Alibaba business values

Résumé du document

On the 6th of last November, one week after its introduction, the Alibaba stockmarket was quoted for the first time: it acquired 190% of its introduction price .

Other than being a testimony that both China and the internet have a habit of going to the heads of investors, Alibaba was created from the increasing need of having a comprehensive and reliable base of information while sourcing and doing business particularly in China. It helps to skip the common barriers while trading with another country (E.g. language, knowledge of the market, reaching remote manufacturers with limited exposition or marketing resources).

Alibaba has increasingly become what eBay once was and created buzz in the B-to-B market.

At the beginning of the month, one week after its introduction in the stock market, the value of the stock increased by 190% after its first quote. We will attempt in this study to determinate whether this a translation of a strong enthusiasm of the investors in diversifying their portfolios (e.g. shifting from some ‘cash flow dying' market such as the US) and investing in anything Chinese, or a real testimony of the strength of this new born company.

We will first analyze the situation of the company. Then we will determinate the segmentation of the market. Lastly we will look at their market strategy.

Extraits

[...] Thus, Alibaba offers an answer to these problems. Clearly, the pool of customers for Alibaba would prefer the SMEs than other larger companies. The use of English even in Business is not yet widespread in China and Alibaba helps to overcome this barrier. Again the average user of Alibaba would rather be a SMEs small importer/exporter with very little resources, or a translator, or in a business-sourcing trip. Obviously the English language website of Alibaba focuses in B-to-B trade for international buyers trying to get into contact with Chinese sellers. [...]

[...] The buyer has the choice between a one-year or a two years pass. When you are a buyer or a supplier, you need sometimes a long time to find the good person who you are expecting. This site is also very large and everyday new people come in or propose new products. A trust member pass of one year allows establishing a long-term relation. Moreover, Alibaba website often sends to your email provider emails to know how you can use Alibaba more efficiently. Place Alibaba is present only on the web. [...]

[...] Alibaba was more local. But nowadays, Alibaba is a global company (even if Alibaba has different websites). For example in Japan, many people do not speak English at all. Alibaba is opening a new website responding to the Japanese buyers or suppliers. On the other hand, some countries like India are also economically booming. India is a specific country with different cultural codes than in Europe or in Asia. Opening a website dedicated to India's business is the best way to involve them in the network. [...]

[...] Alibaba offers two kinds of member pass. The first one is the trust pass. Indeed, on Alibaba, some suppliers or buyers can make the choice to be contacted just by trust pass. It means that your interlocutor bought a member pass because he has an idea for a business. Many people on this website try to set up a business. They are sourcing where to produce or where to buy goods, but they are not necessarily serious. The trust pass offers four advantages: As we said, an unlimited access to all buyers or suppliers It offers a priority listing in buyer searches Increased buyer confidence of buyers prefer to make business with the trust pass) Continuous promotion: you can display your company website and address According to the Alibaba website, the information lacks authenticity is the most considered fact. [...]

[...] The direct competitor of Alibaba is Global Resources. Global Resources offers some slightly different services than Alibaba, which could offer it a strong edge and a more comprehensive offering, e.g. an online market place, catalogues, brochures and publications, and China organizes fairs and trade shows. Global Resources, being smaller can also emphasize more on screening and verifying suppliers for quality capabilities. This is becoming at the moment one of the main problems of Alibaba which is a victim of its success. [...]