Business Report and Event Evaluate|
0930600165 Lancer 赵瑞晗|
1030600069 Jason 梁颖1030600076 Myann 林跃1031300033 Su 罗瑶1030600140 Melody 吴晓彤1030600142 Echo 吴卓玥| 2012/10/23|
Business Communication group Project|
Section A: Alibaba3
B.Brief history of Company Development4
1.Establishing group period: 1998 – 19994
2.Forming diversification period: 2000-20034
3.Forming group principal activities period: 2003-20074
4.Modernization and internationalization development period: 2007-now5
2.Ali international business (alibaba.com):6
F.Evaluation & recommendations7
Section B: Event Evaluate----The Establishment of Alipay8
A.What is Alipay?8
B.Background for set up of Alipay9
C.Target clients and strategic objective9
E.Opportunities and Challenges11
Section C: Reference13
Section A: Alibaba
Alibaba Group was founded by Ma Yun (Jack Ma) and other 17 people in 1999 in Hangzhou. It is the first electronic commerce company in china, which provides a platform for small and medium-sized manufacturers to trade products both in domestic and foreign market. It is generally recognized as the top B2B (Business-to-Business) company in China. The company has 13 sub-companies now and constantly improves for the mission of being one of the world’s top internet sites.
B. Brief history of Company Development
1. Establishing group period: 1998 – 1999
In December 1998, the establishment of “Alibaba Online” marked the birth of the Alibaba Company. At this period, Alibaba group set up their special B2B business model and affirmed their main development strategy. 2. Forming diversification period: 2000-2003
During this period, Taobao was brought out. Alibaba Group started to devote itself into C2C (Consumer to Consumer) business. Alipay, which is the third-party payment platform, was also established for making online trade more effective and efficient. These two major events can be regard as the inevitable outcome of the B2B model and attempt of diversification by Alibaba Group. 3. Forming group principal activities period: 2003-2007
After attempt of diversification, Alibaba group took over Yahoo Inc.'s China operations in 2005 and set foot in search engine and classified information business. During this period, seven business module of Alibaba Group was shaped. It is the basis of Alibaba development model of perfection and expansion. 4. Modernization and internationalization development period: 2007-now In November 2007, Alibaba.com successfully listed on the Hong Kong Stock Exchange. It marked the beginning of internationalization development in Alibaba’s history. In the same year, Alibaba Japanese Website was built. Alibaba Group R&D Institute was established subsequently. Owing to constantly grow, in 2012, Alibaba exited Hong Kong stocks market and implemented privatization officially.
C. Business operations
“Meet at Alibaba”: Fully research the market satiation in China in 1999, Alibaba set a strategy of “meet at alibaba”, which is provide supply and demand information for free for the majority of small and medium-sized enterprises (SME). Even though the internet bubble burst in 2001, Alibaba still adhere to the policy of free, for this reason, Alibaba gathered a large number of supply and demand information in a short time and become widely popular.
“Work at Alibaba”: On the basis of popularity expanded rapidly, its overall development strategy from” meet at Alibaba” to “work at Alibaba”, and the object of this strategy is to help SME survival, growth and development. For instance, Alipay begin to cooperate with bank to arrange loans for SMEs, which attempt to address the issue of development funds for SMEs.
Alibaba group do the diversified internet business, including online trading market, online retail and payment platform, online shopping search engine, and distributed cloud computing services, and aimed to creating convenient online trading channel for all global people. In July 2012, Alibaba group adjust its core business into seven business groups, respectively for “alibaba.com”, “1688.com”, “taobao.com”, “tmall.com”, “juhuasuan.com”, “etao.com” and “aliyun.com”. Beside these seven business groups, Alibaba have “Alipay.com” and wholly owned “yahoo.com.cn”. 1. Ali international business (alibaba.com):
“Alibaba.com” is one of seven business groups, primarily to assist global small enterprises to expand overseas business through the electronic-commerce. By July 30, 2012, Ali international business has registered users for 29.4 million, 2.5 million number of enterprise shops and service covering more than 240 countries and regions. 2. Taobao.com:
Taobao was established in 2003, and now is China’s largest retail website, owns 78% shares in online retail market. Taobao has covered the most merchandise categories, from collectibles, rate products to mainstream retail goods, such as electronics, clothing and sporting goods. By June 2012, Taobao has more than 800 million pieces of product information and more than 500 million registered users, and now is one of the 20 sites with the highest global views. 3. Yahoo.com.cn:
In October 2005, Alibaba group acquired yahoo China, and now wholly owned it. Yahoo China is the first Chinese portal website to service the China market, focused on providing information to the Internet, email, search and other basic service.
E. Target markets:
In the early stage of the Alibaba was established, company made full analysis of the prevailing market environment, accurately identified target market and market demand, and then decided to choose small and medium-sized enterprise rather than large enterprise as the breakthrough point to venture into e-commerce.
F. Evaluation & recommendations
As a world’s leading electronic business company, Alibaba is also the flagship business of the Alibaba Group. It is an online trading platform created by Ma Yun in Hangzhou, China on 1996. Alibaba Group now has thirteen subsidiary companies on hand, which primarily includes: Alipay, Taobao, Alibaba, B2B, Tmall and Etao. Since its inception, the core mission of the Alibaba Company is to make trading easier to businessmen all over the world. Nowadays it has over nineteen million members which come from over two hundred countries and regions. The member groups are mainly made up by entrepreneurs and some SMEs (small and medium-sized enterprises). Alibaba believes that by connecting the power of Internet and the open and fair global trading environment, more economic chances will be created and the world’s poverty problem will be solved to some extent. Here are some recommendations for Alibaba. Firstly is to develop and complete the online trading system. In that case more and more members will be attracted to join in. Secondly, is to improve the online trading security system, especially the online payment security. It is important because only when the payment security can be made sure about do the customer shop online.
As was stated above, Alibaba has done a great job in term of the online trading platform. It is a successful company in China. However, with the electronic market developing rapidly, some problems arise like personal privacy disclosure and the online payment insecurity. There are still more for Alibaba to do in the future in order to survive in the competitive market.
Section B: Event Evaluate----The Establishment of Alipay
A. What is Alipay?
Alipay is an affiliate of Alibaba Group. Launched in 2004, Alipay is a commonly used third-party online payment solution in China. It provides an easy, safe and secure way for millions of individuals and businesses to make and receive payments on the Internet. Shoppers have the ability to verify whether they are happy with goods they have purchased before releasing funds to the seller. It also offers an online payment solution to help merchants worldwide sell directly to consumers in China and supports transactions in 12 major foreign currencies. Alipay partners with more than 100 financial institutions including leading national and regional banks across China as well as Visa and MasterCard to facilitate payments in China and abroad. In addition to Taobao Marketplace and Tmall.com, Alipay provides payment solutions for more than 460,000 merchants, covering a wide range of industries including online retail, virtual gaming, digital communications, commercial services, air ticketing and utilities.
B. Background for set up of Alipay
1. Incomplete network consumption environment which problems of credit system, online payment and logistics network had not been solved. 2. Demand of consumers for easy, safe and secure way to make and receive payments on the Internet. 3. Rapid development of Internet and online shopping in China.
C. Target clients and strategic objective
Alipay is based on a concept which is satisfied with customers’ need and fits the internet trading environment. Therefore, at the very beginning, Alipay served only Taobao and its target clients are the consumers from Taobao. After transforming into an online payment platform, more and more people knew this corporation. And Alipay serves the users from Alibaba China and users from other websites. The strategic objective of Alipay is transforming into online payment platform, so that it can co-operate with different kinds of merchants and provide services to different kinds of customers. Alipay also co-operate with online banking which can provide them money and enables them to expense the business.
D. Establishment course
In 2003, Taobao was just set up and faced the predatory competition from the Ebay. In the beginning period of online shopping, Ebay has already gain the popularity form people who is willing to try the fangle. Companying to the Ebay, Taobao is at a disadvantage, therefore, it must find some ways to make online shopping more convenient so that it can achieve a competitive advantage. At that time, online payment was one of the difficulties in online shopping. There are two ways to pay the money. The first one is bank transfer and the other is cash on delivery. However, both ways are difficult to soft the problem of integrity, so Taobao set up a pay department which is a third party guarantee called Alipay. When buyers want to buy something on the internet, they firstly pay the money to Alipay and told seller to send the goods. After receiving the goods, buyers can tell Alipay to pay money. Alipay solves the problem of integrity and enables Taobao to develop rapidly. In 2004, realizing that Alipay can become an instrument of e-commerce; the technology team make Alipay to be independent from Taobao. After becoming a third party payment company, Alipay fits the basic strategic positioning—providing the basic facilities service to electronic commerce. In 2007, external customers such as online games, e-commerce and electronic ticket have contributed to Alipay up to 30% turnover. In 2008, an increasing number of external customers wanted to cooperate with Alipay and Alipay also made some rules for its consumers. Nowadays people can not only pay money for online shopping, they can also pay credit card payment, water and electricity bills through Alipay.
E. Opportunities and Challenges
Actually, online payment is a large market and Alipay only step into a little part of it. Therefore, Alipay should find out the blank of this market and expand its business to these fields. As a payment platform, the core value of Alipay is to integrate so many bank resources and provide convenience to both the buyers and sellers. In 2007, many domestic air companies carried out electronic ticketing which boost the development of online payment. Because of the bank resources, Alipay cooperated with 19 airline companies among 20 airline companies. Nowadays, Taobao only contributes 50% of the volume of business. Alipay will also be used to many other fields in the future. In 2010, central bank decided to issue the third party payment licences which will readjust the online payment market and those who do not meet the conditions will be prohibited to operate. Experts conjecture that more than half of the online payment corporation will be weed out. However, the Alibaba corporation is going to invest 5 billion in 5years, helping Alipay to bring in more talents and improve the facilities, which enables Alipay became leading role in the market.
With the development of Chinese e-commerce and electronization of traditional business, the demand of third-party payment becomes more in the e-commerce market. Different from traditional face to face trade, networked transaction need third-party payment such as Alipay to provide intermediary services and third-party guarantee to help it to work. In this fast developing e-commerce market, Alipay always be in the lead of market share. Over 200 million registered users make Alipay become the biggest third-party payment platform in the world. After the establishment of Alipay the five subsidiaries of Alibaba Group constitute a perfect scheme to solute the e-commerce. Alipay solve the payment, B2B solve the trade between the enterprises, Taobao solve the retail, Alibaba solve the adverting and promotion, and Yahoo is the comprehensive platform of some application. On the other hand, independent and open also make Alipay easily to communicate with other company, and become the most important part of Alibaba Group. Then, Alipay pay more attention about the livelihood of the people to satisfy the users’ demand. Using Alipay will help people to solve their e-commercial problem such as payment, recharging and purchasing with high efficiency. Second, Alipay provide a perfect save platform for user’s to use their personal imformation in the transaction. A variety of encryption and real name authentication system make both the sellers and buyers are at ease,
After several years’ development, Alipay already become the market leader of third-party payment, and also get some fantastic achievement. But to face the competition from other third-party payment competitors, Alipay should reinforce its advantages to get a smooth development. And Alipay also need to pay attention about the Chinese governmental policy which would directly affect the development of Alipay. For the profit model, Alipay need to reinforce its credit function to get more transaction fee, and they also need to find more profit model such as cooperate with some local bank. But in a word, Alipay make Alibaba Group to be perfect.
Section C: Reference
Wenjing, C. (2010). The evolution of Alipay. Retrieved on 16th October, 2012 from: http://money.163.com/10/0621/16/69NE1KAT00253G87.html Christine Zhen-Wei (2007 ). China's information revolution : Managing the economic and social transformation. Herndon. Retrieved from http://site.ebrary.com/lib/uiclib/docDetail.action?docID=10176244&p00=alibaba
Sherman, Westland, S., Christopher, J. (2010). Red wired : China's internet revolution. Singapore. Retrieved from http://site.ebrary.com/lib/uiclib/docDetail.action?docID=10424379&p00=alibaba Admin (2001). Alibaba.com brings Trust to online B2B commerce