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Case 2 Case 17: Alibaba and Global Supply Chains Summary This case explores supply chain management at Alibaba, the world's largest e-commerce platform. Founded in 1999, Alibaba operates in 190 countries, has revenues of $23 billion, and 51,000 employees. The Chinese giant has established goals of facilitating $1 trillion in product sales annually and reaching 2 billion consumers around the world. Alibaba already handles more than 80 percent of China's e-commerce business. One of the biggest tests of Alibaba's supply chain capacity occurs each year on November 1 1, the date of a Chinese holiday. With sales of more than $20 billion, the holiday is similar to Black Friday and Cyber Monday combined for Alibaba. Alibaba's presence in China goes beyond its online sales though. The company is also responsible for the creation of some 30 million jobs in the country outside of Alibaba itself. In addition, founder Jack Ma has created 1 million jobs in the United States. Alibaba's success comes as a result of a focus on its differentiation strategy, partner connections, buyer partnerships, mobile technology, and large-scale product selection. The company efficiently brings together buyers and sellers, offering buyer protection to encourage demand. So far, the strategy seems to be working. Sales at Alibaba dwarf those at competitor Amazon. Indeed, 15 billion products are sold every year via Alibaba and 15 million packages are shipped as compared to just 5 billion products sold on Amazon with 3 million packages being shipped. Going forward, the company has its sights on expanding its presence outside of China. Discussion Questions 1. According to Alibaba's promotional efforts and strategic initiatives, Alibaba is on a path to realizing its vision of facilitating $1 trillion in product sales annually as it also pursues a goal of reaching 2 billion consumers. It is already the world's largest e-commerce platform. Can one company really achieve $1 trillion in sales and reach 2 billion of the world's 7 billion people? 2. Each year, Alibaba handles more than 80 percent of China's e-commerce business, and now operates in 190 countries (only 196 countries and 61 territories exist in the world). Moving forward, the vision for Alibaba sounds simple: Bring in non-Chinese brands to the Chinese market and expand products to customers outside of China's borders. Do you think this global strategy is viable? 3. As mentioned, Alibaba's immense number of sales and shipments puts tremendous pressure on its global supply chains. Do you think its supply chains can continuously facilitate the increased demand that its customers place on the global supply chain systems? Why or why not
