i. Photo of Entrepreneur
Birth: October 1964
Birthplace: Hangzhou, Zhejiang
Company: Alibaba.com
Head office: Hangzhou
Industry: EC, internet portal
Birthplace: Hangzhou, Zhejiang
Company: Alibaba.com
Head office: Hangzhou
Industry: EC, internet portal
ii. Picture of Product
Website : alibaba.com (e-commerce company)
iii. Brief description of the business concepts.
Alibaba.com is a B2B e-commerce company. Alibaba’s primary business is to serve as a directory of Chinese manufacturers connecting them to other companies around the world looking for suppliers. According to iResearch, it was the largest online B2B company in China in 2006 based on the number of registered users and market share in China by revenue. Yahoo is currently a 40% share holder in the parent Alibaba Group.
They operate two marketplaces; the first is an international marketplace based in English tailored to global importers and exporters in China; the second is a Chinese marketplace that focuses on suppliers and buyers trading domestically in China.
iv. A profile of the Entrepreneur and the business.
Jack Ma and his team of 18 founders created Alibaba.com in Hangzhou, China in March of 1999. Since that time, Alibaba.com has grown to become China's largest e-commerce company. Based in Hangzhou, Alibaba.com was founded by Jack Ma in 1999. Alibaba.com operates two key online B2B marketplaces, an International Marketplace (www.alibaba.com) and a China Marketplace (www.alibaba.com.cn). Alibaba.com’s English-language International Marketplace serves to bring together international importers and largely China-based suppliers by offering an online sourcing platform. The China Marketplace is focused on facilitating domestic B2B trade within China. In 2008, Alibaba.com also launched a Japanaese-languange Marketplace (www.alibaba.co.jp).
Each marketplace is segmented into more than 40 industry verticals covering major consumer product categories such as apparel, beauty, electronics, gifts, office supplies and security products. As of September 2010, together the International and the China Marketplaces have over 56.7 million registered users – 14.9 million on the International Marketplace and 41.8 million on the China Marketplace.
v. A brief introduction of how the business started.
In 1995, Ma founded China Pages, widely regarded to be China's first Internet-based company. Ma then accepted an invitation from China's Ministry of Foreign Trade and Economic Cooperation (MOFTEC) to head the information department of the China International Electronic Commerce Center (CIECC). He left MOFTEC in early 1999 to launch Alibaba.com.
In the end of 2008, Alibaba launched B2B sites in 6 non-English language versions, which help native traders source products online easily. The sites are:
- Spanish: http://spanish.alibaba.com/
- German: http://german.alibaba.com/
- Italian: http://italian.alibaba.com/
- French: http://french.alibaba.com/
- Portuguese: http://portuguese.alibaba.com/
- Russian: http://russian.alibaba.com/
Alibaba.com is majority owned by the Alibaba Group which was established by Jack Ma and 17 other founders in 1999. In 2005, Yahoo! Inc. purchased a 39% stake in the Alibaba Group for US$1 billion. The Alibaba Group owns and operates a number of other high profile Internet businesses, but it is important to note that these businesses are not part of the Hong Kong-listed company, Alibaba.com.
vi. How the business gained success.
Alibaba.com is world's largest business-to-business marketplace for global trade and host to China's leading domestic business-to-business trade community. Its Web properties publish product catalogues from over 100,000 suppliers and have over 1,000,000 registered members from over 200 countries who buy and sell products from all industries and services on its platform. Alibaba's vision is to become the number one destination for buyers and sellers at small-and medium-sized enterprises to find trade opportunities, promote their businesses and conduct transactions online.
vii. The ups & downs of the entrepreneur and his business.
My dream was to set up my own e-commerce company. In 1999, I gathered 18 people in my apartment and spoke to them for two hours about my vision. Everyone put their money on the table, and that got us $60,000 to start Alibaba. I wanted to have a global company, so I chose a global name. Alibaba is easy to spell, and people everywhere associate that with "Open, Sesame," the command that Ali Baba used to open doors to hidden treasures in One Thousand and One Nights.
There were three reasons why we survived. We had no money, we had no technology, and we had no plan. Every dollar, we used very carefully. The office opened in my apartment. We expanded when we raised money from Goldman Sachs in 1999 and then Softbank Corporation in 2000. We're in China today because I believe in one thing: global vision, local win. We designed the business model ourselves. Our focus is on helping small and medium-size companies make money. We never copied a model from the U.S., like a lot of Chinese Internet entrepreneurs did. We focused on product quality. It has to be "click and get it." If I can't get it, then it's rubbish.
I call Alibaba "1,001 mistakes." We expanded too fast, and then in the dot-com bubble, we had to have layoffs. By 2002, we had only enough cash to survive for 18 months. We had a lot of free members using our site, and we didn't know how we'd make money. So we developed a product for China exporters to meet U.S. buyers online. This model saved us. By the end of 2002, we made $1 in profits. Each year we improved. Today, Alibaba is very profitable.
The lessons I learned from the dark days at Alibaba are that you've got to make your team have value, innovation, and vision. Also, if you don't give up, you still have a chance. And, when you are small, you have to be very focused and rely on your brain, not your strength. Going public is an important milestone for Alibaba. The time was right. Our B2B company is established, market conditions are healthy, and management is strong. The reception proved a mainland Chinese company can list in Hong Kong and still get a very strong valuation and global investor interest.
My vision is to build an e-commerce ecosystem that allows consumers and businesses to do all aspects of business online. We are going into search with Yahoo and have launched online auction and payment businesses. I want to create one million jobs, change China's social and economic environment, and make it the largest Internet market in the world. I'm just a purist. What is important in my life is that I can do something that can influence many people and influence China's development. When I am myself, I am relaxed and happy and have a good result.
viii. Business Philosophy & Business Strategies used.
Alibaba.com cooperates with and benefits from this “eco-system” of companies, but none of the revenues from these businesses are counted as part of Alibaba.com. Some of the Alibaba Group’s other key business include:
· Taobao
A consumer-focused e-commer cebusiness
· Alipay
An online payment service
· Alimama
An online advertisement exchange service
· Yahoo! China
Online classified listings and community-based groups
The business model of Alibaba is very simple. It is to help sellers meet buyers. More specifically, it provides an Internet based business-to-business (B2B) platform where sellers (suppliers / manufactures) can meet buyers (outsourcers / wholesalers) on a global scale. The company offers two platforms, one in Chinese for Chinese businesses, and another in English for the other international customers. Customers are both the sellers and the buyers, who are able to post “storefronts” to advertise their products or needs.
Alibaba offers several services to aid the e-commerce, some of which are free and come with the basic account, and others must be paid for. Income is primarily generated from suppliers who purchased services to be listed on the site, such as priority placement in industry listings and searches. By June of 2007, Alibaba had over 19.8 million registered users, with 16.6 within its Chinese marketplace. 219,098 of these 19.8 users where paying members.
Alibaba offers several services to aid the e-commerce, some of which are free and come with the basic account, and others must be paid for. Income is primarily generated from suppliers who purchased services to be listed on the site, such as priority placement in industry listings and searches. By June of 2007, Alibaba had over 19.8 million registered users, with 16.6 within its Chinese marketplace. 219,098 of these 19.8 users where paying members.
ix. Achievements attained in terms of Market Share, Sales Turnover, Number of Outlets,
As well as the Hangzhou headquarters, Alibaba.com maintains more than 30 other sales and marketing offices in China as well as offices in Europe, Hong Kong, Taiwan and the U.S. As of the end of June 2010, Alibaba.com had 13,533 employees – the vast majority of whom are based in China. Alibaba.com became a publicly-traded company on the Hong Kong Stock Exchange on 6th November 2007. Approximately 17% of Alibaba.com was sold to the public raising roughly US$1.5 billion valuing the company at the time at US$8.8 billion.
The IPO share price in November 2007 was HK$13.50. Since then, Alibaba.com’s share price has shot as high as HK$40 in November 2007 down to less than HK$4 in October 2008. The share price is currently around HK$14 resulting in a market capitalisation of approximately US$8.9 billion.
Alibaba.com generated revenues of RMB 3.87 billion (US$568 million) in 2009, up 29% over the RMB 3.0 billion (US$440 million) in 2008. Net profit for 2009 was RMB 1.01 billion (US$148 million), down 12% from the RMB 1.15 billion (US$169 million) recorded in 2008. In the first half of 2010, net profit was US$158 million on revenues of US$603 million.
Alibaba.com generated revenues of RMB 3.87 billion (US$568 million) in 2009, up 29% over the RMB 3.0 billion (US$440 million) in 2008. Net profit for 2009 was RMB 1.01 billion (US$148 million), down 12% from the RMB 1.15 billion (US$169 million) recorded in 2008. In the first half of 2010, net profit was US$158 million on revenues of US$603 million.
x. Recognition & Acceptance of Product.
SOFTBANK CORP. announces that the company has reached a basic agreement to form a strategic partnership with Alibaba.com Corporation (affiliated of the company, head office: Hong Kong, China, representative: Jack Ma, hereinafter “Alibaba”) and Yahoo! Inc. (head office: California, U.S.A., representative: Jerry Yang, “Yahoo”), for the promotion of Internet businesses in the Chinese market. Reorganization caused by the alliance, the Company has decided to sell its shares held in Tao Bao Holding Limited (consolidated subsidiary of the company, head office: Hong Kong, China; representative: Jack Ma “Tao Bao”).
SOFTBANK CORP.; Tao Bao, the no. 1 auction site operator in China; Alibaba, the no. 1 B2B marketplace operator in China; and Yahoo, operator of portal and search sites, will form a long-term strategic partnership for the joint development of a solid operation base in the rapidly expanding Internet market in China, by making the utmost use of the high recognition of Alibaba and the strong brand power of Yahoo.
xi. How the e-commerce company got its name.
Jack Ma said, "One day I was in San Francisco in a coffee shop, and I was thinking Alibaba is a good name. And then a waitress came, and I said do you know about Alibaba? And she said yes. I said what do you know about Alibaba, and she said ‘Open sesame'. And I said yes, this is the name! Then I went from Germany, people from Tokyo and China… They all knew about Alibaba. Alibaba open sesame. Alibaba is a kind, smart business person, and he helped the village. So…easy to spell, and globally known. Alibaba opens sesame for small- to medium-sized companies. We also registered the name Alimama, in case someone wants to marry us.
xii. Unique features about the business concept that makes it outstanding.
What has made the Chinese e-commerce giant Alibaba.com the world leader in creating and serving business-to-business relationships has been their unique ability to link suppliers and buyers around the world. Coinciding with their value proposition and business ideas has been their timing in the history of the economic growth of China that has served to fuel their incredible growth.Alibaba B2B Script provides everything you need to establish a professionally looking online B2B Website. All most demanded features are supported by Alibaba B2B Script. (see Alibaba B2B Script features list). Alibaba B2B Script is extremely flexible - you can freely customize it to meet your demands. However, if you are not an advanced user and do not wish to customize the software, you do not have to - we designed Alibaba B2B Marketplace Script such that is can be managed and installed by anyone who can use a web browser.
Global Features:
- Completely dynamic, & Easy to manage from Admin
- Custom develop your B2B script
- Template based script
- Fully Customizable Site Design and HTML
- Customizable Item Display
- Customized Product Search and site Browsing
- All Web Browser Compatibility
- Easy installation script!
- Flexible template system allows you to easily change design
- Protection from Hackers
- Web based Administration tool
- Supports Multiple Payment Gateways
- Multi-Language Script
- Different Membership Levels
xiii. Key Factors contributing to the success of the business.
April 12 2010, the largest independent third-party payment platform, Alipay (China) Technology Co., Ltd. announced the Alibaba Group continues to invest 5 billion yuan Alipay over the next five years.This is the signal that the third-party payment platform has got the high speed development opportunity.Earlier, Paypal accounced cooperation with Alipay. 26 August 2010, Alibaba.com announce purchase of Auctiva. Alibaba.com Ltd. said Tuesday it had acquired e-commerce software vendor Auctiva Corp., accelerating the Chinese company's push in the U.S. market and raising the specter of increased competition for eBay Inc.
xiv. Future
With Alibaba’s business model and value chains, the future strategy of the company includes strengthening and securing their supply chain to increase their substantial market share, increase profits, and hold off competitors. Many of these planned strategies will happen through various marketing and customer service initiatives, such as targeting marketing to increase the customer base, continuously adding tools and features to the software, monetizing a user base that has been receiving many free services for years, and expanding their service platform from trading to customer relationship management. As Alibaba expands out of China, it must face fierce competition from Global Source and niche B2B service providers. If they can expand while the competition threatens to move onto Alibaba’s home turf, their future looks very bright.
xv. References
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