A BRIEF STUDY ON ALIBABA GROUP AND

JACK MA

CHANDRAGUPT INSTITUTE OF MANAGEMENT PATNA

BY

AAKASH ARUN

ABHISHEK BHARTI

ABHISHEK KUMAR 1

ABHISHEK KUMAR 2

ADARSH

ADARSHA CHAUBEY

AKASH DEEP

VIVEK RANJAN

CHANDRAGUPT INSTITUTE OF MANAGEMENT PATNA

 History and Background of the company

Alibaba Group was built up in 1999 by 18 individuals driven by Jack Ma, a previous English
instructor from Hangzhou, China. From the beginning, the organization's authors shared a
conviction that the Internet would even the odds by empowering little ventures to use
advancement and innovation to develop and contend all the more viably in the residential and
worldwide economies.

Since propelling its first site helping little Chinese exporters, makers and business visionaries
to sell universally, Alibaba Group has developed into a worldwide pioneer in on the web and
portable trade. Today the organization and its related organizations work driving discount and
retail online commercial centers just as organizations in distributed computing, computerized
media and amusement, advancement activities and others.

In October 1999, Alibaba got a US$25 million speculation from Goldman Sachs and
SoftBank. Alibaba.com was required to improve the household web-based business market
and flawless a web-based business stage for Chinese undertakings, particularly little and
medium-sized ventures (SMEs), to help send out Chinese items to the worldwide market just
as location World Trade Organization (WTO) challenges. In 2002, Alibaba.com ended up
beneficial three years after dispatch. Mama needed to improve the worldwide online business
framework, so from 2003 forward, Alibaba propelled Taobao Marketplace, Alipay,
Alimama.com, and Lynx.
 About Leader Jack Ma

Jack Ma was born on 10 September 1964 in Hangzhou, Zhejiang, China. He started

concentrating English at a youthful age by chatting with English-speakers at Hangzhou global
lodging. He would ride 70 miles on his bike to give vacationers voyages through the territory
to rehearse his English for a long time. He progressed toward becoming friends through
correspondence with one of those outsiders, who nicknamed him "Jack" since he thought that
it was difficult to pronounce.

Ma applied for 30 different jobs and got rejected by all. "I went for a job with the police; they
said, 'you're no good'", Ma told interviewer Charlie Rose. "I even went to KFC when it came
to my city. Twenty-four people went for the job. Twenty-three were accepted. I was the only
guy rejected. articulate his Chinese name.

It takes an uncommon individual to amass an absolute total assets over $20 billion through a
committed hard working attitude while keeping up a feeling of viewpoint. Jack Ma is one of
those individuals. The originator and CEO of Alibaba, one of the world's driving internet
business web-based interfaces, is one of the world's most extravagant men, yet he has not
given achievement a chance to cloud his vision for the future or his affirmation of where he
originated from. Jack Ma's keys to progress are valid and rousing for everybody from hopeful
extremely rich people to proprietors of the littlest organizations.

In 2017, Fortune ranked Ma second on its World's 50 Greatest Leaders list.

Industry Overview

E-commerce industry has watched a significant growth, and is growing day by day. Today
consumers need huge motivation to visit a shop, all thanks to e-commerce for making life a
bit lazier. All the FMCG, electronics goods, personal care, fitness equipment and fashion
wear are available online. Mobile phone brand like MOTOROLA, Mi, Oppo, Vivo and
OnePlus, etc launch their product first on these platforms. Company like Flipkart, Amazon,
Myntra, eBay and Alibaba make most of it by just acting as channel to sell the product and
not manufacturing any of it. The E-commerce market is expected to reach US$200 billion by
2027 from US$ 38.5 billion in 2017, while the overall e-commerce market is projected to
grow at an approximate CAGR of 10% from 2016 to 2024. In china Alibaba is a tech
juggernaut and listed as the top e-commerce company. It recorded a net profit of 87.6 billion
yuan and consists of approx. 58% of total sale in china online market. (see exhibit for Market
share, earning and growth comparison with other companies in china and international.)

Philosophy of the Company

They saw, they analysed, they planned and they conquered the market. The Alibaba group
lead by Jack Ma and his team started in this apartment to become the largest e-commerce
company in china and now expanding globally. Alibaba is driven with mission to make it
easy to do business anywhere. We operate leading online and mobile marketplaces in retail
and wholesale trade, as well as cloud computing and other services. We provide technology
and services to enable consumers, merchants, and other participants to conduct commerce in
our ecosystem. Its vision to build the future infrastructure of commerce. We envision that our
customers will meet, work and live at Alibaba, and that we will be a company that lasts at
least 102 years.
 Hunt for Leader / Grooming a new leader

Handing over to Jonathan Lu Zhaoxi as new CEO. Ma announced stepping down to make
way for a younger crop of leaders at firm in January, 2013. Lu joined Alibaba in 2000 after a
year it was founded, and has led various key divisions, including Alipay the online payment
service. He has been working for 13 years with Ma and has faced extremely challenging and
difficult job with him. In an e-mail to employee Ma wrote “Jonathan has impressed with his
curiosity and ability to grasp new ideas, his judgment and decisiveness, and his strong
execution capabilities.”

Incorporating his thoughts to employee, Jack Ma surrounded himself with successful and
valuable people. His approach was to empower those successful people within his company
and allow them to control and develop the business in accordance with his vision.
Additionally, he created a culture of participation, energy, and fun. This allowed Alibaba to
retain loyal and hardworking staff that would ultimately build the success of Alibaba.

Testing the new leader, In 2004, when Mr. Lu was the head of Alibaba.com’s Guangzhou
sales team, Mr. Ma flew in from Hangzhou and asked him to help launch Alipay, an online
payment system that Alibaba was preparing. After several years at Alipay, Mr. Lu was again
asked by Mr. Ma, with only a few days' notice, to run the Taobao business.

The announcement in Jack Ma style, When Alibaba celebrated the 10th anniversary of
Taobao in May, Mr. Ma, sporting a black hat and a shiny silver jacket, sang two songs in
front of 40,000 people at a football stadium. “Taking over from Jack Ma is a difficult job,”
Mr. Ma told the audience. “All of you trust and support Jonathan just as you have trusted and
supported me.”

Jonathan Lu as CEO of Alibaba group year 2013. In his first interview as CEO Lu said that
Alibaba could make an initial public offering at any time but that "there's no timeline or
date.”When we do business, we have to rely on our instincts and our sense of smell," he said.
"When Jack saw the financial crisis coming, he smelled it. Adding to it he said, “A lot of the
time, what Jack says is what I have been thinking,” The difference is in how we express
ourselves. (The wall Street Journal)
 Traits of Jack Ma

Jack Ma is an inspirational and fascinating leader. He can be easily differentiated from

common crowd, as he has the traits of a positive leader. He is people oriented and appreciate
positive attitude of employees. Basically, an optimistic attitude leads to better productive and
in order to keep his employees happy, therefore, he focuses on their objective and then he
puts them under one umbrella and that is a common goal for which all of them work hard.
Jack is self-confident, determinant, optimistic, inspirational, fascinating and most importantly
a creative leader. He showed his creative intelligence at the time he introduced the online
platform for the individuals and businessmen to identify their customers named Alibaba. He
also introduced a digital payment portal named Alipay, which was a great service provided to
the customers and the sellers that made the method of payment more convenient.

He was curious and open to new changes that was required in order to achieve certain goals.
He was focused and had the clarity as well which helped him in bringing growth in his
business, Likewise, he expanded his business from B2B market to B2C and C2C market. His
confidence level can be measured by the number of times he has been rejected and even, he
stood up and was ready to fight for the next opportunity. Alibaba did not make any profit for
the first three years of its’ establishment but somehow the foresightedness of Jack Ma kept
him motivated and his creative ideas helped him in making the situations better.

Jack Ma is social, he has a great network and he also believes that having a good networking
can innovated shoulders of giants. He also believed that technology can be a platform for an
entrepreneur to become successful. He surrounded himself with the most creative and
intelligent people. He is a great risk taker, he took a risk to challenge the status-quo of the
corporate governance. According to him, complaints can be opportunities in disguise.

He is a proactive leader who has always been involved in various skilful activities. At the age
of 12 he used to ride on his bike for 40 minutes daily so that he could learn English as he was
not satisfied with all that he could learn from books and his English teacher. He used to guide
the foreigners as well while he used to practice English language and telling them about the
western culture.
He invited 17 of his friends for proposing the business idea but one was with him in the
execution. In spite of not getting good support he did not gave a second thought and started
the Alibaba website.
 Major achievements of Jack Ma

According to Forbes 2016, Jack Ma has the worth of $25.8 Billion with the 33rd richest
person in the world, 22nd most powerful person in the world, 2nd richest person in China and
7th richest man in the technology industry. According to Forbes 2016, Jack Ma has also
invested in many industries such as in movies like the “Mission Impossible – Rogue Nation”.
Also formed an online portal with the “Marcy’s” which is based on US base departmental
store. Jack Ma possess the various quality of leadership. As they are:

When Jack Ma first visited the USA and had got the knowledge about the internet at that time
he made a search for bear and didn’t found a Chinese page. As a result of that, he decided to
develop the one. Whereas his first attempt failed after that he returns back after the four years
with a bigger and bolder approach, which was converted into a big success and the result is
today i.e. Alibaba. Thus, he is a great visionary where he always seeks the good in bad
conditions.

He had also said that “the best investment is investing in the youth.” When people are around
him, he doesn’t just “give them bread,” instead of bread he also learns them how to make a
bakery and make as many breads as they want.” He is also a great coach for all his staff and
the people around him. This also is reflected in his advisories roles across different
corporations in the world.

Jack Ma, who did retry countless times for the admission and the job. He tried college
admission on two occasions without success and then passed on the third one. He had
rejected countless times for job positions and also rejected 10 times by Harvard and he also
even failed in the first adventure of China pages. Thus, he is perseverant by nature. His
famous quotation “Never give up, today is hard, tomorrow will be harder and the day after
tomorrow will be sunshine” has always made him committed to his work and professional
life. This was the only reason which had turned a person from $12 monthly earning to a
billionaire and one of the most influential man around the world.
 Challenges

Challenges Faced by Alibaba during its’ evolving period:

 Few fully utilize Internet and e-commerce: ICT not used in sales prospects or
purchasing efficiencies.
 Lack of online payment logistics: Perceived difficulties in introducing online
financing and payment, and customs collection and taxation applications.
 Lack of trust on demand side.
 Lack of awareness even TPOs: Less than half TPOs canvassed indicated a specific e-
trade component in their national export development strategies.

Possible solutions to overcome these challenges:

 Few fully utilize Internet and e-commerce

 Online market research
 User forums/ knowledge sharing
 Robust global online company database
 Lack of online payment logistics
 On-Offline partnerships (introducing relevant third party services in the export
value chain)
 Lack of trust on demand side
 Introducing trust building mechanisms (authentication and verification,
inspection services, etc)
 Lack of awareness even TPOs

Public-Private partnership (TPOs/TAs/Os) to support e-commerce

 Turning Point of Alibaba

I call Alibaba "1,001 mistakes". They expanded too fast and then in the dot-com bubble they
had to have layoffs. By 2002, they had only enough cash to survive for 18 months. They had
a lot of free members using their site and they didn't know how they would make money. So,
we developed a product for China exporters to meet U.S. buyers online, this model saved
Alibaba. By the end of 2002 they made $1 in profits each year they improved. Today,
Alibaba is very profitable.

The lessons Jack ma learned from the dark days at Alibaba are that you've got to make your
team have value, innovation, and vision. Also, if you don't give up, you still have a chance.
And, when you are small you have to be much focused and rely on your brain not your
strength.

After this problem company recovered himself with great effort.

Going public is an important milestone for Alibaba, the time was right Their B2B Company
is established, market conditions are healthy and management is strong. The reception proved
a mainland Chinese company can list in Hong Kong and still get a very strong valuation and
global investor interest.

Jack Ma vision is to build an e-commerce ecosystem that allows consumers and businesses
to do all aspects of business online. They are going into search with Yahoo and have
launched online auction and payment businesses. He wants to create one million jobs change
China's social and economic environment and make it the largest Internet market in the
world.
 GOING GLOBAL & INTERNATIONAL SUCCESS

Expanding in overseas markets remains an uphill battle for many Chinese companies who
often struggle from a lack of brand recognition and some consumers’ misgivings about the
‘Made in China’ label. However, Chinese brands are more global today than they ever have
been. Ever since its IPO in 2014 – the largest in history – the trajectory of one Chinese
company in particular, Alibaba, has captured headlines around the world. The Chinese e-
commerce giants deal size was valued at a whopping $21.7 billion when it went public on
September 19, 2014. Alibaba’s IPO is not only the biggest U.S. IPO in the last decade, but it
is also still the largest IPO in the world. Shares were priced at $68 per share and opened at
$92.70 before closing their first day of trading at $93.89. The stock fell 3% one year after its
IPO but has surged over 161% since going public. Having changed the face of e-commerce in
China, its sales and profits now exceed those of Walmart, eBay, and Amazon combined. With
its sights firmly set on becoming China’s first truly global company

AliExpress, an e-commerce arm of Alibaba that sells products from Chinese

retailers to customers in 150 countries, was setting up operations to allow retailers from those
countries to sell their goods to customers in their home markets and other markets
internationally.

 The move is part of a “broader globalization strategy,” according to Trudy Dai, the
president of Alibaba’s wholesale marketplaces division.

 Alibaba wants to do what Amazon (which in April pulled business operations out of
China) has so far been unable to: Create an international e-commerce marketplace. It’s all
unfolding under Alibaba’s New Retail strategy, which Alibaba president Mike Evans was
brought on in 2015 to expand out into a global initiative.

 Alibaba’s approach to building an international business is two-fold: In developed e-

commerce markets, the company is working to get international brands to sell to
customers in China through Tmall, acting as a “gateway to China,” according to the
company. In developing markets, the approach is to build or buy e-commerce
marketplaces in developing markets and acquire those customers.

According to Evans, Alibaba’s vision is that New Retail is the global future of retail. New
Retail, as Alibaba phrases it, is the company’s strategy to “digitize the entire retail value
chain,” meaning small- and medium-sized brands, physical stores and local and international
sellers all have access to the same data and digital infrastructure that Alibaba uses to operate
its e-commerce marketplace, Tmall. That’s served as the backbone of its international
expansion.
Exhibit
 References

https://blog.csoftintl.com/how-alibaba-going-global/

https://digiday.com/retail/breaking-alibabas-global-ambitions/

www.alibabagroup.com

www.yourstory.com

www.statista.com

www.asian.nikkei.com

www.economist.com

www.businessinsider.in

www.investopidia.com

www.bbc.com

www.wsj.com, (blogs at The Wall Street Journal)