7/31/2019 Alibaba (2) 1

1/23

COMPETING INCHINA AND ITS BEYOND

7/31/2019 Alibaba (2) 1

2/23

Alibaba group was founded by Jack Ma in 1999. Launched chinas first commercial website.

Mission:- To help small & medium enterprises.

Started with 2 websites www.alibaba.com &

www.china.alibaba.com

Focused on various business models:- B2B, B2C, C2C.

Alibaba went for IPO in October 2007.

Alibaba ranked 8th in world for e-commerce services in 2008.

7/31/2019 Alibaba (2) 1

3/23

Raised money from Venture Capitalist. Platform for trade B2B.

2 Lac member at the end of year.

Attracted other companies into e-commerce.

Stood hard in dotcom bubble.

OBJECTIVES:-

Gather work force.

Build customer Base

Establish Brand name

7/31/2019 Alibaba (2) 1

4/23

Leadership.

Free service.

Simplicity of website

Infancy.Limited focus area

Emerging e-commerce.

Increasing broadband usage

New entrants.

Limited usage of credit cards.

Trust factors.

Consumer psyche.

7/31/2019 Alibaba (2) 1

5/23

1999 to dotcom bubble

7/31/2019 Alibaba (2) 1

6/23

Raised money from venture capitalist.

Goldman Sachs, Fidelity investments, Investor AB, Templeton Dragon Fundinc. and Transpac industrial holdings limited- raised US $5 million.

Platform for the trade- B2B.

2 lac members signed up with alibaba.com till the end of the year.

Attracted other companies into e-commerce as the growth prospects seemedto be vey high.

Stood hard in dotcom bubble.

Sustain for 102 years.

Gather work force.

Build customer base through aggressive promotion and efficient services.

Establish brand name.

7/31/2019 Alibaba (2) 1

7/23

Customization.

Segmentation and targeting.

Delivering highest value to the customers.

Free services.

Alibaba China was launched in 1999 was a website in chinese language

serving domestic B2B trade in china. Alibaba international was an english website which connected Chinese

SMEs.

It had around 2.5 million users present in around 200 countries in 2007.

7/31/2019 Alibaba (2) 1

8/23

Service design.

Buyers and sellers- focused on SMEs. Suppliers were allowed to list their products and buyers could post their

request on the board.

The buyers also had the facility to chat online with the supplier if he was

online.

Venture capitalist. Softbank corporation- US$ 20 million and at that time softbank was the

largest investor in internet business.

7/31/2019 Alibaba (2) 1

9/23

Autocratic leadership.

Corporate culture.

Appointment of Goldman Sachs chairman- Peter Sutherland.

Appointment of Softbank CEO- Masayoshi Son.

They were made the members ofalibabas board of advisors.

7/31/2019 Alibaba (2) 1

10/23

David wei- CEO of Alibaba.com. An influential leader.

Was foreseeing.

Forecasted the growth in internet business.

We cannot create beautiful

power points,but we know

how to listen to our customers.

7/31/2019 Alibaba (2) 1

11/23

2000 to 2003

7/31/2019 Alibaba (2) 1

12/23

Dotcom Crash

Advertising Revenue

Bankruptcy

Mergers

Early 2001 Alibaba offered Alibabies

Late 2001 created a Community China Suppliers

Set a Trustpass Membership.

Withstand Dotcom Burst Consolidate Firms Position

Image Building

Retain Employees

7/31/2019 Alibaba (2) 1

13/23

Back to China- Concentrated on China

Back to Central(i.e. Shanghai)

& Back to Coast- Concentrated on coastal areas, the richest region in China. Offered customized online marketing place for its members called Alibabies.

Taobao was launched in May 2003 in competition to eBay EachNet and becameChinas most popular C2C trading site.

Introduced Alipay which was an escrow-based payment solution which was allowedcustomer to safely and quickely send and receive money online.

Allowed buyers to call sellers before buying a product.

Selling of Advertising Space

Selling statistics & reports on various sellers.

Charging of Membership.US$ 3000 per year which gradually increased to US$ 8000

per year.

Retention of Employees in tough Times

Appointment of GEs CEO

7/31/2019 Alibaba (2) 1

14/23

Conservative Motivating

Down to Earth.

Lets make one Dollar Profit for the whole year. We Spend US$ 5 Million,

We shouldmake at least one back.

7/31/2019 Alibaba (2) 1

15/23

2003 to 2007

7/31/2019 Alibaba (2) 1

16/23

Entry into C2C and B2C

Winning over eBay

Yahoo! china Acquisition

Expansion within China

Global Presence

Better Revenue Model

7/31/2019 Alibaba (2) 1

17/23

Convincing SMEs about the safety of online transactions with Alibabassystem by emphasizing on Alibabas partnership with a leading bank in

China.

Alibaba formulated three strategies to deal with dotcom crash : Back to

China Back to Central Back to Coast

Taobao was launched to compete with eBay.

Launched AliPayan online payment system.

7/31/2019 Alibaba (2) 1

18/23

Part of HKSE composite Index

Ali-ADvance Bidding Site

Use of 3G Networks

Advisory Services

Marketing Solutions

Organizational Development

New Competitors

Youa Baidus C 2 C website

Kaixin001 Social Networking Site

7/31/2019 Alibaba (2) 1

19/23

Free Membership : They were offered basic services free of cost.

Trust Pass membership : It was a paid service where the member had to

pay US$299 and would be verified by a third Party credit reporting agency.

Gold Supplier: This was primarily for export oriented suppliers . The

suppliers were classified into 27 industries which enabled the buyers to

locate the companies easily.

7/31/2019 Alibaba (2) 1

20/23

Vision for the future as per Jack Ma-My vision is to build e-commerceecosystem that allows consumers and businesses to do all aspects ofbusiness online.

Development of New Browser

Added Features

Built-in Yahoo! China Search Engine

Local Language

Light, Hence Faster

Revenue Model Pop-Up Ad Blocks

Aggressive Promotion

Targeting College and Young Working Class

7/31/2019 Alibaba (2) 1

21/23

Baidustrong domestic player

Free services provided by Baidu and Google

Conversion of free model to paid model

7/31/2019 Alibaba (2) 1

22/23

Diversification

Financial StructureUnderstanding of Local

Markets

Brand ambiguity

Yahoo! ChinaUnder Positioning

Dilution of Management

IPO

Untapped Market

Segment

Google and Baidu

New Entrants

7/31/2019 Alibaba (2) 1

23/23

THANK YOU

PRESENTED BY:ADITYA SETH

ABHISHEK ANAND

ANKIT AGGRAWAL

ADITI CHAUDHARY