After reading this case I learned about Alibaba and how they are the world’s largest online business to business trading platform. The history of the company goes back to 1999 where Jacky Ma founded it in Hangzhou at eastern China. The purpose behind the company is to bring together importers and exporters from around the world.
There are many factors that led to Alibaba sustaining its leadership position in the Chinese e-Commerce like low cost, access to many suppliers, lower risks of fraud, listings and searches are free as well as a few more. These factors all kind of add their own spin to the market and appeal to a bigger audience because of all of the benefits offered. For example, if you aren’t good at promoting that’s ok because with the data you input, Alibaba will go ahead and organize and manage that part for you. This feature is a life saver to many people and without it they would have to take an extra step to get the task done themselves. It contains lots of other features that are more user friendly like web-mail, search engines, e-shop and so much more. Alibaba is pretty organized when it comes to what it offers and how the users goes ahead navigating the system. Even if you aren’t the most technical person, they have a section where they would assist you navigate around as well as teach beginners about the global trade on line system internet business. Another plus is that they have enhanced security and content delivery speed, which when dealing with an online trading system you’re basically putting yourself out there over the web and want to at least feel safe doing so.
Taobao was launched in May 2003 and was China’s most popular C2C trading site. Alibaba group reorganized Taobao into “three separate companies which included Taobao market place, Taobao Mail, and eTao to capture Chinese E-commerce consumer opportunities.” Taobao was originally opened as a rival to eBay each net and ended up being a huge success. Since Taobao already held a dominant position in B2B they thought there knowledge would help them topple eBay and also take over the C2C market. Turned out that Taobao soon ended up actually dominating the C2C market after a while. The reason that Taobao was successful in taking over the second market as well was their understanding of the Chinese background. The leverage for them began with the knowledge they had of China.
I don’t think that Alibaba’s decision to acquire its stake in yahool would not help it gain some momentum. The reason I say that is because the company was concentrated into online trading. For Alibaba to even attempt to compete with Yahoo they would first have to start in the search industry which at the moment they had no idea or experience in. A search engine like yahoo and the online trading that Alibaba was involved in were to completely different things. The only search engine knowledge that Alibaba had, was in the search engines of their online trading, so basically only within their own program. In other words the only search engine knowledge they had was with a very small search engine compared to the capability of Yahoo, which is why I say they would not be able to gain some momentum in the Chinese web search market.
After examining Alibaba’s business model I would say that it is sustainable. Alibaba always understood what the customers wanted which is what led them to providing Alipay, Taobao, Yahoo China, Alisoft and Alimama. Although they started off as a middle man for buyers and sellers, they branched off over time after realizing that there customers were looking for more than what they were offering their customers. Since they noticed that these things they noticed barely existed, they want ahead and would start their own but with the intention of topping whoever is on top of the market at the moment. They were very successful as a company and even when they began to branch off to their little ideas that became huge. To expand globally they need to start up something like Alibaba all around the world, and when they study their audience enough they can then began to start expanding as they did in China where they ended up becoming so successful. The only difference is that there are places that have lots of options already out there so itll take a lot more work than they did in China to be on top.