenues," he says. "We are based in Asia, so almost everything that we do is very low cost."

Alibaba operates three interlinked websites. "The three sites have a different market focus," says Mr Ma. "By providing sites that target different markets, our members have the option to either trade internationally, or target specific domestic markets via an individual home page created, hosted and managed by Alibaba."

Mr Ma adds that Alibaba will soon be adding a Korean website, which will offer a bilingual user interface linking customers into the international site. "This is one way we are hoping to overcome language barriers," he explains. "We intend to launch Spanish, German, Italian, Portuguese, and Japanese sites this year and next."

Is Mr Ma concerned about competition from other B2B e-marketplaces, such as VerticalNet and TradeOut? "We are never concerned about competitors," he states confidently. Mr Ma compares the internet to a long-distance race where, so far, only 1,000 metres have been run. "You never know who is a competitor until you've run for about five kilometres," he says.

And how will Alibaba be affected by the US Government's vote earlier this year for 'permanent normal trade relations' with China and the country's likely entry to the WTO? "They will give the countries outside China a chance to trade with us much more smoothly and securely," says Mr Ma.

And what of the Chinese Government? Does he find it restrictive and interfering? "The Government is supportive of the internet and e-commerce," says Mr Ma, adding, "but one should try not to upset it." Although a Chinese website with overseas news would not be tolerated, the Government is unlikely to be upset with Alibaba's business site.

Mr Ma believes that the next few years will bring many changes for China. Indeed, like the fictional Alibaba, the electronic marketplace is opening the door to great riches (the robbers' cave in the West?).

"When you open the door," says Mr Ma, "you can never close it again."