Alibaba.com

Introduction

An online business-to-business(B2B) commerce and auction company based in Hong Kong, Alibaba.com has developed into a substantial resource for both Asian businesses and Western corporations. Alibaba was originally designed to connect Chinese businessmen with Western buyers and hence, manages a bilingual format that both Chinese businessmen and English speaking businesses can use to execute trades.

A straightforward wholesale marketplace, where member vendors can display wares and prices, Alibaba dominates the Chinese ecommerce market and is a major player for some import-export markets on an international scale.

Background

Headquartered in Hong Kong, Alibaba.com Corporation was founded in March 1999 by a team of Chinese Internet pioneers led by Jack Ma. The concept behind the website was simple: build a meeting place between suppliers and buyers around the world. Bring the concept of a trade show to the online world where distance is not a boundary and business is open 24/7.

Since the launch of Alibaba Group, five e-commerce sub-companies which operate different aspects of trading have emerged. They are namely:

1. Alibaba.com: English language global trade website serving small and medium-sized enterprises(SMEs).
2. Taobao.com: Online auctions web site for customers.
3. Alipay: Online payments web site, processing mainly payments within China.
4. Alisoft: Provider of web services to the Chinese SMEs.
5. Alimama: Online advertising exchange, which allows web publishers and advertisers to trade online advertising inventory.

Key Characteristics

• TradeManager
  

For ease of trading, Alibaba.com have acquired the use of TradeManager, an external software. It enables efficient communication between the buyers and suppliers and is available for download free-of-charge.

With TradeManager, the buyer is able to control his trade communications. He is able to talk the supplier of his choice as and when required. In this way, the buyer has the power to find reliable suppliers and negotiate on the terms, without face-to-face pressure.



Secondly, the buyer is able to obtain up-to-date information with Trade Alert- Alibaba's customized product email notification, whereby selling leads and quotations are delivered instantly.



Also, with TradeManager's live audio and video functions, the buyer can see and hear live product presentations.



In addition, easy-to-use archive functions allows storage of messages.



Lastly, documents and photo files can be sent, irregardless of size.



Similarly, suppliers can too undertake the same steps to gain real access and control to communicate and search for their buyers.

Hence, all that both parties have to do to ensure fast and efficient trade is to be online!

• Community

As part of their efforts to aid effective conduct of transactions, Alibaba.com have instilled a self-help option consisting of forums, a major platform for know-how, and trade articles.





Under the tab of Safe Trading, there are even case studies and customer support to further satisfy the needs of buyers and suppliers.




Features

• Payment Scheme

Buyers and suppliers are required to join as a member, for free, before being able to conduct any transaction or make any enquiry. Upon the successful confirmation of a deal, there is a variety of options for the buyer to make his purchase, depending on the policy of the supplier. The options available include telegraphic transfer(TT), letters of credit(L/C), documents against payments(D/P), Escrow and PayPal.

• Shipping

A variety of shipping methods is also available due to the wide range of industries dealing within Alibaba.com. Buyers may choose between air shipping or sea shipping and decide on which shipping agent to liaise with. The shipping agents available include DHL, China Post and FedEx.


Strengths

• Translation

The ability to translate the page, in English, to 9 other languages such as Italiano, Japanese and Chinese. As one of the largest B2B e-commerce player in the industry, it is crucial to reach out to buyers and suppliers on a global basis. Hence, it is useful for Alibaba.com to be equipped with this function to better answer the needs of its growing clientele.

• TrustPass

An upgrade from the free membership, TrustPass membership offers additional perks like 100% access to buyers and allows buyers to verify the legitimacy of the supplier.

• Live Help!

In order to provide assistance to all its users, Alibaba.com has a Service Team to answer questions online via TradeManager.



This feature is unique and provides Alibaba.com an edge over competitors like TradeXpro and ECVV.com.

• Categorization

A format not uncommon to e-commerce websites, Alibaba.com offers a quick browse of products available via classifications such as Apparel, Energy and Transportation.




Weakness

• Cluttered front page

First impressions are important and a messy layout of the front page may daunt first-time users. Despite the usage of boxes and sub-headings, the array of information seems too much to absorb at one go.

• Lack of global reach

A weakness that is not unique to Alibaba.com, the lack of websites based in other countries(besides Japan) may prove to be a stumbling block in the growth of the organization. Other business models such as that of business-to-consumer(B2C) have expanded globally, establishing websites in major markets. Examples include eBay and eBid.


Critical Analysis

Belonging to the category of third-party exchanges that are neither buyers nor sellers, Alibaba.com is a successful model of business-to-business e-commerce. As possibly one of China's first Internet company, Alibaba.com did well to set a standard for small and medium enterprises(SMEs) to conduct transactions on an online platform.

Besides maintaining a relatively easy-to-navigate website and providing self-help forums, Alibaba.com engaged the usage of application softwares like TradeManager to ensure efficient and effective conduct of transactions. The adoption of TrustPass also helped to develop a sense of trust between the buyers and sellers. These steps undertaken by Alibaba.com are crucial to its success and very much commendable, as it is one of the first movers in the market.

Yet, despite the many plus points, Alibaba.com may not be the first option that comes to the minds of buyers or suppliers. This may be mainly due to the lack of advertising, until recent years. Also, many SMEs may not be Internet-savvy enough to handle the complexities of Alibaba's system.

Overall, Alibaba.com is a role model for budding B2B businesses with its innovation and highly differentiated service deliveries. It have certainly come a long way in serving as an online platform for SMEs, although there is still room for improvement.