Question
i went future initiatives and Conclusion for Alibaba ??? Introduction: Alibaba, is Chinas biggest online commerce company. It has three main sites: Taobao, Tmall and
i went future initiatives and Conclusion for Alibaba ???
Introduction:
Alibaba, is Chinas biggest online commerce company. It has three main sites: Taobao, Tmall and Alibaba.com, and hosts millions of merchants and businesses. The company handles more business than any other e-commerce company. It considered to be the most popular destination for online shopping in the worlds fastest growing e-commerce market. Chinas[1] online shopping market is dominated by 80% of Alibaba. After raising $25 billion, it has become one of the valuable tech companies worldwide, from its US IPO. As well as, one of the most valuable Chinese public companies, ranking among some the countrys state-owned enterprises (LAJOIE & SHEARMAN, N/A).
Alibabas business is comprised of core commerce, cloud computing, digital media and entertainment, and innovation initiatives. Alibabas digital economy generated Ren Min Bi (RMB) 7,053 billion (US$1 trillion) in Gross Merchandise Value (GMV) in the 12 months ended March 31, 2020. It included GMV of RMB 6,589 billion (US$945 billion) transacted through China retail marketplaces. The GMV transacted through our international retail marketplaces and local consumer services (N/A, 1999-2020).
Their vision is to aspire to be a good company that will last for 102 years and aim to build the future infrastructure of commerce. Their business models and systems are built to last, so that we can achieve sustainability in the long run. Their ultimate goal is to create value for society and help find solutions for societys challenges. They are thinking about converting Alibabas resources into fuel for small and medium businesses that will support the advancement of the whole society (N/A, 1999-2020).
The group was founded in 1999 led by Jack Ma and 18 people. Jack Yun Ma was a former English teacher from Hangzhou, China. He was the lead founder since May 2013, has served as the executive chairman and chief executive officer. He currently serves on the board of SoftBank Corp, a Japanese corporation listed on the Tokyo Stock Exchange and is one of Alibabas major shareholders. He is also a director of an entertainment group in China, Huayi Brothers Media Corporation, and is listed on The Shenzhen Stock Exchange, as well as the chairman of The Nature Conservancys China Board of Directors and a director of its global board of directors. He joined the Breakthrough Prize in Life Sciences Foundation as a director in September 2013 (Ahern, N/A).
They founders started the company to champion small businesses. They believed that the Internet would help small enterprises to leverage innovation and technology and as a result they grow and compete more effectively in domestic and global economies. They focus on customer needs and solving their problems whether they were consumers, merchants or enterprises, they will thrive to the best outcome for their business (N/A, 1999-2020).
Alibaba is considered an important group because its initial public offerings became the biggest ever at $25 billion on September 19th, 2014. China has the largest number of internet users[2] worldwide despite having only 45% of the population having any access to the internet. Chinas e-commerce will surpass the USA as measured by GMV and it is believed the company will be a case study for graduate schools globally due to their continuous innovation and growth since 1999 (Ahern, N/A).
In 1999, Alibabas operations began with Alibaba.com[3] as an English language marketplace for global trade and as a business to business idea. It was founded to aid small exporters who are engaged in manufacturing and trading, located in China, to reach buyers worldwide. In the same year, it launched a Chinese language wholesale marketplace for local China trade among small businesses which is called now as 1688.com and was considered a business to consumer idea. This platform has evolved into a wholesale merchants channel to do business on their retail marketplaces to source products (Ahern, N/A).
Alibaba runs marketplaces and has a huge customer base, the amount of business flows over the sites decreases that of other e-commerce companies, but earns less revenue than global peers. It charges merchants for advertising and transaction fees to make money. Its net income grows rapidly and makes a profit on its revenue. Millions of merchants use its shopping sites depend on advertisments to stand out from the crowd (LAJOIE & SHEARMAN, N/A).
There was an unwillingness from the buyers to effect payment before receiving and inspecting their purchases, and sellers were unwilling to ship products until they were sure that they receive the payment. This posed as a challenge for the development of online commerce in China. Alipay was established in 2004, to address the issue of trust between buyers and sellers online and solve this issue. Alibaba is no longer in control nor has ownership interest in Alipay since 2011, but it still participates in economic benefits through contract arrangement (Ahern, N/A).
Alibabas e-commerce platforms offer discounts to attract people who buy themselves a gift on November 11, which celebrates ones single status[4]. This generated US $9.3 billion in sales based on 278.5 million transactions (Ahern, N/A).
Kholoud and Nouras part.
2.e. Business Model of Ali Baba
A business model explains the reasoning for developing, delivering and capturing value. It can be represented in 9 components: consumer groups, value proposition, channels, customer relations, sales streams, key resources, key operations, key alliances and cost structures.
Alibaba has been the world's biggest smartphone and online enterprise in only some years and hardly anybody anticipated it to thrive. Small and medium-sized businesses have been able to utilize advanced technologies to perform more effectively both internationally and externally. The following model represents the business model of Alibaba.
2. e. Competitive strategies of Alibaba:
Although company had to face intense competition from the companies such as Jinggdong.com, Tencent, and Amazon, Alibaba with its differentiation and cost leadership strategy was able to acquire large market share by executing innovative and customer centric strategies. According to Jack Ma and acting CEO of the organization, Jonathan Liu, its customer center and welcoming ideology are credited fro the success of the company. Following are some of the examples of its differentiation and cost leadership strategies:
- The very flexible and superior supply chain of Alibaba provides the business with a cost advantage. This ensures that the business will supply better goods for quicker distribution at reduced prices.
- The economies of scale are another advantage for Alibaba. Since the business is willing to recruit a vast variety of suppliers and clients, it may bargain with suppliers at reduced costs and thus pass these advantages to customers.
- Alibaba is able to provide superior customer value and service at low online costs, which enhances its customer base and results in sustainable growth in a very competitive Chinese market.
- Alibaba tailored its website to the requirements of its local Chinese customer. Chinese consumers want websites that deliver in their main page everything they need. As a consequence, Alibaba has been China's favorite e-commerce firm.
Mohammeds part
Discussion
Alibaba.com is a business-to-business initiative. It connects manufacturers and buyers worldwide. Alibaba has recorded $30.8 billion worth of orders on November 13, 2018. The company focuses on small enterprises with a large variety of goods is made available to a large variety of target consumer groups. It charges for services in marketing and support which contributes to large and robust market share made up of loyal customers. The profits mainly come from advertisements and keyword bidding that equals to 57% of the total profit and the services based on big data of consumer behaviors presents 25%. By removing the intermediate fees they allowed sellers to register for free and was able to cultivate the online transaction habit among Chinese customers. Alibaba platform represents more than 500 million registered users, including 230 million more active buyers and 8 million active sellers. Alibaba group went public in the USA on September 2014 and has grown at a fast pace. It poses a market cap of more than $500 billion. The e-commerce platforms now have more than 550 million annual active consumers. On March 2017, the group reported profits more than $15 billion on nearly $40 billion in revenue.
Alibaba.com identifies key factors to its success in its business model. It is considered as the only e-Marketplace which includes business-to-business, business-to-consumer and consumer-to-consumer. It is the worlds number 1 international and domestic trade e-Marketplace in China. The vision is to be the worlds largest single e-Marketplace for online shoppers and to become a premier all-purpose e-Business by leveraging its existing brand and business model. The company provides services such as safe payment, it also provides business information containing descriptions, and reviews posted by sellers and buyers. The company manages the marketplace over the internet with its own distribution system. It does not have to spend a big amount on real estate because its aim is internet-based business which can reduce its inventory expenses. The resources and capabilities have made the company a world leader in the e-marketplace of business-to-business and customer-to-customer industries.
The founder, Jack Ma, is the driving force behind the company and is considered a valuable source that gives the company the competitive advantage. The strong brand name has made a place in the e-marketplace which was the reason behind the success of their first-mover advantage. The technical infrastructure of the group gives it a competitive advantage as well because it can open a new e-marketplace with different products easily due to the search technologies being easily reused.
The website is designed elegantly with easy navigation system and quick loading. The sales growth and cost efficiency success was contributed by Alibabas strategies, like trust, market, search, payment and tools, strategic partnership, compelling value and active advertising that were implemented by the company. Company culture is considered a problem for the company because many changes have to be made in order for the group to adapt and adjust to the variety of situations. It should no longer be considered as a start-up but a company moving from one culture to another because of its expansion and time in the industry. The financial difficulties brought by the international exposure is another challenge due to the exchange rates and different currencies that will eventually result in affecting the groups market money. The success of the group depends on the economic and political conditions.
By the end of 2020, China is expected to have more than 700 million online shoppers. There are current logistics network in China that was built before 1990 and might be inadequate in terms of keeping up with the growing e-commerce market. As a result, the company launched a huge logistics project teaming up with some private equity firms and other investors in 2013. It is expected from the network to be able to support the annual online sales of up to RMB 10 trillion and play a role in Alibabas expansion and growth
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