BACHELOR IN BUSINESS ADMINISTRATION

SEMESTER 3

International Business Management

Final Project

Prepared for:
Lecturer’s name:

Prepared by:
Student’s Name: – ID No:
 1. Alibaba Company Description

Alibaba was founded on 4 April 1999 by Jack Ma as a B2B e-commerce site and soon branched
out into B2C markets and various other fields.

Alibaba Group Holding Ltd. engages in providing online and mobile marketplaces in retail and
wholesale trade. It operates through the following business segments: Core Commerce; Cloud
Computing; Digital Media and Entertainment; and Innovation Initiatives and Others. The Core
Commerce segment comprises of platforms operating in retail and wholesale.

The Cloud Computing segment consists of Alibaba Cloud, which offers elastic computing,
database, storage and content delivery network, large scale computing, security, management
and application, big data analytics, a machine learning platform, and other services provide for
enterprises of different sizes across various industries. The Digital Media and Entertainment
segment relates to the Youko Tudou and UC Browser business.

The Innovation Initiatives and Others segment includes businesses such as AutoNavi, DingTalk,
Tmall Genie, and others. The company was founded by Chung Tsai and Yun Ma on June 28,
1999 and is headquartered in Hangzhou, China.

2. Alibaba Product and services

It connects Chinese and overseas suppliers to overseas wholesale buyers, who are typically trade
agents, wholesalers, retailers, manufacturers and SMEs engaged in the import and export
business, and provides sourcing, online transaction, digital marketing, digital supply chain
fulfillment and financial services to them.

3. Alibaba Company History until Current Status

Alibaba Group was established in 1999 by 18 people led by Jack Ma, a former English teacher
from Hangzhou, China. From the outset, the company’s founders shared a belief that the Internet
would level the playing field by enabling small enterprises to leverage innovation and
technology to grow and compete more effectively in the domestic and global economies.

Since launching its first website helping small Chinese exporters, manufacturers and
entrepreneurs to sell internationally, Alibaba Group has grown into a global leader in online and
mobile commerce. Today the company and its related companies operate leading wholesale and
retail online marketplaces as well as businesses in cloud computing, digital media and
entertainment, innovation initiatives and others.

4. Alibaba headquarters and office locations

Alibaba is headquartered in Hangzhou Shi, China and has 14 office locations across 12 countries.

All Alibaba Locations
Hangzhou Shi (HQ) China
 969 Wenyi W Rd, Yuhang Qu Hangzhou Shi
 Jianghui Rd, Binjiang Qu China
 San Mateo, CA United States 400 S El Camino Real #400
 Melbourne Australia Level 2, 411 Collins Street,
 Paris France 6 Rue de Paradis 6th floor
 München Germany 1st Floor 8 Viktualienmarkt
 Hong Kong Hong Kong 26/F Tower One, Times Square 1 Matheson Street, Causeway
Bay
 Mumbai India inspire BKC Main Road, G Block BKC, Bandra Kurla Complex
 Milano Italy 13 Corso Europa
 Tokyo Japan 27F Kyobashi Edogrand 2-2-1 Kyobashi, Chuo-ku
 Amsterdam Netherlands 450 Herengracht
 Taipei Taiwan, Province of China 11/F, No, No. 5, Nanjing E Rd, Neihu District
 London United Kingdom 5 Southampton St
 London United Kingdom 8th Floor, Millbank Tower, 21-24 Millbank, Westminster

5. Mode that Alibaba Uses to expand its business into another country

A big part of Alibaba globalization strategy is connecting brands and small businesses from all
over the world directly to the Chinese consumer,” Evans said during the NRF Show in January.
“China is a massive consumer market and an attractive growth opportunity for many businesses
today and in the future. Many brands globally have not properly understood the China
opportunity.”
His job is to solidify Alibaba as the leading e-commerce company globally. In understanding
Alibaba’s global ambitions, there are a lot of players, moving parts and priorities to unpack.

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
them 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-touch customer experience only
open to people Alibaba knows would be shopping for luxury brands. Since, 80 brands including
Burberry, Valentino, Versace and Stella McCartney have joined. Outside of the 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.

And for less established brands in developed markets, there’s Taobao Global. Taobao Global
works with small- and medium-sized brands that don’t have 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 taking a “local to local” strategy: It’s
either acquiring or investing companies that have existing tethers to local customers to introduce
them to China’s local customers, or setting up bridges in-house that make it easier for customers
in other countries to shop Alibaba, and businesses in other countries to sell there.

AliExpress is a growing part of this strategy: It’s a small- to medium-sized business platform
that sells products from retailers in China to customers internationally, now being expanded to
invite similar sized sellers from international regions to sell in their own markets as well as 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 to join forces on inventory and domestic
shipping.
Alibaba last year bought Lazada, an online marketplace selling to customers in Southeast Asia,
investing a total of $4 billion into the company and posting an Alibaba executive into the CEO
position last year. It also has a controlling stake in Paytm, an Indian e-commerce payments
company, and a minority stake in Turkey’s leading e-commerce platform, Trendyol.

So, as the strategy boils down to two key initiatives — win over the big players and buy up the
smaller ones — more brands, sellers and customers will be pulled into Alibaba’s orbit, either
directly or indirectly. As Amazon struggles to get footing in regions like China and India,
Alibaba is building a two-way network of business in and out of China.

“Whereas Amazon builds moats, Alibaba builds bridges,” Evans said.

6. Alibaba company Target Market

Alibaba is a B2B website catering to the needs of suppliers and buyers. The target audience of
the website is always some other company or its employees.
Alibaba offers a wholesale platform for small buyers on the global site seeking fast shipment of
small quantities of goods. Besides this, it also offers business management software and Internet
infrastructure services targeting businesses across China.

Target Market
Alibaba target two marketplaces which include the global marketplace based in English
Language that cater to international exporters and importers and the China marketplaces whose
aim is to focus on suppliers and buyers trading locally in China.

 China is by far the largest Internet marketplace in the world with double the size of U.S
market. There are 560 million Internet users spending 20 hours a week online. Notably,
China is skipping with the traditional retailing and in favor of the e-retailing.

 These two marketplaces are collectively the most- visited B2B website on the Internet.
Alibaba also target on small and medium-sized private enterprises and individual
businessmen, which have great potential in succeeding in the e-trade.

 In order to get a huge portion of market share, Alibaba has localized the e-trade services
by developing websites that locate to different languages and modify their design and
layouts, which suits the local cultural in overseas.
  For example, English website is target to buyers from oversea in general while Chinese
website targets China traders and Japanese website aims at the Japanese market. Alibaba
has also creates Korean and Spanish language website in order to expand its market in
different regions and to achieve highest profit and goals. All these play an
important role in Alibaba’s global success

7. Promotion Strategy

Alibaba expands its new market through freebies. They offer freebies to attract more clients and
customer to use Alibaba as an online marketing platform. For example, Alisoft is giving out free
copies of Shopkeeper TM, a package that consist of accounting, stock management, and
consumer resource management tools for registered users.

 The company also promotes its services via internet promotion strategy such as
public relations, direct marketing, and discounts for certain items during special
days such as festivals, media advertising and sponsoring of events to attract
awareness of Alibaba.

Information Technology
In the e-trading marketplace, Alibaba provides a communication platform for trading partner to
communicate in real time through Alibaba’s TradeManager tool. Alibaba
also has a team of dedicated experts that are always motivated to search for better and innovative
technology platforms to catch up with the changing of the generations.

 Alibaba is continuously trying to develop highly complex system to improve the online
transaction for the consumers by setting ample security actions. For example, Trustpass
has given online customers a strong trust and security of online transactions. Moreover,
Alibaba also has the latest technology for anti-fraud and anti-spam that is able to detect
any fraudulent activities and
filter unwanted messages. Alibaba’s IT team is constantly
working on improving the accuracy and protection of their customer because customers
are their main source of the entire business.

Expected Market Growth

Alibaba is a “Collective Entrepreneurship” between company and thousands of merchants that
join this network. It offers the platform whereas the merchants provide the products. The Alibaba
model, which relies on profits sharing rather than listing fees has attracted many merchants to
participate in the network. The larger the network is, the greater the benefits for both company
and merchants as it draw a large volume of sale.

 Likewise, Alibaba has a good relationship with the Chinese government, which is
important in China where government acts as a gatekeeper of the economy. Alibaba has
been chosen by the government as one of the five companies to enter the Internet banking
where banks are owned by the government

 Alibaba has also taken over Yahoo in China and thus Yahoo is the largest shareholder of
Alibaba. The two companies will work together in an exclusive partnership to grow
Yahoo brand in China.

Future Strategic Actions

Alibaba’s future strategic actions include sustaining domestic Chinese market. It is essential for
Alibaba to maintain its domestic market first in order to success globally. Without China market,
Alibaba would not be able to survive without the economics of scale.

Alibaba is attempting to expand its business in developing countries such as India, which is the
second fastest developing country after China. India has significant potential growth and profit.
Besides that, Alibaba is also enhancing its technology and R&D development for advance
Internet infrastructure to give the fastest speed and accuracy for online marketing (You Fei,
2012). Meanwhile, Alibaba has been trying to invest in smart
phone users.

8. 3 competitors of Alibaba

JD.

Formally 360buy, JD (Jingdong) is another Chinese ecommerce business. This Fortune Global
500 Company is a direct competitor of Tmall, which is run by Alibaba.

At JD.com, consumers can buy a wide selection of products at an affordable rate. The website
also has a “buy in bulk” category, which is another reason why it goes head-to-head with
Alibaba.
Joybuy.com is also an affiliate of JD. This site is in English and ships to more than 200 countries
worldwide. It also offers 24/7 customer service and 30-day returns.

Jingdong has more than 305 million active customers. Its quarterly active customer accounts are
increasing at a 22% year-over-year growth rate.

eBay.

Everyone is familiar with eBay. This website was a pioneer in consumer-to-consumer selling

through an online marketplace. Over time, eBay has evolved and become more than just a way
for consumers to buy and sell their own new or used merchandise.

Today, eBay is used for B2C sales in addition to its traditional C2C model.

In terms of marketplace website visits, eBay is second to Amazon, with just under 20% of the
market share.

The site traffic to eBay is impressive. It’s nearly double Walmart, and we’ve already established
how successful Walmart is in the online space.

With the ability to bid on products and the unique way for buyers and sellers to connect online,
eBay is a top competitor to Amazon.

Flipkart.

Flipkart is a newer ecommerce company compared to some of the other competitors on our list.
This Indian-based ecommerce platform was founded in 2007 and quickly became the largest
online retailer in India.

In 2018, Walmart acquired 77% of Flipkart’s shares, valuing the company at $22 billion.

With Walmart controlling the majority stake of Flipkart, there’s no telling where the company
can go from here.

More than 100 million users are registered on Flipkart. The platform’s user-friendly design,
mobile app, and customer service make it one of the up-and-coming Amazon competitors. With
such a wide range of products offered through Flipkart, the company is poised for continued
success in the coming years.

9. Proposal for Alibaba / AliExpress

Retail pricing transparency

Alibaba is increasingly competing on service and convenience, not just price. But the company’s
constant experimentation with pricing schemes and offers is beginning to create confusion about
exactly how good the company’s prices really are.

Alibaba has the ability, if not the desire, to make its price history transparent, letting buyers see
how much others are paying for a given product, in both real time and over time. Heck, Alibaba
has the smarts and reach to show accurate data on how much the item is selling for elsewhere.
That would create a level of customer trust that could only enhance the company’s sales.