Alibaba notes
1. How does Alibaba create a competitive advantage? Is this advantage sustainable?
a) Alibaba hoped to pool enough stable transaction volume to negotiate bulk discounts from service providers and capture part of that discount for itself. As Ma put it, “If one million users are transacting daily, Citibank and UPS will come to me. We can offer a discount to customers in exchange for a commission.
b) It also helped that Alibaba Group offered a host of services promoting online trade including: an international B2B marketplace that helped match China’s small businesses with foreign trading partners (Alibaba.com), A domestic B2B marketplace (Alibaba.com.cn), China’s largest online shopping website providing a platform for both retailers and individuals to sell virtually anything (Taobao), Online payment services (Alipay), Internet-based business management solutions (Alisoft), Online advertising exchange (Alimama), and an entertainment portal (China Yahoo!).
b.1. This brand and line extension of products helped designate Alibaba as the primary E-commerce corporation for China, and helped as an isolating mechanism keeping other smaller startup tech firms out of the market (If all the website ideas are taken, there is nowhere to introduce one’s brand/product).
c) Experienced incredible growth in 2008 as operating profit increased by 48% to 1.2B RMB ($172 million), booked revenues increased to 3B RMB ($432 million), and added 10.5 million registered users and 1.7 million storefronts.
c.1. At the end of 2008, 7.9 million registered users and 970,000 storefronts encapsulated the international marketplace, and 30.2 million registered users and 3.6 million storefronts encapsulated the domestic marketplace.
d) Jack Ma was notorious for saying that we have no revenue model. The most important thing is to have critical mass. It gives you time to figure out what customers want. Let people make money. Let them use Taobao before we make money.
d.1. In 4 years from
a) Alibaba hoped to pool enough stable transaction volume to negotiate bulk discounts from service providers and capture part of that discount for itself. As Ma put it, “If one million users are transacting daily, Citibank and UPS will come to me. We can offer a discount to customers in exchange for a commission.
b) It also helped that Alibaba Group offered a host of services promoting online trade including: an international B2B marketplace that helped match China’s small businesses with foreign trading partners (Alibaba.com), A domestic B2B marketplace (Alibaba.com.cn), China’s largest online shopping website providing a platform for both retailers and individuals to sell virtually anything (Taobao), Online payment services (Alipay), Internet-based business management solutions (Alisoft), Online advertising exchange (Alimama), and an entertainment portal (China Yahoo!).
b.1. This brand and line extension of products helped designate Alibaba as the primary E-commerce corporation for China, and helped as an isolating mechanism keeping other smaller startup tech firms out of the market (If all the website ideas are taken, there is nowhere to introduce one’s brand/product).
c) Experienced incredible growth in 2008 as operating profit increased by 48% to 1.2B RMB ($172 million), booked revenues increased to 3B RMB ($432 million), and added 10.5 million registered users and 1.7 million storefronts.
c.1. At the end of 2008, 7.9 million registered users and 970,000 storefronts encapsulated the international marketplace, and 30.2 million registered users and 3.6 million storefronts encapsulated the domestic marketplace.
d) Jack Ma was notorious for saying that we have no revenue model. The most important thing is to have critical mass. It gives you time to figure out what customers want. Let people make money. Let them use Taobao before we make money.
d.1. In 4 years from