The purpose of this industry market analysis is to explore Alibaba.com, an internet-based company that provides platforms for consumer to business transactions. The e-commerce industry has become highly saturated however there are only a handful of leaders in the industry including Alibaba. Alibaba’s unique business model is designed to create an ecosystem within e-commerce. Thus, cutting operating costs and reaching a larger demographic. Despite its competition, Alibaba is the leading e-commerce company in China and is expected to continue to grow exponentially.
Alibaba (BABA), is an e-commerce business based in China. The company was founded by Jack Ma in 1999, and is owned by an investment firm called The Alibaba
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Alibaba’s unique business model has made it the leading e-commerce platform in China and in their efforts to globalize have threatened United States online retailers such as Amazon (AMZN) and EBay (EBAY). Alibaba went public on the New York Stock Exchange (NYSE) on September 19, 2014. Their debut at the NYSE set a world record for the biggest initial public offering (IPO) ever made, raising $21.8 billion in one day. At the time of its IPO, Alibaba was valued at $168 billion, more than Ebay and Amazon combined (CNN, 2015). Alibaba’s 2015 fiscal year revenue totaled $12.43 billion, a 46.12% increase from the previous year (Hoovers, 2015a). On November 11, 2015, the Global Shopping Festival generated $14.3 billion of GMV for Alibaba, this day is the international equivalent to black Friday or cyber Monday (Alibaba, …show more content…
Chinese e-commerce companies alone do not pose a threat to Alibaba, because of Alibaba’s unique business model and its cost saving strategies. Therefore, a few Chinese companies have built an alliance against Alibaba including Jd.com and Tencent. Jd.com’s partnership with Tencent poses a threat to Alibaba due to its location; they are all based in China. Together, Tencent and Jd.com are able to reach customers and influences their shopping decision via the popular application called WeChat. WeChat is popular among millennial which make up a large portion of the consumer population and are major influencers on social networks (Hoovers,
Amazon.com operates in the Online Retail Industry. The sector is one of the fastest growing globally and is outperforming the ordinary retail marketplace. It was created after 1995 and it was only the Internet that made it possible for such an industry not only to be established but to become one of the most flourishing sectors in the business environment. What is interesting is that Amazon.com, together with eBay is the pioneer in the field. Both companies were launched in 1995 and are still extremely successful. The creation of e-mail in 1996 had a huge impact on the development of online retail by introducing a fast and easy way to communicate with customers. For this two-year period Internet usage doubled annually, thus, allowing for the expansion of the industry. Google is launched a year later, in 1998, only to become the most used search engine in the world and an essential partner for the online retailers by helping them tailor their websites to customer’s personal preferences and by advertising. After that, more and more people see the opportunity in the growing industry and enter it. By 2001 there are more than 513 million Internet users globally, which calls for action in terms of creating regulations and laws to protect the users and personal property. In 2003, Apple launches iTunes, and provides a platform for low-cost digital downloads. Another major change is the appearance of social media from 2004, which is one of the biggest influencer on the state of the industry. With the launch of iPhone in 2007, this trend strengthens as people get to enjoy the Internet anywhere they want to. From then on, technological advancements have made it extremely easy and fun to shop online, making it ...
Groupon and Living Social are websites that assist in driving consumer interaction by advertising deals to potential consumers via their website and app (Gil, 2018). Groupon has about 70 million subscribers which is a huge platform for a company to get spread reach more customers without having to use multiple commutation outlets (Brown, 2011). Groupon works by taking a 50% commission on the product or service that customer choses to post on their site (Gil, 2018). Historically, consumers have used the internet as a vehicle to do research on products and services but then they go to the store and make the purchases from there (Tuten & Solomon, 2013). Groupon would fall into the social shopping category in that consumers can interact with others
Market structure breakdowns into various categories based on the number of sellers, type of products, and the level of market penetration. In the online streaming industry, Netflix is categorized in a monopolistic competition market. As Irvin Tucker (2010) defines, “monopolistic competition is a market structure characterized by (1) many small sellers, (2) a differentiated product, and (3) easy market entry and exit” (p.268). By using t...
The increased interest of social media usage has led numbers of company and business to provide new experiences for their customer to leverage media platforms to make more efficient and effective purchases (Rad, 2010). In addition, the emergences of Web 2.0 technologies are dramatically changing the web collaboration concepts, which made the web more social and interconnected. The aforementioned phenomenon is called “social commerce”. It is a subset of electronic commerce, which utilize social media, or online media that support interaction and user contributions to enhance the online purchase experience.
A little more than 10 years ago, China’s path to e-commerce leadership would have been difficult to foresee, even as the tech boom in the US and other markets saw the development of e-commerce as an important B2C and C2C channel.
The eMarketing space consists of new Internet companies that have emerged as the Internet has developed, as well as those pre-existing companies that now employ eMarketing approaches as part of their overall marketing plan. For some companies the Internet is an additional channel that enhances or replaces their traditional channel(s). For others the Internet has provided the opportunity for a new online company.
Tsuruoka, D. (2014, January 9). Amazon’s third-party retailers sold over 1 billion items in 2013.
WeChat, unlike its main competitor WhatsApp, has developed a platform where its users can chat, shop, play games, meet new people, and even do banking. In China, it is the number one app for messaging, and voice services. This is a big bonus for WeChat, as China is the world’s biggest telecom market. Apart from China, it is making progress in penetrating the Asian and South African markets. WeChat has started expanding into Europe, U.S and has launched a multimillion-dollar advertising campaign, which would cover India, South Africa, Italy and Spain.
When an individual decides to venture out on their own and become an entrepreneur they are taking a huge risk, one of the tools that can make the difference between being successful or failing is the Business Model Canvas (BMC). Osterwalder invented the BMC because he believed that a company’s first business plan always failed the minute it reached the customers, leaving the owners discouraged and deflated and feeling that they had wasted time, energy and money; so he wanted to create a more flexible business plan that owners can edit and make the changes needed to reach the customers needs "One Tool Startups Need to Brainstorm, Test and Win | First Round Review," n.d.). The canvas consists of nine elements or building blocks that create a visual template spelling out the business’s value proposition, infrastructure, customers and the finances (White, 2012). Breaking down the key elements that are vital to taking customers needs, wants or problems into a fruitful company
The basic assumption of Jack ma is that he provides efficient business to business solutions through e-commerce to Small Medium Enterprises (SMEs) in China. In the recent year, Alibaba group has claimed the record for the largest US-listed initial public offering and has
The future of economic competitiveness for most enterprises relies on entrance and active participation in the e-commerce market. An essential problem with e-commerce is that the controls and organization are different for each site. There is no standard way of building t...
Flipkart an e-commerce website has grown to be India’s most valuable e-commerce company. A company that started with a mere investment of Rs.4,00,000 has now earned it self a valuation of more than USD $1billion. Flipkart was founded by Mr. Sachin Bansal and Binny Bansal, alumni of Indian Institute of Technology Delhi, in October 2007 who quit working for Amazon and started their own journey into the e-commerce field by starting India’s very online retail website. Both Sachin & Binny were techies and found their jobs unsatisfactory, and being tech experts they didn’t want to deal in marketing and sales. So they decided to create e-commerce website engine comparators and found that there weren’t many websites that could provide everything to the Indian customer and that is how they found their opening in the e-commerce platform market. They wanted to name their website something which indicated
The Internet has become a major tool for communication and access to information for over two and half billion people (Wright 121). Although Internet has become an unavoidable reality that is consuming our planet in a web of information. This process is being shaped by our actions and choices which ultimately drives us together (Deibert 11). Nowadays China has over 538 million netizens, the world’s largest online community (Feng & Guo 335).
Entrepreneurs use the service differentiation strategy to offer exceptional service better than other competitors, in order to obtain an improvement of customer satisfaction. Chenet et al. (2010) found that service quality had an impact on trust, differentiation and good relationship outcomes. Moreover, service differentiation has an important impact on a business in respect of service quality, trust and client commitment towards the firm. Social media can be used as a technology of business to deliver excellent service to customers. For example, social media, such as Twitter, is a channel where customers expect quick responses. As a result, businesses dedicate full-time employees to the service job of responding to customers and potential customers on Twitter. Fogg and Iizawa (2008) presented the argument that businesses use the Facebook service to persuade users to take quick action with comments. Importantly, Kandampully (2002) proposed that businesses interact with their customers and business partners using technology to provide services instantaneously across international borders. Based on the above discussion, the following hypotheses are
In today's competing world, many organizations are rethinking their strategies in terms of the online business and its capabilities and culture. Organizations are taking advantage of the widespread web to buy and sell goods from other companies and recently from individual customers. Exploiting these opportunities of convenience, availability and widespread reach of the web or Internet, many companies such as Amazon have benefited from the use of web successfully.