Alibaba The ECommerce Giant in China Jianli Hu

Alibaba: The E-Commerce Giant in China Jianli Hu, Ph. D. Cerritos College International Education Week

What is Alibaba? • Founded by Jack Ma and 17 friends in Hangzhou, China in 1999 • Original vision: Create a 24/7 “matchmaker” B 2 B platform between foreign buyers and Chinese suppliers

Alibaba: Open Sesame

The Start of Taobao

e. Bay in China • Ten to 15 years from now, I think China can be e. Bay's largest market on a global basis…. We think China has tremendous longterm potential and we want to do everything we can to maintain our No. 1 position. — Meg Whitman, 2004 • e. Bay began its most aggressive campaigns to dominate the market, spent $100 million setting up its website in China. • As a defensive strategy, Jack Ma decided to launch Taobao. com. • e. Bay signed exclusive advertising rights with major portals with the intention of blocking advertisements from Taobao. • Alibaba fought back intelligently.

Alibaba vs. e. Bay

e. Bay Lost

How e. Bay Lost • e. Bay may be a shark in the ocean, but I am a crocodile in the Yangtze River. If we fight in the ocean, we lose—but if we fight in the river, we win. — Jack Ma • Taobao was free! • e. Bay moved its technology platform from China to the U. S. • Slow, unreliable internet • Tight censorship (“great firewall”) • “Universal e. Bay” couldn’t catch up China-specific features • Ali. Pay • Funds are put in an escrow so seller do not receive payment until buyer confirms receiving the goods.

The Growth of a Giant

Singles’ Day in China • Originated in Nanjing University in 1993 • Single people party together • Alibaba made it an online shopping festival • Store Promotions, Discounts, Hongbao

Further Growth of the Giant • Product Variety • 100, 000 cars sold in 24 hours on November 11, 2016 • Maserati launched the Levante in China by putting them online via Taobao. All 100 Levantes available were sold out in 18 seconds. • BMW offered 9. 8 per cent discounts off the 825, 000 yuan sticker price of its X 5 SUVs • Additional discounts after checking out • “New Retail” • “Smart stores” with tech features ranging from facial recognition-powered payment solutions and scan-and-deliver O 2 O shopping feature • https: //www. youtube. com/watch? v=i. IJr. H 1 HP 470 • https: //www. youtube. com/watch? v=XNt 18 b 5 h. OVE • Going Global