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Business and Finance

Analysis Of Alibaba as the Amazon of China

In this company’s case, the entry of Alibaba, a Chinese company, has been explained. Until the entry of Alibaba into the market, people believed that Amazon was the world’s largest retailer, but by making a sale of 485$ billion worth of goods, the company left everyone surprised, although the founder of Alibaba has undergone unlikely situations. Many researchers have termed Alibaba as the ‘Amazon of China.’ Currently, the company does not have a distribution center, but Ma’s vision seems to be growing with every success it has achieved in its business tenure. The company aims to double its revenue by 2020.

1. After analyzing Alibaba from the case study given, it was found that the founder of the company had a strong affiliation with his native country. Some unique Chinese values, along with the mix of Amazon.com and PayPal, are observed in the country. Since many people in China prefer traditional in-store shopping, hence being a digital relater, the company is providing a number of facilities to the native people by offering affordable products, in-time delivery at their doorsteps, and offering the exchange of products within a time span of 24 hours. Many competitors are unable to counter Alibaba since Ma is specifically providing online shopping exposure to struggling Chinese people. Besides this, more and more inventory options are given specifically to the people in China since the people in China are more demanding. Integrity, passion, and commitment, like the ones observed in Chinese History, are the specific set of values unique to the Chinese market.

2. Currently, Alibaba does not own any of the merchandise exchanged on its sites. However, in this case, the company needs to follow certain tactics that will help the company succeed throughout the world as well. The very first thing, in this case, is Jack’s vision of making the company a global success. This vision will be useful for future development as well. Other than this, the company needs to have an optimistic approach to all the changes being observed in the Chinese economy as well as in the economy outside of China’s market. A keen eye would be required in this case. Owning the merchandise products will not be the solution to this since; as per Ma, many sacrifices need to be made for the betterment of your own company. Focusing on the customers, developing the trust factor in all the exchanges made with the help of the company, hiring young and smart people who overview the business globally, and moving with a balance in the international market are some of the tactics that will help the company succeed.

3. Alibaba’s business model is a blend of Amazon.com, eBay, and PayPal, with a slight touch of the diverse culture of China, along with the higher market values of China. Connecting international buyers and manufacturers through a single platform is the basic purpose of the business of the company. Many people know that Alibaba is an online company, but its business model is not commonly understood. Alibaba offers business a business approach, while Amazon is more like a consumer online retailer. Amazon and eBay own their warehouses, while Alibaba, with no massive distribution centers, works without warehouses and inventories. The company has higher operating and profit margins as compared to Amazon. Taobao, despite being the largest shopping website in China, has ads that help Alibaba earn from Taobao. The service of Alipay, however, is like Paypal, but no dominance of state-run banks is observed in Alipay.

4. With the global speed down observed in the international market, the profit of Alibaba has been observed to decline. Keeping in view the current business model and values followed by the online retailer company, there are fewer chances for the company to excel in the global market. Although Jack has the vision of going deeper into China and expanding the company, Alibaba will face a whole different environment in its expansion. Like the love of Chinese people for their own brands and companies, people in other countries are also having this obsession. In this case, with the expansion of Alibaba in their countries, people will be expecting something much bigger and higher in context than the already existing companies in their countries, especially in the United States and the United Kingdom. For instance, buying an iPhone will be preferred more by the people of the US rather than buying a cell phone from any other online company.

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