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Alibaba: Competing in China and Beyond

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Stephanie Perez

on 4 September 2013

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Transcript of Alibaba: Competing in China and Beyond

Alibaba: Competing in China and Beyond
Objectives
Background History
Jack Ma
Chinese born entrepreneur founded an e commerce website known as
Alibaba

1999 -
Alibaba
became an official computer company

Business Models
Success Strategies
Knowledge Theory - Alibaba adapted to changing business environments and competition
Detailed understanding of the culture and target market
Chinese hesitance to online purchases - Jack Test
Chinese resistance to online payments
Acquisition and partnerships with relevant companies and hiring of expertise
Initial Public Offering in October 2007 - raising $1.5USB
Challenges
Dotcom Bubble Burst
Questions and Quiz
Business to Business
- Launched in 1999
- Concentrated on connecting buyers and suppliers
- Suppliers were able to list their products on websites and buyers post their requests through emails and offline messages
- Alibaba China and Alibaba International

Business to Customer
- In response to foreign competitors such as eBay
- Launch of Taobao in May 2003
Consumer to Consumer
- Taobao was a trading platform that allowed free listings, in comparison to its rival eBay.
- Implemented aggressive promotional strategies to compete with eBay - billboard ads in major cities and ads on websites.
- additional features such as email, online chat and calling before purchase.
- Taobao 9% and eBay 90% in first quarter of 2004
- Taobao 41% and eBay 53% in fourth quarter of 2004

Business Portfolios
Alibaba China -
1999, B2B trade in China
Alibaba International -
1999, B2B trade internationally
Taobao -
May 2003, C2C, competed against eBay
AliPay -
2004, online payment solution for safe and easy transactions
Yahoo! China -
China's 3rd most popular search engine after Baidu and Google
Alisoft -
Jan, 2007 - software services catered to SME's in China
Alimama -
Nov 2007, an online advertising exchange company. Allowed advertisers to trade inventory online.
Culture
Confucianism is the most influential thought that forms the foundation of the Chinese culture
What Alibaba is about...
History
Business Portfolios
Culture
Business Models
Success Strategies
Challenges
Future Strategies
Quiz

Mid 1990’s saw China fall into the internet boom
leading to


Ma’s creation of ecommerce trading site
= Alibaba


Connecting small to medium enterprises globally

Presented by Andrew Formosa, Stephanie Perez and Natasha Raina
1990’s - 2000’s

-credit cards were limited.

Alibaba allowed for :
-suppliers to list their products

-financial agreements however were main through private emails.

-no fees charged.

History continued...
Alibaba accounts for 60% of parcel deliveries in China

Recommendation for Alibaba:

Financial and market analysts should extract valuable information on
trends of spending aiding in product/service development
=
Creating major competitive advantage


China have 1.3 billion people with only 42% internet users

Alibaba must use their retained information on consumer spending and
consumer and business credit , to draw in the untapped markets


Threats =
EBay
Reaction from Ma


Ma famously once coined the idea; “EBay may be a shark in the ocean,
but I am a crocodile in the Yangzi River. If we fight in the ocean, we lose;
but if we fight in the river, we win’ (Berkeley 2013).


Alibaba will continue to grow and exceed the attempts of new entrants.

- Continue to globalise beyond China


In the Future
Occured in March 2000
Majority of Dotcom companies filed bankruptcy as they could not withstand the sharp fall in revenues from Internet advertising.
Competition in the E-Commerce Market
Global Sources had an employee base of 1,600 with sales departments spaced internationally building its supplier community
In 2003, Ebay had a 79% market share in the Chinese online auction
Baidu is the leading online search engine in China
Alibaba acquired Yahoo! in 2005 to gain a foothold in the Web search market.
However, despite the venture Baidu is still China’s leading search engine with a market share of 46.5% in comparison to Yahoo! China placing third at 15.6%
Threat in the Web-Search Engine Market
Individualism V.s
Collectivism
Power Distance
Western countries (U.S) score the highest in individualism, whereas Chinese cultures score lower.
Alibaba is able to understand the highly collective Chinese market and views individualistic organisations such as U.S owned Google as being no threat
Leadership in Western countries are often associated with domination or authoritarianism, whereas in Asian countries have a focus on participative and collective decision makings
This theory largely contributes to how Alibaba does business and creates strategies.
Good luck!!
Welcome!
Alibaba Graduates of 2014!!!!
Full transcript