Alibaba Case Study: Strategies and Challenges in China

This case study examines the remarkable success of Alibaba, focusing on its founder, Jack Ma, and its transformation into a leading e-commerce company in China. The analysis delves into Alibaba's strategic moves, including the development of Taobao and Tmall, to compete with international rivals like eBay and Amazon. It explores the challenges faced, such as issues with counterfeit goods and the dependence on China's internet infrastructure. The study outlines the company's objectives, including strategies to improve performance, analyze competitors, and recommend solutions for continued growth. It also highlights the evolution of Alibaba's business model, its online payment platform Alipay, and the challenges of operating in the Chinese market, including government regulations and competition. The case study provides a comprehensive overview of Alibaba's journey, from its inception to its current position, offering insights into its business strategies and challenges within the dynamic e-commerce landscape.

Alibaba Case Study

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Chapter-1..........................................................................................................................................3
The case study background,problem statement,research questions and objectives.........................3
CHAPTER-2 ...................................................................................................................................6
Description of the situation.........................................................................................................6
CHAPTER-3....................................................................................................................................8
The problems and critically evaluate the models to be used to analyse the case.......................8
A short summary of the entire work.........................................................................................11
Chapter 4........................................................................................................................................12
Analysis and Findings: An assessment of the current position.................................................12
Chapter 5........................................................................................................................................15
Proposed solution to problem, Integrated assessment of the analysis......................................15
REFERENCE.................................................................................................................................18
The case study background,problem statement,research questions and objectives.......................19
The problems and critically evaluate the models to be used to analyse the case......................20

INTRODUCTION
Alibaba is one of the number one e-commerce company that target online consumers in
china. Jack Ma was the founder of Alibaba Group and the target audience of the company is
always some other company or employees (McLeskey, Waldron and Redd, 2014).This case
discusses the success of Alibaba.com Corporation (Alibaba) in China under the leadership of
Jack Ma (Ma), its founder. It talks about the transformation of Alibaba into one of the most
successful e-commerce companies in China and also analyses its business portfolio. The case
explains in detail the rationale behind Ma starting an e-commerce website and his efforts to bring
about the growth of the company. Alibaba had emerged as the largest e-commerce company in
China. The company tailored its strategies to meet the needs of the customers and made a mark
because of its understanding of the Chinese language and culture. However, some experts have
also raised doubts over the sustainability of Alibaba's business model (Harter and et.al., 2014).
This report will represent the short summary of work done by Alibaba company and will explain
the background,problem and aims and objectives of the case study of Alibaba. It will also bring
out the problems that are made by Alibaba and solution and recommendation through business
plan will be given.
Chapter-1
The case study background,problem statement,research questions and objectives
This case throw lights on the hard work,talent and entrepreneurship skills of Jack Ma and
explains the detailed story behind how he transformed Alibaba.com Group to one of the leading
e-commerce companies in China. This case discusses the success of Alibaba.com Corporation
(Alibaba) in China under the guidance of Jack Ma, its creator. It discuss about the change of
Alibaba into one of the most flourishing e-commerce organization in China and also examine its
enterprise function (George, George and Wallio, 2017). The case states in points out the reason
behind Ma starting an e-commerce service and his dedication and hard work to bring that lead
to the enhance growth of the organization.
Alibaba is now become the largest e-commerce company in China. The company worked on its
strength and innovation plans and ideas to meet up the demand and wants of the customers and
made a good reputation in the market because of its knowledge and understanding of the

Chinese language and society. However the competitors and rivals have also raised questions
over the sustainability of Alibaba's business model (Cellura and et.al., 2014). The case provides
details about Ma facing the huge competition with foreign e-commerce companies like eBay by
establishing a rivalry website, Taobao.com, in the online service market. However, Alibaba
slowdown behind in the Chinese web activity market despite taking over Yahoo in China's
operations in 2005.
With Baidu.com which is the China's leading search engine declared its strategies and
plans to attempt into the speedily increasing e-commerce services and the rivalry was expected
to be deepen for Alibaba. However after the success of IPO, Alibaba.com was trying to
enhance its competitive place in China and also was preparing to give hard competition to other
Internet and e-commerce organization across the globe (Lashley and et.al., 2014). Various
problems that was faced by Alibaba.com such as rivalry from foreign e-commerce companies
like eBay,investigation of correct business model for Alibaba.com and trouble in evaluation of
how e-commerce companies deals with the future market.
Alibaba.com tackled all these issues by launching Taobao which is an online retail site
that allow individuals and small business to provide items for sale to consumers. This site was
free to use for members (Zheng and et.al., 2015). The problem with Taobao was that fake
merchandise and fake store wants,and Alibaba allocated sufficient resources to supervise sites
for crime. This can have a negative impact on customer perception of shopping on Alibaba's e-
commerce platforms. To demonstrate a valid registration for business and maintaining consumer
protection fund Taobao in 2008 launched Tmall,an online mall by which brand retailers sold
products to Chinese consumers. There were also problems related to duplicate goods and secured
infringement from foreign traders. To overcome this Alibaba modified the policies and
procedures of the company.As Alibaba is now entering into a new space of cloud computing,and
this will not be an easy and smooth sail for Alibaba has they might face certain competition.
Alibaba is very much dependent on internet infrastructure in China this implies that everything
depends on the government. The access to internet is regulated by state-owned
telecommunication operators under the control of administration and supervision of ministry of
information Technology bin China. They might not have alternative networks in the any

disruptions,failures with China's internet infrastructure. Accessing through reliable bandwidth
can also be a issue and this may result Alibaba to pay a huge pay in future.
Statement of the problem: There were various issues that were faced by Alibaba.com to sustain
in the market. Today Alibaba.com have emerged as one of the leading e-commerce website in
chine but has discovered many problems in between to reach over there (Tang, H. and et.al.,
2014). The certain problems faced by Alibaab.com are as follows-:
1) Alibaab.com had faced competition with eBay.This foreign e-commerce company try to target
the customers of china with its services. Since E bay tried to dominance the china as Alibaba was
a small Chinese business that assists the small and medium size businesses online.
2) Outside china,Alibaba faces problems regarding lack of trust and recognizance. According to
the survey conducted in US most of the people have no idea about Alibaba existence.
3) The customers cannot search its products on google. They have to make an effort to go to ots
website to search for a particular product every time.
Aims: To determine strategies to improve performance in comparison with competitors: A case
study on Alibaba.
Objectives:
 To analyses the strategies that re used by competitors of Alibaba.
 To identify the strategies that can be used by Alibaba to improve their performance level.
 To determine the models, theories and planning tools to improve the rate of performance
for Alibaba.
 To recommend strategies that can be used by Alibaba to raise their services in
comparison with its competitors.
Research Questions:
 What are the strategies that are used by competitors of Alibaba?
 What are the strategies that can be used by Alibaba to improve their performance level?
 What are the models, theories and planning tools to improve the rate of performance for
Alibaba?
 What recommend strategies that can be made by Alibaba to raise their services in
comparison with its competitors.

CHAPTER-2
Description of the situation
Alibaba group company which is the Chinese e-commerce site. This company develops
an online platforms for its customers to buy the products according to their need and demands.
This major businesses are done in the filed areas of business to business e-commerce platform
WITH Alibaba.com and business to consumer platform with Tmall.com and consumer to
consumer platform with Taabao.com. Alibaba also have a online payment platform termed as
Alipay.Alibaba faced huge international competition from Amazon.com and eBay (Neiger and
et.al., 2013). As Alibaba international business is not so expanded and eBay and amazon.com
have a brand trust across the world. Alibaba on the other hand produces most of its revenue from
the business done in china and international business customer. eBay and Amazon.com tried
target the customers at China .This lead to a competition between eBay and Alibaba .So to be
more competitive in market and to provide business opportunities outside China it established
Taabao which is business to consumer online retail platform.
The other major problems that are faced by Alibaba was that fake goods are been
delivered through online shopping. This would lead to customer dissatisfaction and can be
harmful for the company's future. Since Alibaba is an online business done with internet which is
controlled by Government. So if there would be any issue or failure no access will be provided
through alternative networks. As Alibaba is now entering into a new space of cloud
computing,and this will not be an easy and smooth sail for Alibaba has they might face certain
competition. Alibaba depends heavily on Alipay for processing of payment and escrow of
services in marketplaces. The danger is that Alipay's business is highly authorized so any
restriction could affect the business. The company invested that the controller and third parties
in China have been exploding their way to online and mobile payment services, such as those
provided by Alipay (Hartmann and et.al., 2016). Recent information represents that various
commercial banks in China are decreasing their present limits on transfers to joined accounts.
Alibaba.com mainly featured list of trade leads,photos of product samples and provide e-
mail communication between buyers and sellers. It was business to business platforms. In
2007,Alibaba.com had 32 million members for registration. eBay entered in China in 2002 and
it took away the major consumer market in china .To overcome the Alibab.com with this

competition Ma launched Taobao which is an online retail site where small business provide
item for sell to consumers. As Alibaba.com ,Taoabao was also free for it members to use and
from the year 2004 free text,communication started between buyers and consumers. This online
retail site operated on business to consumer platform. The major difference between eBay and
Taobao was that ebay used to charge the sellers for each transaction whereas on the other side
Taobao revenue was generated by selling out display advertisements.
Taobao took away the whole china market are from eBay as it was more responsive and
was more aware about the culture and choice of china population. Taobao was able to defeat
eBay in china due to the reason that they understand the language and culture of china population
and are aware about their desired and need of customers. The main aim of Taobao was not earn
profit or money but was to exit the eBay from the china market. They achieved this by meeting
the needs and desires of customer (Madina and et.al., 2016). Then Alipay was launched to
address the problem of trust between buyer and seller online. As the buyers were not willing to
pay before receiving and investigation about their product and sellers were not willing to ship the
products till they are sure about the payment. This lack of trust between buyer and seller became
the hindrance in the development of china. So this problem was solved by Alipay sellers would
not do the shipping of the product after receiving the Alipay notice of payment of buyer.
Unsatisfied product will be returned back to seller and Alipay will refund the buyer's
money. This lead to enhancement in the revenue of Alibab. Despite there were problems with
Taobao of fake goods and fake merchandise and various resources for invested by Alibaba to
monitor the sites for fraud. This lead to demonstration of valid registration by merchants,Alibaba
require that merchants should make use of their real name as joining. This lead to launch of
Tmall which is an online mall started by Taobao and it deals in Consumer to consumer platform
where branded retailers are sold to Chinese consumers. Tmall also generated its revenue
advertisements and auction (Bocken and Short, 2016). In 2011 Alibaby strengthen its policies
and programs to overcome he problem of fake goods delivered to customers. This would have
negative impact on customer perceptions of shopping on Alibab's e-commerce platform.
Alibaba also invested heavily on the mobile applications to handle the china's e-business
of about 500 million smartphone users. Alibaba can face major challenges in dealing with mobile
applications This was done due to the competition Alibaba faced from tencent holdings who

runs china's second largest e-commerce company (Joyce and Paquin, 2016kuda, H.,
2016.AbuGrain and Alibaba, 2017Kumar, 2017Walton, 2017Yazan and et.al., 2017). Alibaba
slowdown behind in the Chinese web activity market despite taking over Yahoo in China's
operations in 2005. These all are the problems that are faced by Alibaba to emerge as the leading
e-commerce shopping site.
CHAPTER-3
The problems and critically evaluate the models to be used to analyse the case.
Problems in the case study
Alibaba is China's is one of the world's biggest online e-commerce company. The major
three sites Taobao,Tmall and Alibaba.com have hundreds of million users,and host millions of
merchants and business organization (Karimi and Walter, 2016). It deals with more business
than any other e-commerce company in the world. Alibaba provided a wide range of products
and services through online portals. Some of these are-home,lights and
construction,jewelry,gifts,electronics,cloud computing etc.
Alibaba.com which is the world's online business to business platform for small and
medium size businesses. Alibaba which provides one of the world's successful platform for
medium sized business over the internet. Alibaba.com face major competition from eBay as this
e-commerce site wants to provide better services to china's population in comparison with
Alibaba.com.
To overcome this ,Jack Ma established Taobao which is an online retailer store that offer
products to sell to consumers. This was better I comparison with eBay as Taobao was ware about
the customer perception of china population. The problem with Taobao was that it would deliver
the fraud goods and fraud merchandise,this is not a good sign from customer perception as they
would not trust such online sites (Cortimiglia and et.al., 2016). So to overcome this Jack Ma tries
to impose more powerful policies and programs. To maintain its position at market place Taobao
then launched Tmall,which is an online mall and deals in consumer to consumer platform.
Business models can be used to overcome them
1)Business to business model or B2B

Many online websites sells its services and goods to an intermediate buyer whose duty is
then to sell out the product to the target customers. For example:Suppose an wholesaler place an
order from the website of a company and once consignment is received then only the end product
can be sold to target customers who can purchase the product at wholesaler's retails outlet. The
B2B represents both buyer and seller in a business entities. In order to develop
relationships with their distributors,suppliers B2B provides a huge number of applications (Xu,
2017). The major technologies that are used by B2B e-commerce are-:
Electronic data interchange(EDI)- It is an inter organization exchange of business documents
in structured format.
Internet-This an wide area network connecting different PC's across the globe.
Back end information-Such type of information are database management system that handle
the business data.
Advantages of B2B businesses
 The most essential advantage is that the organization has to focus more on companies
rather than on consumers. Since various companies are involved so this makes it simple
to influence the bunch of companies about the specific product.
 Since B2B does business with companies so brand loyalty of companies is more in
comparison with customers in market. The companies will be loyal to the business not
matter what.
Disadvantages of B2B business
 The major drawback is that the target market is not so wide to which the company can
sell out its product.
 The companies also need to give discount on orders provided by the company as their
order are in bulk and the power of bargaining is given to them in comparison with
customers.
2.Business to Consumer model(B2C)
Various online websites and companies make it use to conduct all the transaction
between business organization and consumer directly.
By using this model,a customer can directly visit the website,select the particular product
that is needed by the customer ,places its order for that product and an e-mail or message is sent

to business organization (Regina and Alfanur, F., 2016). Once the order is received goods would
be dispatched at customer location. Major features can be to attract a large number of
customers,heavy advertisements and promotions are needed to be done,good customer care
service is needed to be provided and investment in hardware and software.
Various steps need to be followed for B2C e-commerce
1)A customer will find out the requirements.
2)It will surf on various online website for that requirement to get fulfil
3)Comparison will be done on same products for cost,delivery date or any other terms
4)Place the order for that item.
5)The amount for that product is then made.
6)Receives that item that is ordered and inspects it whether it is correct or not.
7)If the product is not up to the mark then consult to the services support about delivered
product.
Advantages of B2C business
 This types of business are much more cheaper in comparison of B2B businesses.
 They provide 24/7 availability of services.
 The information can be shared with other customers also.
Disadvantages of B2C businesses
 There are major issues with security and privacy concerns especially the attackers can
attack and the private information can get attacked.
 The products are intangible cannot be touched and feel prior to the purchase.
3)Consumer to consumer(C2C)
This allow consumers to sell its goods and services to another consumers online. Such
type of sale is monitored by third party sit that helps to take care of information related to
transaction (Salamzadeh and et.al., 2017). The main motive behind C2C business model is to
provide consumer the ability to send the goods and services directly to other consumers without
interference of the middleman in between.
One such example of C2C business model is eBay where consumers can sell online its
product to there consumers,It makes out money by charging a small commission on every sale.
Advantages of C2C business model

 One of the important advantage of C2C e-commerce is that it allows the seller to keep the
major profit and help the buyers to get a better price .
 High convenience for sellers who can simply takes the picture of item and wait for
someone to purchase it without advertisement and promotion. It saves money of sellers as
no advertisements are need to be done.
Disadvantages of C2C model
 One major drawback can be payment .Suppose if the seller did not receive for the item
that have been shipped or sold. It is difficult to get the item back and buyer pay.
 If the quality of product is not liked by the buyer then the product can't be returned.
These issues are solved by third part like eBay and Amazon (Tan and et.al., 2016). They
have policies and guideline related to sellers to follow in case buyers have solid reason for
returning the product.
Executive summary
A short summary of the entire work
Alibaba group was launched in 1999 by just 18 people led by the founder Jack Ma,who
was a former English teacher in China. The hard work,dedication and knowledge of Jack Ma led
to the transformation of Alibaba.com. This organization faced many challenges from rival
companies. Like eBay that tried to establish its market in china and so Alibaba been an B2B
business model was only limited to small and medium size markets.
To overcome the issue Alibaba.com came up with the idea of Taobao.com to close the
doors of eBay for china population. Taoibo.com is an online service market. It was able to
overcome eBay in china as it has a high understanding of language and culture of population
staying over there (Apostolou and et.al., 2017). Taobao had issues relaxed to fraud good that are
been delivered to the customers so this lead to customer dissatisfaction and can be harmful for
image of Taobao in the market. So to solve this problem Jack Ma strengthen the policies and
program .
There were issues regarding mutual trust between buyer and seller as buyer wants to
make sure whether products are shipped or not without doing the payment and the seller wanted
that payment must be done first before shipment. To resolve this issue Ma brought the concept of
Alipay which is an online payment service. This allow the sellers not to ship the product unless

the Alipay notice of payment by buyer is received (Guo and et.al., 2017).Taobao does business
on B2C business model and have earned huge profit in less amount of time. The next innovation
that was done by Jack Ma was Tmall which is an online mart it is C2C business models and
allow one consumers to sell its product and services to another consumers. The major advantage
of this was that it was more convenient for sellers to sell its product to buyers easily.
As Alibaba is starting a new venture in cloud storage so this may lead to huge competition for
Alibaba as they are new to this cloud storage area. In terms of new ideas and innovation,Alibaba
is now starting a new mobile payment method as it is ready for its IPO. This Chinese e-
commerce giant will be ahead of its rivals like amazon,google,pay pal with innovative ideas and
secure method of using fingerprints instead of passwords. This Chinese company has changed
the way of conducting the global business. The explosive growth of Alibaba over china have
opened the door of expansion in the rest of the world.
CHAPTER 4
Analysis and Findings: An assessment of the current position
In 1999 alibaba.com was launched with the perspective of being the largest online retailer
in China. From the above report it has been find that alibaba is using business to business
platform (B2B) creating a nexus between global buyers and manufacturers from different
countries. Different companies are formed by alibaba to meet different need of customers.
Alibaba have launched different websites with different domain. Taobao is one of the website
laucnched by alibaba group (Zhang and et.al., 2017). It is a local website in China, where
domestic sellers and customers do the business. Another website which was launched under
alibaba was Tmall. This website was made specifically for branded companies to sell off their
products and services within China.
In chinese, Taobao means “Treasure Hunt”. Taobao.com is now one of the most visited
site in China and become largest shopping website. It is ninth most popular website in the world
by Alexa.com. In 2003, taobao launched and list millions of products and services from many
sellers in china. In 2008 alibaba launched Tmall.com, another website which is meant for only
branded and valuable products. China's middle and upper middle class prefer fast shoping and
high quality products. Taobao.com is meant for loacl sellers so there is limited branded products