Going Global Case Study

Emergence of China in the Global E-Commerce Market (B): Alibaba.com’s Surge

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Abstract:
Second in the two case series, this case portrays Alibaba.com, a portal that withstood the Chinese and emerged as a leader in a short span of 9 years. Launched in 1999, the portal targeted SMEs providing Business to Business (B2B) solutions and aggressively expanded the customer base by tailoring its offerings to various SMEs. Alibaba’s web presence includes an international marketplace, which focuses on global importers and exporters, and a China marketplace focusing on domestic suppliers and buyers. Alibaba’s business and operational patterns helped it to become the highest market valued firm. This enabled the company to be listed on the Hong Kong Stock Exchange in November 2007. And set its sights on global expansion, also offering more services to its domestic clients. Though hailed as a good strategy, as the incremental revenues will out do incremental costs by miles, it has its own risks. Company’s success of the company depends on its ability to tailor itself to suite the needs of global diversities – not a mean task by any measure and not many portals could achieve in the past. This case enables analysis on the strategies, which the company has adopted in its initial stages to establish itself facing adverse conditions. How could Alibaba.com install faith in its customers in such a short span of time? What measures did the company take to overcome the resistance of the Chinese? Is the company too ambitious in its global plans? Can the company handle diverse needs of foreign and domestic customers? What measures should it take to succeed the complexities involved in global expansion? Which regions should it focus on?

Pedagogical Objectives:

• To understand the dynamics of the Chinese B2B E-commerce market
• To analyse the business methodology of the Alibaba group
• To discuss the risks of online business, especially in global expansion
• To understand the importance of efficient and adequate business model in the growth of an online business.

Keywords : E-commerce; Dynamics of online business; Alibaba.com; Internet commerce; Chinese electronic commerce; China in global e-eommerce; Digital economy; Critical success factors of e-commerce; Industry Analysis Case Study; Strategies of Alibaba.com; Internet economy