Alibaba

What is Alibaba.com? An Insight into the e-commerce giant

Founded in 1999, by a group of 17 students led by Jack Ma, the Alibaba group today stands as the largest e-commerce...

Written by Masooma Asif · 3 min read >

Founded in 1999, by a group of 17 students led by Jack Ma, the Alibaba group today stands as the largest e-commerce and retailing company. Hosting millions of retailers and customers every day, Alibaba captures almost 58% of shares of China’s online retailing market, while targeting over 190 countries. 

Alibaba provides online retailing services in a broad range: business to business (B2B), consumer to consumer (C2C), and business to consumer (B2C) services, and even electronic payments and cloud computing services. 

This article will be providing deeper insight into all the information you need to have about the group’s flagship site, Alibaba.com, starting from what Alibaba.com exactly is, who should be using Alibaba.com, the finances as well as the market competition that persists. 

What is Alibaba.com?

The flagship site, Alibaba.com, is a business to business (B2B) platform. This site connects manufacturers from different countries to businesses all over the world. While merchants can list their products for free, paying a fee allows them to enjoy greater advantages. 

Other sites

Apart from Alibaba.com, the Alibaba group has further divided its market places into three sites:

Taobao

Connects consumers to consumers (C2C). It serves as a platform for small businesses and individuals to set up their online stores. 

Tmall

Also known as the Amazon of China, connects international businesses to Chinese consumers. Its target market is said to be the Chinese middle class focusing on larger companies and multinational brands.

AliExpress

Connects businesses to international consumers, allowing consumers to buy a product at wholesale prices directly from the factory.

Who is Alibaba.com for?

Providing a variety of services, Alibaba.com is the go-to website for consumers, sellers, wholesale manufacturers, drop shippers, and private label manufacturers. 

Each of the above-mentioned market sites provides a platform for different stakeholders to sell and buy different products. 

Alibaba.com in particular provides an excellent opportunity for manufactures to connect with international business. This allows the retailer to get access to a variety of unique products while conveniently finding the most interested and well-rewarding buyer.
Additionally, the site is also popular for offering small business-friendly costs which help attract more customers. 

What are the challenges faced by Alibaba.com?

When targeting a global audience as a part of international retailing, the language barrier acts as a challenge. However, Alibaba.com caters to this problem by having multi-language sites to facilitate the non-English speaking buyers and suppliers. A few of the supported languages include Spanish, French, Italian, Arabic, Korean, Russian, and more.

The risk of scam in the market place exists as well. There is the possibility of counterfeit items being supplied. Problems of extended shipping periods and lack of quality control also result in customer dissatisfaction.  

To avoid such scams, a buyer must check the Suppliers Database. The supplier base gives information about where the suppliers have worked in the past for example Amazon, Walmart, Target. It also shows the business activity of the supplier, for example, the more business a supplier has done in the US, the more reliable they are. Thus, this information provided through the database helps the buyer determine the credibility of the supplier, and helps decide whether to connect with them or not.

What is the market capitalization of the Alibaba group?

Alibaba enjoys the position of being considered the most valuable Asian online retailing company with a market capitalization of over $500bn. Moreover, globally Forbes ranked it as 11th among the top 100 digital companies.

Statistics show that the amount of business activity that takes place on Alibaba is greater than that of the competitors. However, still, the revenue it makes is less than that of some of its competitors. Nevertheless, Alibaba’s net income has been growing over the years by occupying almost 58% of China’s retail sales and having around 755 million active users. 

On “Singles Day” 2019 – explained to foreigners as the Chinese Black Friday – Alibaba received a record of 1290 million orders worth $38.4 bn. This made Singles Day even bigger than the Black Friday which saw spending of only $7.4bn. 

The majority of the revenue Alibaba draws is from the numerous e-commerce ventures, but Alibaba’s cloud computing services have also been experiencing fast growth with their revenue almost doubling every year since 2017.

Who are Alibaba’s Main Competitors? 

Despite the differences in the models of the two, as Alibaba adopts a “broader globalization strategy” which aims to target small businesses in the US, Alibaba.com is coming into direct competition with Amazon to secure the position of the leading e-commerce giant. You can find detail on this topic in our other posts, Amazon vs Alibaba.

Other significant competitors include Walmart, JD.com, and the Chinese company Tencent. 

Tencent provides various internet services including artificial intelligence, online advertising, entertainment, and most popularly social media services. Alibaba and Tencent have been involved in a race for winning the position of Asia’s largest company by market capitalization (a position held by Alibaba currently). 

JD.com is a Chinese e-commerce company. It is considered to be the major local competitor to Alibaba, particularly to the branch of Tmall. The direct control over the supply chain has allowed JD.com to ensure product quality and avoid the problem of fake or lower quality products, a problem that Alibaba has been receiving complaints about. 

Benefits of using Alibaba.com

There are a number of benefits that you can reap by establishing your digital business on Alibaba.com.

The first and foremost is the global exposure it provides. By providing access to suppliers from all over the world, Alibaba.com allows businesses to conveniently deal with international clients. This helps increase the scope as well as the network of the business. 

Another highly praised feature of Alibaba is the accessibility it offers. Jack Ma started the site with the intention of helping small businesses, hence Alibaba.com acts as the most useful platform for businesses to find reliable suppliers. Therefore, whether you are a manufacturer, wholesaler, solo merchant, exporter, or importer, Alibaba.com is the right site for you to take help from.

With the ever-increasing influence of internet on our lives, international e-commerce is gaining increasing popularity. This explains that bringing your business to the leading e-commerce platform, Alibaba.com, is definitely the need of the hour.

If you too are planning to start your digital business on Alibaba.com, enroll for this program preparing you to successfully launch your business on Alibaba.com. It is just the right opportunity to fully equip yourself for this new endeavor you are about to embark on!

Written by Masooma Asif
Syeda Masooma Asif is an undergraduate student at LUMS. With an Economics major, Masooma is deeply passionate about research in developmental economics aiming to provide consultancy services for the challenges faced by the less-developed economies. She also shares a passion for content writing, and through writing articles for Airschool she aims to contribute towards providing accessible education for all regardless of geographical or social disparities. Profile
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