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The Alibaba Group Company Analysis

Emerging from a single apartment unit in Hangzhou, China, the Alibaba Group burst onto the global e- business scene with Alibaba. com- a web service which expedites B2B trade all over the world- to become one of China's first internet sites. Alibaba. com has grown admirably from its first beginning as a general e-market to a huge e-marketplace.

Most customers and suppliers consider alibaba. com as a "grand B2B dating site". Businesses that want to get specific products can publish their requirements in the wish of any "match" with potential suppliers. They are able to effectively search Alibaba. com for business customers who have already recorded their searches.

This record has examined the factors which may have added to the success of Alibaba. com in business to business market. The four Ps of the marketing strategies are among the factors which have added to the success of Alibaba. com. Product/ service is one of the marketing strategy that has resulted in the success of Alibaba. com. The services offered are such as online payments, listing solutions, security and authentication, instant messaging, member reputation and after sales services such as warrantee programs. All these services have accelerated the business's success. Costing is another strategy that resulted in the success of Alibaba. com; the company has adopted lots of costs strategies such as; product line pricing, penetration prices and discount rates. These rates methods used are reasonable to the business enterprise to business customers and also have increased the sales of the business.

During its rapid growth, they have incurred issues and became more subjected to greater competition. Promotion is also one of the marketing strategies that led to the success of Alibaba. com. The business encourages its services by using internet marketing strategy, mass media advertising and sponsoring of incidents. Finally is the circulation strategy whereby Alibaba. com uses the internet as its intermediary whereby it offers several websites, it also uses direct distribution route; Alibaba Groupings has 40 outlets in china.

Other factors that added to the success are such as; strong brand, providing customers with remarkable value and superior shopping experience, considerable sales level and realizing economies of size.


Alibaba. com Limited is the global innovator in business-to-business (B2B) e-commerce and the flagship company of Alibaba Group. That was within 1999, Alibaba. com is the most significant online market for both international and home. Product and services suppliers running a business to business guided with good circulation channels. David Wei (2007)

Alibaba Communities provides three online B2B marketplaces that connect buyers and retailers from throughout the world- British- language industry (alibaba. com), a Chinese- language market place (alibaba. com. cn) and a Japanese- vocabulary current market (alibaba. co. jp).

Apart from Alibaba. com, the Alibaba Group has diversified its initiatives with other e-commerce sites such as Taobao. com, Alipay, Alimama, Alisoft and Yahoo Koubei!, a web based classified service collaboration between Yahoo! China and Alibaba Group. These web services develop the Alibaba Group's business stock portfolio to include services like retail websites, and business management alternatives, so that it is one of the greatest and most complete providers of internet retail and B2B services. On these sites Chinese and international firms trade everything from cars, building materials to iPods, Televisions and stationery

The key advantages of using alibaba. com are such as Low cost, Access to many suppliers/buyers, Quick transfer time, More transparency in transfer, Lower risk of fraud, Easy to make contacts with SMEs. Piet Walraven (2009).

The initial business design of Alibaba was simple; assist in a 24/7 reaching program for suppliers and purchasers throughout the world. From the start Alibaba did not merely connect Chinese language suppliers with international potential buyers, but it possessed the purpose of connecting all importers and exporters throughout the world to the other person. David Wei (2007)

Both marketplaces are segmented into over 40 industry verticals covering major consumer categories such as clothing, electronics, gift ideas, beauty, security products and office items.

Without a doubt Alibaba is the leading international Chinese Internet company. Its British terminology B2B website is utilized by suppliers and clients from anywhere across the globe.



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Alibaba. com was one of the few companies in China that did not copy existing business models in america or Europe

---------It offers a platform for purchasers and retailers, and proposes news, analysis and timely price lists, and development team works research new solutions and functions to aid their website that assist to enhance their service and reduce procedure cost and acquire large profit.

----------Its business design aspires to structure a competent, flexible and reactive structure before a demanding customer demand and information modern culture opportunities.

----------Under a business design, its network of associates for creating, marketing and providing value and romantic relationship capital to 1 or several segments of customers under B2B in order to create profitable and sustainable revenue streams. Piet Walraven (2009)


-Based on original business model as a long-term model to build a solid base for B2B:

- Presenting a repository,

- Looking to gain earnings from purchase commissions,

- Pursuing up services provided on e-commerce system,

- And providing value-added services.

The key success factors because of this business models are to build critical mass quickly to create value and then, to audit the members: build trust by creating a transparent environment


The term marketing mix refers to the primary elements that must be attended to in order to properly market for understanding the basics of what makes a good marketing campaign. Here is a brief description of each element of the 4 Ps of the marketing blend.


Effective marketing is a key element in any business enterprise. Companies/ businesses which do not have experience in marketing a service/product will often overlook its importance. Element of marketing is discovering the mix of the four "Ps" that makes a service/product unique. (Armstrong, 2004) The four "Ps"

are product, price, advertising, and place/syndication. The four "Ps" are on the list of factors that contain added to the success of Alibaba. com on business to business marketing.


"Product strategy is similar to a roadmap, and such as a roadmap it's useful only when you know where you are and where you want to travel". (McGrath 2001)

--------------Product is whatever can be wanted to market to meet a need or want. The merchandise, which is often advertised, include physical goods, services, persons, places, organizations, and ideas. In deeper sense, the merchandise is not a physical item but a notion of the consumer or an individual. Product means satisfaction of the client rather than a physical good.

------------Alibaba. com offers variety of services such as trust and safety, online payment, listing solutions, security and authentication, instant messaging, member reputation and after sales services such as warrantee programs.

--------------An online market does not hook up the buyer and seller actually, therefore in order to ensure the security of the buyer and retailer Alibaba. com offers trust and safeness; it offers profile protection training to both customers and the vendors, it also helps customers on how to identify an authentic provider, alibaba. com also enables its buyers/suppliers to be able to report disputes which could arise. Alibaba. com offers ID verifications, whereby confirmed and certified associates will have an ID verify icon such as Yellow metal supplier.

---------------Alibaba. com customers online repayment is secured with Escrow, with Escrow the privacy of the buyer is guaranteed, buyers have the ability to pay safely without revealing their details and repayment is only released after delivery conformation. Alibaba. com also offers a associates reputation message board whereby buyers are able to track record of the suppliers before performing a trade.

-------------------It also offers an about me webpage, while suppliers can express themselves through their own personal page.

-------------------Listing solutions, listings displayed on Alibaba. com online marketplaces cover a range of products and services in various industries including apparel, chemicals, telecommunication and many more

--------------------Moreover, Alibaba. com has a trade director whereas purchasers and suppliers can talk and operate instantly. Suppliers using the trade manager can send product photos or record of any size in an instant. Alibaba. com has after sales services such as a warrantee program whereby potential buyers get up to a one year warranty in case of a malfunction, this mostly identifies the electronic digital products.


Determining a product's price is a crucial marketing technique. A product's price has to be high enough to cover the full total cost of producing the merchandise yet not too much so that it discourages potential customers from purchasing the merchandise. (Edward, 2008) Alibaba Groupings has adopted lots of costs strategies such as;

-------Competition rates is setting a price in comparison with competitors. Alibaba Groupings uses competitive rates so the price they give does not have an extreme difference with its competitors. The company offers low prices yet good quality product such that it can entice the targeted market.

------Product line costs involves costs of different products within the same product range at different price things. Alibaba Organizations has variety of similar products at different prices with respect to the suppliers. Suppliers give you a range of similar products at a competitive price. Potential buyers can have a broad choice when they need to acquire products.

-------Penetration rates is when a business sets a minimal price to increase sales and market talk about. Alibaba Groups emerged as a leading B2B company due to the price they offered to the customers. It used a penetration prices by imposing low prices to the range of products the suppliers offer.

------Discount is another way of prices utilized by Alibaba Groups. The business chose this technique because it stimulates sales as well as retaining customers. Savings by Alibaba, receive to customers when they buy products in large and during festival times. Some suppliers apply the BOGOF (buy one get one free) method.

--------Value-added services is also one of the pricing methodology that Alibaba Groups has applied; whereby the merchandise is offered at less price however the services money accumulate the purchase price such services include shipping and delivery charges, fast delivery, guarantees, warranties, custom design and many more. Alibaba Groups uses this technique to ensure that the full total cost of the products together with the value added services is more than the production cost so that the company can earn profit.


Promotion is a term used to spell it out the advertising, campaign, publicity and advertising of something or service. Campaign is aimed at creating consciousness about the organization's products to the prospective market. Promotion can be divided into two distinct categories; face to face retailing and advertising, promotion and promotion. (Kotler, 2004)

----------------Alibaba. com uses the internet marketing strategy because internet is the best cost effective and fastest promotion tool in the export/import market place. The occurrence of alibaba. com company profile and product/services in major se's like yahoo gives the company a worldwide visibility and creates understanding among potential buyers/importers effectively. The availability of internet banners about alibaba. com that take the searchers immediate with their main website.

-----------------Media advertising is very useful to large number of companies that are familiar to the increasing competition in the present market. Alilbaba. com uses the press advertising strategy to promote its products and services through papers, TV and print ads and also car advertising. Alibaba. com uses various plan taglines throughout their promotions. Example of taglines used are such as; "Think it is. Make it. Sell it, " "Draw up your business plan. Lock down your prototype.

-----------------Get on Alibaba. com to make it work. " these taglines promotes struggling entrepreneurs plus they have a tendency to reach a big number of customers. Media advertising is mostly practiced when the business wants to improve promotional prices or kick off new services/products.

----------------Alibaba. com in addition has advertised its product/services through sponsoring of occasions. Alibaba. com has sponsored occasions such as Australia-China Business Week, this is a high account business event and it was Alibaba's first sponsorship offer in Australia. Alibaba. com has also sponsored other situations like Beijing Olympics and ping-pong.


Place identifies a general principle describing how the product will get to consumers. Place includes all of the targeted market retailers and distribution techniques needed to deliver the product for sale to consumers. The route of distribution includes the logistics, wholesalers and other intermediaries. Efficient circulation is very essential in reaching the business's marketing goal. (Hutt, 1997)

There are numerous kinds of route intermediaries; Alibaba Groupings uses the internet as its intermediary. The internet has a geographically disperse market therefore niche products will be able to reach a wider audience. Alibaba Categories has several online B2B marketplaces that potential buyers and suppliers from across the world can obtain its products and services. The following are websites made available from Alibaba Organizations as its main distributing channels;

www. alibaba. com - An English- language current market which is the global trade market for exporters and importers thus achieving the whole world. , www. alibaba. com. cn -A Chinese local software industry for China. It really is mainly for Chinese speaking customers. , www. alibaba. com. jp -A Japan- language market which helps trade to and from Japan.

Other B2B sites made available from Alibaba Groups in 6 non- English language variations which can help indigenous dealers source products online easily are; Spanish: http://spanish. alibaba. com/, German: http://german. alibaba. com Italian: http://italian. alibaba. com/ France: http://french. alibaba. com/ Portuguese: http://portuguese. alibaba. com/N Russian: http://russian. alibaba. com/

Alibaba Categories also uses the direct distribution channel to provide its products and services. It has a number of stores in countries like China, U. S. A and UK. Services like gold membership, customer issues and many more are treated in these outlets

Distribution is one of Alibaba. Com function such as company activities that produce the product open to the mark market. Alibaba use different channels to ensure that product is available where is necessary Alibaba give attention to distribution stations like inventory, locations like supermarkets and hypermarket, logistics and travel also warehousing. --------------The best of Alibaba. com syndication: is a internet site that facilitates trades between importers and exporters surrounding the world


Increased profits: Retailing goods and services to a market the company never had before boost sales and raises revenue

Enhanced home competitiveness : Alibaba companies become competitive in the home market before they project in the international area. Being competitive in the home market helps companies to acquire some strategies that can help them in the international market segments.

Gain global market shares: By heading international, companies will participate in the global market and gain a piece of the huge international marketplace.

Lower Per Product Costs and Sell excessive production capacity: Alibaba acquiring an additional international market will usually expand creation to meet foreign demand. Increased production could lower per product cost

Recommendation :

--------- Alibaba should find information on overseas markets to lessen difficult and time-consuming than finding information and analyzing domestic market segments. In less developed countries, because reliable information on business methods, market characteristics may be unavailable or very limited.

--------- So it's better Alibaba to find information on the international market to get easy information about the market and reduce time consuming.

---------- For the promotion Alibaba should use other advertising tools like general public relationship and other ad multimedia to increase high awareness of their product rather than focusing on online because online can communicate information about Alibaba but majority cannot get the information so using general population relationship Alibaba will have high performance than the existing situation


The four Ps of the marketing strategies have contributed to the success of Alibaba. com. The company has applied all the four strategies in-order to go to the right route. Alibaba. com has been able to emerge as a grand business to business site where customers can easily obtain products and services from the wide range of products available. While using the marketing strategies Alibaba. com has been able to attain the targeted customers and rewarding their needs/needs accordingly.

However the author would recommend that Alibaba. com should improve its buyer's security level by discovering unreliable suppliers who rip-off customers. Alibaba. com should focus on more on safe payment methods such as Escrow and notice of credit whereby the risk is evenly shared between your buyer and the dealer. According to Jack port Ma "customers are everything", therefore to be able to improve the service levels client satisfaction should be performed by giving customers with the best services.

Generally Alibaba. com is till on the proper way more a mind of its competition because Alibaba. com has effective marketing strategies

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