Case Study Alibaba.Com - 1

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Case Study Alibaba.com

According to Hitt, Ireland & Hoskisson (2009), “Alibaba’s first online marketplace was launched as Alibaba Online in December 1998” (p. 5). What began as a website for business to buy, sell and trade with each other was later expanded to more sites in which businesses-to-business operations were performed in the online marketplace. Although e-commerce in China has become a budding business, the number of those that engage in online shopping is still in its early stages. There is definitely room for growth as it pertains to e-commerce in China. “Official figures estimated that only 25.5 percent of Internet users in China had engaged in online shopping, whereas the figure was 71 percent in the United States” (Hitt, Ireland & Hoskisson et al., 2009). With China’s steady economic growth, Alibaba.com will be able to expand upon and utilize its growing consumer base. This is because as China’s economy continues to grow, more and more citizens and consumers will become aware of online businesses and the benefits of shopping online.

As it pertains to the industry environment, Alibaba.com has become part of China’s driving force that is SME’s. “In 2004, SME’s contributed 68.8 percent to the nation’s gross industrial output. iResearch estimated that the number of SME’s in China would rise from 31.5 million in 2006 to 50 million in 2012” (Hitt, Ireland & Hoskisson et al., 2009). With an expected increase in SME’s and the e-commerce platforms used, Alibaba.com was determined to set itself apart from the competition. In order to do this, Alibaba.com “believed that its online marketplace platform could be extended beyond pure trade marketing to address users’ daily business processes, such as customer relationship management and internal operations. It aimed to enhance the loyalty of its users by providing business applications through the marketplace platform and becoming an integral part of users’ business operations” (Hitt,...
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