The paper "Alibaba in the Global E-commerce Market" Is a great example of a Business Assignment. Alibaba has proven to be among the largest eCommerce company in China (Doland, 2014). The company has made it easy for people and organizations to buy and sell things through the internet. The company over the years has offered business opportunities for both small and large enterprises to leverage online technology and compete successfully in the ever-changing business environment (Alibaba. com, 2014). The overall mission of the company is to build a strong business and profitable customer connection not only in China but across the world.
The company has a transaction of about US$248 billion in 2014 that was equal to the transaction of eBay and Amazon. com combined (Doland, 2014). Alibaba offers B2B, C2C, and B2C through internet portals. Lately, the company is expanding its operations outside China with an aim of being profitable across the nations (Alibaba. com, 2014). This paper will discuss how Alibaba was able to operate in China and acquired success. It will also analyze the possibility of replicating China’ s strategies to other countries in order to achieve a competitive advantage for Alibaba Corporation. Part A.
How Alibaba Group has made it easy to do business in China and hence achieved great success? Alibaba Group adapted the “ freemium” business model in China that worked successfully (Mourdoukoutas, 2014). This model was based on free services for the company’ s retailers who were interested in marketing their products and services. The “ freemium” business model was effective because; the country has a fragmented retail landscape (Pris, 2014). Chinese retail market is considered very diversified and fragmented and its economy is unbalanced as some people may earn as much as American’ s counterparts and others will earn less than $1000 a year (Mourdoukoutas, 2014).
In addition, there is no national retail chain in China (Mourdoukoutas, 2014. The existing retailers account for about 8.7% of the total retail goods sold to customers (Mourdoukoutas, 2014). The highly fragmented conditions suggest that retailers in China lack scale and skills to beat the challenges brought about by online retailers. Retailers in China are small in size; lack enough capital and manpower to be able to market their products online.
This has worked to the benefit of Alibaba Group and has increased its sales (Leong, 2013). In addition over the years, it has been proven that free is a strong strategy in China. Free service worked to the advantage of Alibaba since buyers and sellers chose to access free services offered by the company and forgo the charges from the competitors. The mission of Alibaba is to simplify the potential to do business everywhere. Before Alibaba was founded, the sales channels in China were insufficient for small and medium-sized enterprises (Alibabagroup. com, 2014).
The trade fairs and exhibitions that were conducted to launch and demonstrate new products were very costly for business enterprises. The method also could only reach a few customers. Nevertheless, many small and medium enterprises seek to grow as the Open Policy has open doors for investment in foreign countries (Walreven, 2009). What Alibaba has done is to offer China’ s SMEs a large market through eCommerce.
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