Alibaba: Making inroads to become second largest e-commerce player surpassing eBay.

Topics: Alibaba Group, Electronic commerce, Taobao Pages: 17 (5436 words) Published: October 7, 2014
Alibaba: Making inroads to become the world’s second largest e-commerce player surpassing eBay.

Introduction

It was in the year 1999 that 18 people under the leadership of Jack Ma, a teacher from Hangzhou, China, were to begin a journey known as Alibaba Group. Its headquarter lies in Hangzhou itself. Alibaba group have established, as of December 2013, 73 offices in China and 16 outside its borders. At the end of the 2014, it was reported to employ over 22,000 people from across the world. It was initially conceived as an online wholesale channel for enabling small traders to get in touch and conduct business with global entities. The group operates several businesses such as Juhusuan, Aliexpress, Tmall.com, Alimama, Taobao marketplace,1688.com, Alipay and Alibaba cloud computing. At its heart, the core objective of Alibaba is to provide a platform via internet to small enterprises so as to benefit from modern innovation and communication technology in growing into profit centres, both domestically as well as internationally. The name “Alibaba” was chosen for its simplicity and catchiness and easy recognisability world over. Alibaba and its other branches function in an environment that is inclusive, where the online operant can fully utilize its medium to exponentially grow its business and keep its clients/customers satisfied. Right from day one, Alibaba has grown and diversified its range of services in online retail/wholesale, cloud computing and as gateways for online payment. Alibaba caters to both ends of the spectrum- the seller as well as the buyer. Both parties can browse, evaluate and choose to enter into transactions with one another. The beauty of Alibaba is that is free of cost and accessible to all. The buyers could be anyone ranging from simply someone who wishes to buy for his or her own consumption, to a buyer who wishes to source articles for his own business with intention to resell. Sellers such as manufacturers, retailers, brands and wholesalers use this space to stamp their and their product/service’s presence to a wide array of million customers and several disparate businesses. The several wings of Alibaba can be classifies as follows- AliExpress as the wholesale platform to enable small buyers to make purchase at wholesale rates. Tmall deals with customers and businesses. ETao is the comparatively smaller search tool. Alipay, much like Paypal is a third party online payment system provider. Aliyun handles data oriented computers and cloud computing. In 2013, Alibaba’s gross merchandize value reached to a staggering $248 Billion in value. Alibaba is not the proprietor of the merchandize sold over its websites and makes money through advertising and other related fees. Alibaba today stands as the website network with the highest gross merchandize value and strives to become the second largest e-commerce player usurping the likes of eBay. The main objective of this case study is delve deeper into the reasons for success and follow their journey and struggles to become the best. To shed more light on their expansion strategy, exploratory data will be availed to find facts and data to highlight the chances of them becoming the second largest e-commerce website in the world. Descriptive data will be used to emphasize on projections of the above mentioned becoming true.

Analysis of Alibaba’s business model:-

Unlike eBay, Alibaba does not carry specific merchandise. Rather it carries a very different mix of items and brands. Few of their offering includes everything from agriculture to transportation items. The list is not only limited agriculture, apparel, chemicals, environment, energy, printing and publishing, automotive, luggage, rubber and plastic, service equipment, textile and leather products. Alibaba has got a completely different business model as compared and practiced by other ecommerce giants such as Amazon. Usually companies like Amazon take the ownership of the...
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