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stories_alibaba

Alibaba – Factories for Hire

COUNTRY: China    |   MAIN TREND:Always Available    |   WEBSITE: www.alibaba.com

stories_alibaba
CUSTOMER EXPERIENCE: Access manufacturers from anywhere, and distribute products everywhere.

 

breakthrough

 

Alibaba.com is a global online 24/7 trade platform for small businesses, buyers and suppliers on almost all types of products or services. Initially focused on China, Alibaba.com not only expanded its connection between Chinese suppliers and international traders, but also amongst other traders worldwide. Registered members go online to post or see the listings and make purchases. Buyers can post buying needs while suppliers can post up to 50 products online for free. Suppliers increase buyer confidence with a verified company profile and are responsible for delivering items sold. Alibaba.com empowers small businesses to access this network of B2B traders which was previously dominated by big trading companies.

WHAT WAS THERE BEFORE? In traditional B2B trading, importers and exporters build relationships through face-to-face meetings which can be time-consuming and can limit access for better options. The import and export industry is dominated by big trading companies which becomes a challenge for small businesses to enter.

WHO NEEDS IT? Importers and exporters looking to do domestic trade in China, international trade, or a transaction-based wholesale platform geared for smaller buyers seeking fast shipment of small quantities of goods. Small and mid-sized companies who need larger orders or highly customized goods and are looking to build and expand their business.

IMPACT: As of January 2016, Alibaba.com has more than 400 million registered users in more than 240 countries and regions, with a daily average of concurrent users reaching more than 4 million. In the fiscal year ending March 31, 2016, the Alibaba.com recorded a revenue of almost $14 billion dollars in online shopping sales. Alibaba’s strong influence can be seen as its combined trading statistics is used to predict China’s domestic trade and export volumes in the next three to six months.

 


 

COMPANY “AHA”: By using the Internet to streamline the process, we have created a global marketplace for small and mid-sized companies to do business-to-business domestic and international trading.

 

trends

  • Changing Lifestyle: China’s rapid integration into the global economy has brought one-fifth of the global population into the world trading system thus becoming the manufacturer of the world. Large number of low-cost producers and suppliers were entering China while buyers from all over the world lined up to profit from low wages and manufacturing costs.
  • Access to Information: Through Alibaba’s online platform, businesses are able to access other companies’ information even if they are a million miles apart.

 

human needs

  • Convenience: Buyers are constantly looking for ways to expand its business while suppliers are looking for new clients. Alibaba.com makes it easy for small businesses to find the best buyers and/or suppliers with whom to do business around the world.
  • Maximizing Wealth: Given that the Internet is growing and international trade increasing, more and more businesses are going online and looking for ways to grow their business.

 

business model

  • Middleman: Alibaba functions as a middleman for suppliers from all over the world to find appropriate buyers and vice versa. Fees are charged for performing services for the suppliers.
  • Trust Pass: Gold Supplier members increase buyer’s confidence. Eighty-five percent of buyers prefer to do business with verified suppliers. Suppliers from China are required to be a Gold Supplier.

 

barriers to entry

As the first mover, Alibaba was able to establish a global reputation as a major player in bringing buyers and suppliers together in cyberspace by creating a critical mass that makes it difficult for competitors to copy. Alibaba has a network of over 400 million registered global users. Alibaba has also established partnerships with channel sales partners, trade associations, trade shows, third-party trade service providers, credit card and financial service companies and logistic and freight forwarding service companies.

 

Credit: Connectivate! Companies Innovating in New Ways to be Always Available by Hitendra Patel, Ronald Jonash, Steve Wyatt and Victor Fernandes

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