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This case addresses the vast effect that e-commerce has not only on B2B interactions, but also on the consumer side benefits. By the end of the case, you will be able to identify how popular goods can be tweaked to better fit a new ctlture and see how strategic flexibility can lead to success at the global level. Alibaba, the Chinese e-commerce giant, is extending its many tentacles into iaternational markets as part of its aspiration to become a global business. During 2019, Aliexpress, an c-commerce arm of Alibaba that sells products from Chinese retailers to customers in 150 countries, was setting up operations in ltaly, Russia, Spain, and Turkey to allow retailers from those countries to sell their goods to domestic and international customers. Alibaba's approach to building an international business is twofold: In developed e-commerce markets, the company is working to get international brands to sell to customers in China through Tmall, acting as a "gateway to China, according to the company; and in developing markets, the approach is to build or buy e-commerce marketplaces and acquire customers in those markets. The first piece of Alibaba's strategy - the "gateway to China" - is to get established international brands in developed markets to work with the marketplace by making it easier for those brands to appeal to and target Chinese customers. This has played out in a series of initiatives. The Tmall Luxury Pavilion, launched in 2017. offers a more high-level customer experience, only open to people Alibaba knows would be shopping for luxury brands. Since 2017, 80 brands, including Burberry, Valentino, Versace, and Stella MeCartney, have joined. Outside luxury category, Alibaba has positioned itself as a partner for mass brands to create new products better targeted to Chinese customers. The Tmall Innovation Center works with international brands like Unilever and Mars to offer research development and data resources to drive China-specific product development. For less-established brands in developed markets, there is Taobao Global. Taobao Global works with small and medium-sized brands without the resources to set up their own teams and operations in China, to help them get access to Alibaba customers by setting them up with merchants who will sell their products on Taobao, Alibaba's other consumer marketplace. To target developing e-commerce markets. Alibaba is adopting a "local-to-local" strategy. It's either acquiring or investing in companies that have existing links to local customers to introduce them to Chinese customers, or setting up bridges inhouse that make it easier for customers in other countries to shop through Alibaba, and businesses in other countries to sell there. AliExpress is a growing part of this strategy. It is a small to medium-sized business latform that sells products from retailers in China to customers internationally, and is now being expanded to invite similar sized sellers from other countries to expand from their own markets into those of other countries - except China, where they would sell through Tmall or Taobao. Alibaba.com, meanwhile, is the company's international B2B business, linking businesses to a network of suppliers while enabling otherwise expensive logistics like cross-border shipping. Most recently, Alibaba.com partnered with Office Depot in March 2019 to join forces on inventory and domestic shipping. Exhibit 1.5 shows Alibaba's sales share in China. Top 10 e-commerce retailers in China as of June 2018, by sales share Exhibit 1.5 Alibaba's success Source: Blazyte, 2018. Alibaba's success in e-commerce sets a precedent for the opportunity that e-commerce creates for multinational corporations all over the world, and connects cultures more than ever before through increased product availability and adaptability to different cultures. DISCUSSION QUESTIONS 1. How does Alibaba's success contribute to the rising opportunity presented by e-commerce? 2. Provide two examples of how Alibaba's services have brought countries closer together than ever before. 3. How do you see the relationship between Alibaba and its Western counterpart, Amazon