Students: Hoang Thi Minh Chau, Ta Thi Thao Linh

Class: 2K-19

Instructor: Thuong Nguyen

TABLE OF CONTENTS
1. Introduction 2
2. Body 2
2.1. Background of Alibaba Group 2
2.2. Taobao’s foundation and its effects3
2.3. Alibaba’s key to succeed 4
2.4. Lesson4
3. Conclusion 5
REFERENCE 6
 Alibaba and the success of Taobao
1. Introduction

E-commerce is a service that is widely known and attracts people’s attention all over
the world. It provides sales services between consumers and consumers, businesses to
consumers and businesses with businesses selling services through the portal. Alibaba is one
of the greatest and the most successful group that is expert in e-commerce in China. Jack Ma
is the founder of Alibaba, a multinational technology corporation. Jack Ma is a highly
influential Chinese businessman, investor, actor, philanthropist. Alibaba is one of the world's
largest trading platforms and a leading provider of online marketing services for exporters
and importers (bnews.vn, To Uyen, 2016). This paper will discuss the background, the
development as well as the success of Alibaba along with giving the lessons for the future.

2. Body

2.1. Background

2.1.1. What is Alibaba?

Alibaba Group was established in 1999 by Jack Ma, a former English teacher from
Hangzhou, China who scraped together $80,000 from 80 investors to start an online
marketplace for Chinese companies (Bloomberg.com, Lulu Yilun Chen, 2017). He became
the richest man in China and his asset value is estimated at up to $47 billion
(Bloomberg.com, Lulu Yilun Chen, 2017). Ma connected with Jerry Yang who is the founder
of Yahoo! Inc. In 2005, Alibaba and Yahoo! announced an agreement on establishing a long-
term strategic partner in China (Bloomberg.com, Lulu Yilun Chen, 2017). Yahoo paid $1
billion for a 40 percent stake in Alibaba in 2005 (Bloomberg.com, Lulu Yilun Chen, 2017).
After that, Ma and Jerry Yang shared a belief that the Internet would equal opportunities by
allowing small enterprises to take innovation and technology as a platform to grow and
compete in the domestic and global economies. Jack Ma with 17 people created website
Alibaba.com on which is an expert in export-import trade. taobao.com, tmall.com are famous
websites of Alibaba and are C2C (Customer to Customer) e-commerce model.

2.1.2. Alibaba Business Model

The business model of Alibaba focused on trade between businesses. Alibaba is a

platform for suppliers to sell a number of products at wholesale prices to small or medium-
sized enterprises all over the world and then they resell for a profit (freedough.com, Aashish
Pahwa, 2019).

2.1.3. Growth

Starting a business in Hangzhou in 1999 by Jack Ma and 17 other people, the business
model of Alibaba focused on trade between businesses. Alibaba is a platform for suppliers to
sell a number of products at wholesale prices to small or medium-sized enterprises all over
the world and then they resell for a profit
 In the e-commerce segment, Alibaba's sales increased 49% to US $3.5 billion - the
fastest growth since the initial public offering (IPO) in September 2014. The success of IPO
in New York in 2014 became the largest IPO business transaction in history and with an
estimated net worth of $231 billion (bnews.vn, To Uyen, 2016).

On March 31, 2016, Alibaba's total traded goods value was estimated at up to $489
billion, surpassing Wal-Mart's $ 482.1 billion in the same period. Catching up with the
development trend of society together with the need for online shopping to save time, cost
and more incentives, Alibaba gradually became a giant with more than 35,000 employees,
providing from 70 -80% of all goods sold online to the entire Chinese people (bnews.vn, To
Uyen, 2016)

The Alibaba website now has more than 4,830,000 registered members from over 240
different countries (bnews.vn, To Uyen, 2016). Owning 3 main e-commerce sites (Taobao,
Tmall and Alibaba.com), Alibaba not only dominates the field of e-commerce in China, but is
also on the way to attack the world of Internet finance and cloud computing and logistic
(bnews.vn, To Uyen, 2016).

2.1.4. The aim in the future

In the future, Alibaba aims to expand its impacts on more technological aspects in the
Chinese and global markets. Jack Ma's empire has dominated payment, food delivery, cloud
computing, and has a market capitalization of more than $ 460 billion (cnbc.com, Arjun
Kharpal, 2019).

2.2. Alibaba’s keys to succeed

It is undoubted to say that Alibaba ‘s success is a result of three elements which are
the right circumstances, good market field and human resources.

a. Right circumstances:

Alibaba was founded in 1996 when there are all the difficulties and benefits of
approaching the young company. One of the difficulties for Alibaba is that the market at that
time was not too rich and full of resources for a new technology like Alibaba. However, the
problems sometimes became the advantages. The company was like an initiator of the
Chinese online market. Therefore, Alibaba hardly had any competitors, especially in the
Chinese area. This condition gave the company more opportunities and supports for its
development.

b. Good conditions:

China has one of the biggest and fastest-growing e-commerce market of the world. Up
to some first months of 2020, the Chinese online market witnessed the revenue of about one
million US dollars and nearly 900 million users (“eCommerce”, 2020)Furthermore, the
Chinese government has enacted laws to assist their domestic business. In addition, the
 technological field and Internet that Alibaba aimed at from the beginning of the foundation
have been growing rapidly in the current Industrial Revolution 4.0. Consequently, companies
like Alibaba have chances to maintain and expand its influence in the market.

c. Best human efforts:

Even if the circumstances and conditions came to the company, Alibaba would be
unable to succeed without the human attempts. The aims and vision of Alibaba executives
like Jack Ma are much bigger when they target not only the market in China but also
worldwide. As a result, Alibaba group now has seven companies dominating every field of e-
commerce and technology and kept on expanding.

2.4. Lesson

Alibaba's success is such a good example for all the companies and governments in
the world. In order to maintain development in this competitive market field, the company
should have a clear knowledge of the market. After that, Alibaba will set up a clear
development orientation, long-term strategic vision to seek the chance of success. Besides,
the government ought to enact laws and supply supports to companies as essential help.

3. Conclusion

To sum up, Alibaba has enhanced its influence and maintained the top position in the
global market for 20 years. Each company has different factors that affect its success;
however, the Alibaba group ‘s business has shown a lesson to all the companies joining in the
e-commerce. It is also noticeable that e-commerce is an attractive field for investment.
Nevertheless, businessmen should be careful when this developing market now has more
competitors to face than in the past and one of the giants is Alibaba.
 REFERENCE
(2020). eCommerce. Retrieved from
https://www.statista.com/outlook/243/117/ecommerce/china#market-globalRevenue

Aashish Pahwa (2019). Alibaba Business Model/ How does Alibaba make money?.
Retrieved from https://www.feedough.com/alibaba-business-model-how-does-alibaba-make-
money/

Arjun Kharpal (2019). Cloud Computing could be the “next frontier” for Alibaba.
Retrieved from https://www.cnbc.com/2019/09/10/alibaba-cloud-business-may-follow-
amazons-path-to-profitability.html?fbclid=IwAR2D9KcVWdV_Luul48_bFDStsu7kOIQ6l-
8t4oFE_XO02FBw751WFvrDOI8

Gentlemen. (2016). Analyze of the Marketing Strategy of Alibaba in China. Retrieved

from https://ecommercechinaagency.com/top-marketing-strategies-to-success-with-alibaba/

Lulu Yilun Chen (2017). Quick Take Alibaba. Retrieved from

https://www.bloomberg.com/quicktake/alibaba

To Uyen. (2016). Alibaba tren con duong phat trien nen tang thuong mai dien tu toan
cau. Retrieved from https://bnews.vn/alibaba-tren-con-duo-ng-phat-trien-nen-tang-thuong-
mai-dien-tu-toan-cau/25871.html