Name Bacha Mujeeb

Student No: 2270902002

Examination paper Logistics and supply chain

Submitted to: Zhanglinlin@btbu.edu.cn

Analysis of China ecommerce logistics Read the following material about the China Ecommerce
logistics, choose an existing or design a new e-commerce logistics model then analyze or illustrate its
operation management based what you learned in this course.

Introduction: The rapid increase in the development of information technology the living expectations of
people is changing, and their consumption pattern is too, this rapid changing in the information and
technology leading to the development of e-commerce. Different sorts of online websites offer their
products, thus providing many commodities for the consumers. The demand of the rapid development
of e-commerce on the logistics become bigger that’s why Customers are paying more and more attention
to delivery time, while the biggest challenge for the Chinese company is How to reach millions of people
in China without losing the quality of the product.

Transformation in logistics: If we at the transformation of logistics overtime firstly we started with very
simple. In 1970s Direct store replenishment by supplier or whole seller, gradually when the industry
mature, 1980s centralization of deliveries through retail distribution centers that was obviously not e-
commerce this was overall distribution, then in 1990s Rise of global sourcing, while in 2000s E-
commerce model involving parcel network hubs were created and from one-point things were
distributed called parcel hubs. Because in e-commerce you will go door to door delivery while in
industrial cargo you were go to factory warehouse or somewhere else.

Traditional retail supply chain: there were typically many stores like 50,80 stores across the country and
have warehouses then managers will promote the products to the warehouses and as a result it will
costly, compare to that e-commerce company this platform have a smaller number of warehouses like
amazon 20 plus stores in India now. As a result, there will be a reduction in the cost of inventory and a
reduction in the cost of warehouse lease etc. The second point is traditional retail supply chain is focus
on store replenishment while the E-commerce focus on home delivery.

The development of EC in China: Chinese economic development over the past decade has led to a
digital transformation and the rapid development of E-Commerce, becoming the largest E-commerce
market in the word.

Online shopping penetration rate in China. There has been a steady increase in the penetration rate of
online shopping. During COVID-19, there was a 5% jump from H1 2019 to H1 2020.

E-Commerce Business Models

E-commerce or electronic commerce business models allow individuals or companies to buy or sell
products or services over the internet and conducted over computers, smartphones, laptops, tablets,
and other smart devices. There are some most popular e-commerce business models such as Business to
Business (B2B), Business to Consumer (B2C), Consumer to Consumer (C2C), Consumer to Business (C2B),
Business to Government (B2G), Government to Business (G2B), Government to Citizen (G2C),
 E-Commerce Technologies
This twenty-first century is the golden age or revolutionary time for the e-commerce industry. Digital
payment systems, fast internet services, internet marketing, online transaction processing, electronic
data interchange, automated data management system, supply chain management, product tracking
system, digital delivery system, customer-friendly commerce services, etc., are the main greatest
elements of digital e-commerce technology. E-commerce technology has evolved from a specific area-
based trade to global trade. It involves time, labor, consumer choice, and financial development.

Payment Technology: Money has a definite and long economic evolution - commodity currency, metal
currency, credit currency, e-money, cryptocurrency, etc. In the E-Commerce industry, digital payment or
electronic payment systems take a new revolutionary shape.

Logistics Technology: Logistics technology is a specific system or process that determines exactly how
customers will receive their products from the retailer and the purpose of logistics is to plan, manage,
organize, and control them scientifically. Logistics activities include transportation, storage, loading and
unloading, packaging, circulation, distributing, 8 processing, and some related information activities.
Regional Logistics, Domestic Logistics, International Logistics are the classification of Logistics Technology.

Security Technology: E-commerce security technology is the most crucial part of the e-commerce
industry. E-commerce security is the protection of e-commerce assets from unauthorized access, use,
alteration, manipulation, or destruction. E-commerce industries must adhere to certain e-commerce
security guidelines to provide maximum security to consumers.

E-Commerce Platforms
Alibaba: To analyze the business design and model of Chinese logistics and e-commerce I choose Ali
baba according to the final paper examination.: Alibaba is the Chinese largest B2B e-commerce platform
owned by Alibaba Group. Alibaba serves millions of buyers and suppliers around the world with 40
different major categories and provides services to nearly 190+ countries and regions. Alibaba has
become the most popular destination for global wholesale trade.

Alibaba Overview
Alibaba (阿里巴巴) is one of the largest multinational technology companies in the world, specializes in
e-commerce, retail, internet, and technology. Alibaba was initially founded by Jack Ma on 28 June 1999
in his apartment in Hangzhou, China. Alibaba provides Business-to-Business (B2B), Business-to-
Consumer (B2C), Consumer-to-Consumer (C2C) sales services all over the world.

Alibaba's Business Model & Framework

Everyone Knows Alibaba is one of the biggest e-commerce companies in the world and it breaks world
IPO history. But how do Alibaba's business models work? In short, A business model is a company's core
strategy for profitably doing business or some core rules or terms that practice makes any company
profitable & create commercial value in the global market. Alibaba's Business Model is straightforward.
[10] Investopedia quote's that "Alibaba acts as a middleman between buyers and sellers online and
facilitates the sale of goods between the two parties through its extensive network of websites."
According to Alexa, globally Alibaba takes up slots on the list of top 10 most popular websites for its core
business strategy. [11] according to Business insider, Alibaba's record-breaking Singles Day generated $74
billion in 2020 and $38 billion in sales was the previous Singles Day in 2019. In June 2020, Alibaba had
757 million active users and that's more than twice the entire population of the USA. Mainly Alibaba
Business Model is divided into two parts: Local & Global. Here is the Chart of Alibaba's Business Model
and frameworks.
 Alibaba's Local E-commerce

Taobao (淘宝): Taobao is China's largest shopping website owned by Alibaba. Taobao is a Business-to-
Consumer (B2C) and Consumer-to-Consumer (C2C) platform where individuals and small business
owners sell their products through Taobao. Taobao doesn't charge transaction fees and it's totally free
for joining merchants. Taobao's main revenue source is advertising products on its platform and
collecting revenue from merchants.

TMall (天猫): TMall or Taobao Mall is the largest business-to-Consumer (B2C) retail platform in Asia
operated by Alibaba. TMall mainly offers branded products for middle-class society, and it has over 500+
million monthly active users. In China, Tmall became a reliable marketplace where people can purchase
authentic products. TMall charges merchants an annual fee and a commission fee on transactions. TMall
provided analytical tools to the sellers for showing the page views, impressions, ratings, visitors, which
help sellers in making decisions.

1688.com: 1688 is one of the biggest and most popular B2B trading wholesale e-commerce platforms for
the Chinese domestic market. Alibaba.com is the international version of 1688.com, which means
Alibaba dedicatedly works for the international market, and 1688 works for the domestic market. In
1688 platforms, all suppliers need to pay an annual membership fee to 1688. 1688 is a cheaper source
for all kinds of products such as technology, electronics, digital products, home appliances, clothes,
accessories, sports, beauty items, and so on.

Alibaba's Cloud and Infrastructure: Alibaba is expanding a range of high-performance cloud products
and infrastructure including large-scale computing, storage resources, enterprise applications, artificial
intelligence, media services, container & middleware, developer services, security & analytics, IOT, big
data processing, and so on for users around the world.
Alibaba's Entertainment & Media: Alibaba has long dominated China's entertainment and media sectors.
It includes newspapers, digital and broadcast media, social-networking platforms, video-streaming sites,
film production companies, advertising agencies, and so on. Alibaba's core digital media and
entertainment unit such as video streaming platform Youku Tudou, music platform Alibaba Music,
Alibaba Pictures movie division, Ali Sports, KTPlay, AliTrip, and the most popular Hong-Kong based
newspaper The South China Morning Post (SCMP) is also owned by Alibaba Group.

Alibaba's Revenue Model

Alibaba has several revenue-generating sources, including domestic commerce retail and wholesale
business, global commerce retail and wholesale business, logistics services, consumer services, cloud
computing, digital media and entertainment, and other initiatives. 17 Alibaba generates revenue through
online marketing, advertisement, commissions, storefront fees, membership fees, payment services like
Alipay, etc. [12] According to Statista, In the third quarter of 2021, Alibaba Group generated 63 percent
of revenues through their domestic commerce retail business and global e-commerce retail sales
accounted for five percent of total revenues.
The challenges for Ali baba:
With geopolitical trade tensions and the COVID-19 pandemic disrupting supply chains and taking a
financial toll on suppliers around the world, Alibaba. Om’s small-and-medium-sized (SME) suppliers
faced record high working capital, cost fluctuations and counter-party risk.

To mitigate the challenges faced by suppliers, Alibaba.com has been exploring the means to track
incoming cross-border payments. The lack of visibility over incoming payments presented several
challenges for Alibaba.com and its suppliers including:

 Lack of certainty over whether payments have been made, impacting the ability of suppliers to
forecast liquidity, and working capital.
 Inefficient trading processes as the material purchasing and manufacturing of goods typically
happen only after payments are received.
 Potential disputes over FX and bank fees due to the lack of clarity on deductions.
 The solution: Alibaba.com turned to banking provider J.P. Morgan for help, and in May 2020
successfully implemented SWIFT.
 GPI for Corporates (g4C) Inbound Tracking service – a market leading standardized and
automated messaging service that tracks incoming payments for corporates.
 The solution efficiently tracks the incoming payments made to the 150,000 suppliers on Alibaba.
Om’s global trading platform. This enables them to detect and monitor inbound transactions in
real time before the proceeds are credited to their bank accounts, dramatically improving
certainty of payment, the efficiency of the order cycles, and the experience of both the suppliers
and their buyers.
 The Inbound Tracking tool can trace the key hops along the path of a payment the moment it
enters the SWIFT network, including when it’s been initiated, delivered, and credited to the
beneficiary bank, if it has been held during intermediary processing for more than six hours, and
if it has been rejected. These status updates are relayed from SWIFT to J.P. Morgan in real time
leveraging application programming interface (API) technology, where the bank in turn notifies
Alibaba.com through a second set of APIs. Alibaba.com will then extend the same information to
its suppliers.
The above graph has taken from the google to understand better about improvement of Ali baba
logistics and supply chain so that was all about the model and operation management of Alibaba.com.

Thankyou