THE ALIBABA CASE STUDY

Running head: ALIBABA CASE STUDY
Alibaba Case Study
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Question 1
Alibaba is basically an ecommerce platform. The major services that Alibaba provides
are B2B and B2C selling platform. When it first started, the company provided platform for
Chinese manufacturers to sell to other international retailers as well as traders. Then it started
to provide services for C2C and B2C sectors. In simpler words, Alibaba is somewhat like
Amazon or e-Bay as they too, connect the sellers and the buyers. They have three platforms
that they use for this purpose (Wang et al. 2018). The site Alibaba.com is used for
international business, 1688.com is used for B2B sales and AliExpress.com is a platform for
small businesses. Despite these similarities, Alibaba has some unique features. They do not
have inventories, thus, they have no goods stored, and they do not have any warehouses
where they would be able to keep the products. They do not have fulfillment responsibility
which indicates that they ate not liable to exchange or return but the seller is and nor does it
take any charges from its users.
The major competitor of Alibaba in China is JD.com. This company came in the
market few years later than Alibaba, and conducts their business through direct selling. They
have their own warehouses, shipments and transports that makes it one of the greatest
competitor to Alibaba (Jiang and Lu 2018). Due to their business structure JD.com has been
able to tap the gap in the market that had been their due to Alibaba’s business strategy, the
authenticity and reliability of the products.
Question 2
The competitive advantage of Alibaba in the country china is that they have an
extremely low cost business model. They do not have warehouses or direct transport system.
They do not take any money from the sellers which is a great competitive advantage for
them. Any other ecommerce companies have to bear the costs of such infrastructures or
services and thus are costlier than Alibaba (Yuen 2016). They have focused on cost savings
and affordability of the consumers and the SMEs. They also have started operating a
OneTouch platform that allows the consumers to book tickets for ships. They are focusing
more on providing their own delivery, much the same way their competitors do.
Another competitive advantage of the Alibaba is their ability to understand the
changes in the market and changing according to that. In most cases, the problem with old
companies remain in their rigidness to change. They do not accept the gaps that are there in
their business model. Alibaba is different in that aspect. They are constantly evolving with

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the new market. They have changed their business strategy and has changed the way they
approach counterfeit products (Forgione 2016). They are developing their physical presence
through acquisitions so that they are able to compete with the ecommerce giants like Amazon
or e-Bay. In the last few years there have been much outcry about the methods of corporate
business and their moral code of conduct. Though, the company got involved at the
beginning, they have been able to make all the necessary changes so that they are able to
compete against their market competitors.
Question 3
For businesses, the greatest motivation is that it provides them with large number of
businesses and consumers that are willing to buy from them. B2B businesses need bulk
consumers, mainly other sellers who will take products from them in a large quantity. The
Alibaba platform provides them with the opportunity to connecting with consumers locally
and globally. The international goods sellers for B2B business use the Alibaba.com to
facilitate imports and exports across the world. The local Chinese B2B sellers use 1688.com
which provides them with business opportunities in the Chinese market (Tan et al. 2015). The
china is a large potential market and due to its population, it is quite lucrative. There is also
AliExpress.com which is for small businesses, who are not willing to buy in large bulks but
in a small quantity. This enables both the businesses to compete in the market without
investing too much. There are no delivery charges which is an added bonus for them.
For customers, the company provides them with a diverse range of products at a much
cheaper level. The consumers can order in both small and large quantities. Thus Alibaba has
always kept focus on the cost effectiveness of their services. They do not require delivery or
any additional charges (Chen 2016). The company is well known and is a leader of e-selling
in the Chinese market. It also gives the consumers and opportunity to connect to their desired
sellers. The company has a swift refund policy which is also another motivation for using
Alibaba.
Question 4
Though alibaba is the most popular ecommerce brand in China, there are many
potential buyers inside the country who are not yet buyers of the brand. The reason behind
that is their association with the counterfeiting accusation. Many of the people in china prefer
authentic and original products. Due to the practices of Alibaba in the last few years and Jack
Ma’s commentary on counterfeiting that the quality of the counterfeited products are equal to

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or better than the original ones is likely to harm the image of the company. The people that
have still resisted becoming their consumers are likely to be brand conscious and high income
group that prefers authenticity over price. These customers will need better incentive and a
positive brand image for them to be associated with the brand (Lin and Mehaffy 2015).
Alibaba needs to improve their brand image and establish a system to =insure
products that they are selling. They need to take responsibility of the products that are being
sold through their website (Tricker and Li 2019). They also need to promote their businesses
showcasing the changes that they are making in order to create positive impact on the society
and corporate culture. The company also needs to collaborate with other genuine brands and
their sellers so that they are able to keep up the promises that they have made. They also
should create much more strict and moral policy for their sellers so that they are not able to
sell their products without violating company policy.
Question 5
In order to succeed in the online market place, Alibaba needs to modify their business
strategy. The company faces tough competition from companies like JD.com, Tencent, Baidu
and Wanda. All of these have their own niche customers though none of them come close to
the sales of Alibaba. The greatest challenge that Alibaba face from these competitors are their
physical presence and infrastructure. Most of such companies have their own warehouses,
back offices, logistics and transport services that enables them to acquire products all over the
world directly and sell them to the consumers. They are also able to inspect and manage the
quality of their products and reprimand sellers if their quality id not found as promised in the
contract (Chen et al., 2015). They sellers are also criticized for selling counterfeiting
products.
Alibaba does not have any of those. Though they are improving their physical
presence and efficiency in the industry, they are yet to reach the nexus. In the meantime, they
must invest in creating a better brand image. They should look at the promotional techniques
of its competitors and use better ones to appeal to the consumers on a global level (JIANG
2019). Creating physical presence through creating retail shops or malls where they will sell
products, it will be much more advantageous. They might also create a separate platform for
customers that are willing to buy branded and authentic goods thus differentiating their
services from the other ones.

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Question 6
Selling to B2B and B2C are quite different in online selling than it is in shops.
Looking at Alibaba as an example, it can be seen that they have created three different
platforms for B2B selling. One is for international import and exports, i.e. for global
businesses named Alibaba.com. The second one is the domestic business platform that
connects the local manufacturers with the whole sellers or traders. The last one is only for
small businesses which does not sale on bulk order only (Hong and Xu 2019). Here the
company has kept in mind the different needs of different kinds of businesses and have given
them the necessary platform to conduct their business. For B2B customers there are certain
barriers as well. There are no way that a one business can negotiate with the other on the
prices. As the company does not punish those sellers who sell counterfeit goods, the traders
and other businesses that buy from a business are more vulnerable.
For B2C business, the customers have high bargaining power as there are many
powerful competitors. They also can cross check across their sites. The removed nature of
Alibaba’s business has made them success oriented while forgetting the moral responsibility.
This also provides and advantage. Due to their reduced cost for non-existent physical
presence, they have been able to keep the cost low (Anwar 2017).

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References
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markets. Journal of International Entrepreneurship, 15(4), pp.366-389.
Chen, J., Tao, Y., Wang, H. and Chen, T., 2015. Big data based fraud risk management at
Alibaba. The Journal of Finance and Data Science, 1(1), pp.1-10.
Chen, K., 2016. Counterfeit as a Challenge to Chinese E-Commerce Platform—the case of
Alibaba.
Forgione, J.M., 2016. Counterfeiting, Couture, and the Decline of Consumer Trust in Online
Marketplace Platforms. NYL Sch. L. Rev., 61, p.195.
Hong, Y. and Xu, J., 2019. Toward Fragmented Platform Governance in China: Through the
Lens of Alibaba and the Legal-Judicial System. International Journal of Communication
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Jiang, H. and Lu, F., 2018. To be friends, not competitors: A story different from Tesla
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JIANG, W.R., 2019. Analysis of Alibaba Website by SWOT. DEStech Transactions on
Economics, Business and Management, (ssemr).
Lin, Y.H. and Mehaffy, T., 2015. Open Sesame: The Myth of Alibaba's Extreme Corporate
Governance and Control. Brook. J. Corp. Fin. & Com. L., 10, p.437.
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of multi-sided platforms: the digital ecosystem strategy of Alibaba. com. Journal of the
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Tricker, B. and Li, G., 2019. UNDERSTANDING CORPORATE GOVERNANCE IN CHINA.
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Wang, J., Huang, P., Zhao, H., Zhang, Z., Zhao, B. and Lee, D.L., 2018, July. Billion-scale
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