DEPARTMENT OF INFORMATION AND SECURITY

BACHEROL DEGREE IN INFORMATION AND SECURITY

LECTURER NAME : MR. LUCAS NGOWI

SUBJECT NAME : E-COMMERCE

SUBJECT CODE : CTU 07424

NATURE OF WORK : INDIVIDUAL ASSIGNMENT

SUBMISSION DATE : 24-MARCH- 2023

STUDENT NAME : REHEMA. M. MWINYIMKUU

TABLE OF CONTENTS

TABLE OF CONTENTS ........................................................................................................................... 1

QUESTION ................................................................................................................................................. 2
INTRODUCTION....................................................................................................................................... 3
Ecommerce ............................................................................................................................................... 3
What are e-commerce online companies? ................................................................................................ 3
Types of e-commerce ................................................................................................................................ 3
TOP E- COMMERCE COMPANIES ...................................................................................................... 4
What is Alibaba? ....................................................................................................................................... 6
How does Alibaba make money ............................................................................................................... 6
How to increase sales on Alibaba.com with advertising tools?................................................................ 9
What are advertising tools? ...................................................................................................................... 9
Why are advertising tools important?....................................................................................................... 9
Advertising tools on Alibaba ................................................................................................................. 10
Premium Sponsored Ads......................................................................................................................... 11
Key benefits of Premium Sponsored Ads: .............................................................................................. 12
How to Use Keyword Advertising? ........................................................................................................ 13
How to use Premium Sponsored Ads ..................................................................................................... 14
Sell on Alibaba ........................................................................................................................................ 14
REFFERENCES ....................................................................................................................................... 16

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QUESTION
Find a company that either sells products or provides services online (e-commerce).
i. Describe the business model that underpins their online store
ii. Assess their payment methods and pricing tactics
iii. Find out whether they have any programs set up to handle their e-commerce needs. Give
some specifics about the functions that their software provides
iv. Provide some broad suggestions on how they might increase sales and strengthen their
position in the market.

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INTRODUCTION

E-commerce
Is the buying and selling goods and services, or transmitting of funds or data, over an
electronic network, primarily the internet. These business transactions occur either as
business to business, business to consumer, consumer to consumer or consumer to
business.

The terms e-commerce and e-business are often used interchangeably. The term e-tail is
also sometimes used in reference to the transactional processes that make up online retail
shopping.

The development and growing prevalence of technology has created even more ways for
companies and consumers to purchase and sell their products or services. Now, the majority of
shopping occurs online using e-commerce companies. Here I explain what an e-commerce
company is, explore the different types of e-commerce and provide a list of the top e-commerce
companies.
What are e-commerce online companies?
E-commerce companies rely on the Internet and electronic payment methods to conduct
transactions, such as the buying and selling of goods or services. The items that these online
companies sell can be:
i. Physical goods: Many e-commerce companies sell things like clothes, furniture, books or
a number of other physical products.
ii. Digital products: Some companies sell downloads, like e-books, movies that you can
watch online or songs.
iii. Services: There are a number of e-commerce companies that sell subscriptions or services.
This is perhaps most commonly seen with streaming subscriptions that allow consumers to
pay a monthly fee that gives you access to things like music, movies and/or television
shows.
iv. Affiliates: There are some e-commerce online companies that earn a commission by
facilitating sales through affiliate links. These online businesses could be influencer
websites, blogs or company websites that curate goods sold online.

Types of e-commerce
E-commerce companies can operate in a variety of categories, such as:

 Business-to-consumer: Also referred to as B2C, these e-commerce companies sell their goods
or services to individual consumers.

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 Business-to-business: Businesses are classified as business-to-business, or B2B, when they
sell their services or goods to other businesses. These can be wholesalers or companies that
specialize in offering goods or services that help organizations manage their business.
 Consumer-to-consumer: Consumer-to-consumer, also known as C2C, e-commerce
companies develop and facilitate online marketplaces that connect individuals that want to buy
or sell services or goods.
 Consumer-to-business: A consumer-to-business, or C2B, transaction takes place when an
individual sells goods to a business. In some instances, the companies purchasing the items
immediately post and sell them on an online marketplace.
 Where do e-commerce businesses sell their goods or services?
You can also categorize e-commerce companies based on the method they use for selling their
products or services. They often use things like:
 Conversational e-commerce: Social media platforms have made it possible for e-commerce
companies to sell their products from their posts. Using this method, consumers are able to
shop directly from their newsfeed.
 E-commerce marketplaces: E-commerce marketplaces allow e-commerce companies to sell
their goods or services on their platform in exchange for a fee or percentage of sales. These
types of situations eliminate a lot of the need for merchants to market their site or attract online
traffic.
 Branded e-commerce stores: E-commerce companies often own and operate their own online
store via their website. In many cases, these businesses use an e-commerce platform to host
their website and store.

TOP E- COMMERCE COMPANIES

Here are some of the most notable e-commerce companies at the moment:

1. Amazon
Though it started in 1994 as an e-commerce marketplace for books, Amazon has evolved into an
online shopping staple. It's best known for its online marketplace where consumers and businesses
can purchase physical goods, but in recent years it has expanded to offer digital products and
subscription services as well. Namely, you can purchase an Amazon Prime subscription to gain
access to online streaming services, among other things.

2. Wal-Mart Stores Inc.

Like many retailers, Wal-Mart has thriving brick and mortar and e-commerce stores. Most, if not
all, businesses have transitioned to offer consumers the option to purchase their goods and services
online using a branded e-commerce store or in-person. Aside from growing its own online
shopping operations, Wal-Mart has also been purchasing other e-commerce companies, such as
Jet.com.

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3. Alibaba Group Holding Ltd.
Alibaba is a global wholesale e-commerce marketplace that primarily operates in Asia, but its
international presence is rapidly growing. Many consider this e-commerce company China's
equivalent of Amazon.

4. Facebook
Facebook, which owns other companies like Instagram and WhatsApp, may not have an e-
commerce store, but it facilitates online shopping through conversational e-commerce and
affiliates. More specifically, many e-commerce companies pay Facebook to create and run
advertising for their online business. Facebook has also established a consumer-to-consumer and
business-to-consumer marketplace where individuals or businesses can post and sell their products
or services.

5. Microsoft
Microsoft controls companies like Skype, Bing and Xbox, all of which sell software and hardware
to businesses and consumers alike. This influential company makes a majority of its income selling
digital products and services.

6. Apple Inc.
Apple sells physical products, services and digital products through their e-commerce store. Aside
from being able to purchase their phones and computers, they also offer a subscription-based music
streaming platform. Additionally, they operate several e-commerce marketplaces where you can
purchase apps, music and e-books that are formatted for your Apple products.

7. EBay Inc.
This business-to-consumer, consumer-to-consumer and consumer-to-business e-commerce
marketplace is best known for allowing individuals to sell their goods to other consumers. EBay
started out as a sort of auction house where consumers could place bids on used and/or collectible
items. Over time, major brands have begun offering their new products on this platform as well,
most of which are sold at a fixed price.

8. Liberty Interactive Corporation

Liberty Interactive owns several e-commerce companies, including QVC, the Home Shopping
Network (HSN), Zulily and ProFlowers. QVC and HSN may have started as home shopping
television channels, but they have also transitioned to selling their products online through their
branded e-commerce marketplaces.

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9. Shopify
Instead of having a branded e-commerce store or marketplace, Shopify serves as a host where
companies can sell their products or services online. For this reason, it's considered a business-to-
business e-commerce site that sells a service. Shopify charges businesses a subscription fee so that
they can use this platform to sell their goods, track inventory and fulfill orders.

10. Jingdong
Also known as JD.com, Jingdong is a China-based e-commerce marketplace that is very similar
to Amazon and Alibaba.
Since there’s a lot of online companies I decided to go with Alibaba
What is Alibaba?
Alibaba Group was founded by Jack Ma along with 17 other co-founders in 1999 with the website
Alibaba.com, a business-to-business portal with an aim to connect Chinese manufacturers with
international buyers.

Today, Alibaba Group Holding Limited is one of the biggest companies in China that provides
consumer-to-consumer, business-to-consumer and business-to-business sales and various other
services via e-commerce web as well as offline portals. The major revenue earning services include
electronic payment services, marketplace, and data-centric cloud computing.

Alibaba Business Model

Alibaba has come a long way since its beginning in 1999. As of April 2016, It is the world’s largest
retailer surpassing Walmart, with operations in over 200 countries. But what exactly is Alibaba
Business Model? How did it manage to gain such success? For that let us first understand how
does Alibaba work and what all businesses does its own.

Although Alibaba focuses on business to business trade it also supports other trade through e-
commerce web portals. Taobao is for consumers to trade, whereas Tmall is for the upcoming
middle class of China to purchase branded products. There are many other subsidiaries through
which Alibaba makes money.
How does Alibaba make money?
Alibaba.com is a marketplace where sellers and buyers meet. The website acts as an intermediary
which charges commissions from the sellers of mainland China, Hong Kong & Taiwan. However,
the revenue isn’t earned just as commissions.

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Alibaba offers two types of supplier membership:

 Free Supplier Membership

Suppliers on Alibaba do not need to pay anything to list their goods on the online marketplace.
They are free to display up to 50 Products online and to get business inquiries. Alibaba only makes
money from them in the form of commissions if the money is paid through Ali Pay and the seller
is from mainland China, Hong Kong & Taiwan

 Premium Gold Supplier Membership

There are limitations to being a free supplier member of Alibaba as these suppliers are not verified
(reduces buyer’s trust) and are only able to display up to 50 products on the website. The suppliers
from China can’t even list themselves as free suppliers and have to buy the premium gold supplier
membership plan to start a business on Alibaba.com.

Alibaba Gold Supplier Membership is a premium membership where suppliers pay certain fees
(few thousand dollars) to become a verified Gold Supplier.

All Gold Supplier members are required to fulfill necessary requirements for this highest level of
membership. They are also required to undergo rigorous authentication and verification procedure
by third-party credit reporting agencies.

Gold members are also charged commissions as a percentage of the transaction value of goods
sold.

i. Payment processing fee for payments via:

ii. Credit card – the processing fee is 2.95% of the transaction’s total amount, which is
automatically deducted from the payment. The payment is processed within 2-3 days.
iii. Online bank payments – the processing fee varies for specific payment amounts. It takes
4-5 business days for US accounts) and 9-10 business days (for SEPA accounts) to process
the payment after Alibaba.com has deducted the payment from your account.
iv. T/T telegraph transfer – handling fee depends on region and banks. It usually takes 3 to 7
business days. Contact your bank for details.
v. Western Union – processing fee depends on the amount of payment. The process takes one
business day.
vi. Boleto – the handling fee is 1.35% of the total transaction amount. It takes 2-4 business
days.
vii. Pay Later – no handling fee. It takes 1-3 business days. It is only available for US merchants
invited by Alibaba. Buyers cannot pay more than the credit granted.
2. E-Checking – the transaction fee is $15 per transaction. Payment through E-Checking takes
4-5 business days.

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3.Software they provide

About Alibaba Cloud

Alibaba Cloud is an integrated suite for cloud computing, data storage, web hosting
migration, cross-region networking, IoT, data warehousing, application services and
more. It provides a content delivery network (CDN), which enables businesses to
accelerate file distribution across hybrid or dynamic sites and applications using
caching, intelligent routing, data compression and layered communication protocols.

With Alibaba SMS service, developers can send one-time passwords, transactional
messages, and push notifications to clients in real-time. Alibaba Cloud allows
businesses to store, backup and migrate high volumes of data in cloud servers and
ensure security through multi-factor authentication, ransomware protection, data
encryption, remote disaster recovery

iv) Provide some broad suggestions on how they might increase sales and
strengthen their position in the market.

As e-commerce adoption increases, online businesses face rising competitive pressures,

which they can only overcome by increasing sales and getting a larger proportion of the
market. While some online marketplaces offer minimal advertising assistance in-app,
others, such as Alibaba.com, have built-in advertising tools to help their sellers.

Alibaba.com offers a platform for your small business to thrive and also equips you with
affordable advertising tools — keyword advertising and Premium Sponsored Ads — to
increase your visibility on the platform.

In this article, we'll show you how to use keyword advertising and Premium Sponsored
Ads to boost your sales on Alibaba.com.

Customer Service

Business blogs Seller Guides How to increase sales on Alibaba.com with advertising tools

How to increase sales on Alibaba.com with advertising tools

Alibaba.com

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How to increase sales on Alibaba.com with advertising tools?
As e-commerce adoption increases, online businesses face rising competitive pressures,
which they can only overcome by increasing sales and getting a larger proportion of the
market. While some online marketplaces offer minimal advertising assistance in-app, others, such
as Alibaba.com, have built-in advertising tools to help their sellers.

Alibaba.com offers a platform for your small business to thrive and also equips you
with affordable advertising tools — keyword advertising and Premium Sponsored Ads
— to increase your visibility on the platform.

In this article, we'll show you how to use keyword advertising and Premium Sponsored
Ads to boost your sales on Alibaba.com.

What are advertising tools?

Advertising tools are suites, techniques, or configurations that help business owners and
sales agents boost their sales. The aim of using advertising tools is to promote products and
services, making them more visible to a wider target audience. There are lots of different
advertising tools, each of which works differently from others. However, the best
advertising tools for businesses depend on convenience, pricing, and effectiveness. For e-
commerce businesses, keyword advertising and sponsored ads are the top two.

Why are advertising tools important?

Advertising tools are important in marketing because they give brands the chance to be
seen by their target audience, which promotes brand growth in terms of customer base,
revenue, and profits. Here are some specific reasons why we have deemed advertising tools
as important for e-commerce businesses.

1. Better positioning

Advertising tools help you position your business better as they are customized to reach
your precise target market. This distinctive positioning makes it simple for customers to
find you and use your services or buy your products. Advertising tools also improve the
effectiveness of marketing initiatives by positioning you ahead of competitors, bringing
you closer to customers, and enhancing the reputation of your business.

2. Increased visibility

One of the most important benefits that advertising tools provide for businesses is an
increase in visibility. Your business would be hard to find if your marketing strategy didn't
include the appropriate advertising tools. According to studies, internet visitors rarely

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 browse the second page. Therefore, it's critical to ensure that your product ranks as highly
as possible across all product categories, which advertising tools do.

3. Steady growth
By using advertising tools, you will experience steady business growth over time. This
growth will come from a variety of sources, including the number of leads you attract,
sales you make, positive reviews you receive, and the number of business relationships
you can establish.

4. Wider customer base

The purpose of advertising is to make you more accessible to people. By bringing in high-
quality customers, advertising tools assist you in expanding your marketing reach and
increasing lead generation.

5. Increased sales

Advertising tools target consumers who are prepared to make a purchase and position your
company so that consumers view you as the best option or the top seller. This increases
customer traffic and, thus, total sales.

6. Increased profit margins

Because advertising tools are frequently offered for free or at a low cost (freemium),
they help firms boost their profit margins. Businesses would have more money
available to them even after making significant sales as a result of the reduced cost of
advertising, increasing their profit margins.

Advertising tools on Alibaba.com

The fantastic thing about Alibaba.com’s advertising tools is that they are simple to use and have a
long-term positive impact on businesses. These advertising tools are keyword advertising and
Premium Sponsored Ads.

1. Keyword advertising (KWA)

Keyword advertising is the smart way to advertise on Alibaba.com. Advertised

products are displayed alongside organic search results that are most relevant to buyers.
Let’s take a look at what KWA is in more detail.

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 Keyword advertising(KWA)

What is keyword advertising?

Keyword advertising is a competitive advertising strategy based on product keywords.

Here, sellers select and then optimize the product keywords to fit their products. For a
better match, these keywords are also included in the product titles. When buyers use
the Alibaba.com search tab to look for a certain product, products containing the
keyword they entered show up. Sellers using keyword advertising are ranked based on
their keyword star rating.

Benefits of keyword advertising:

Better positioning: Keyword advertising gives you strategic positioning on Alibaba.com,

both on the website and on the mobile application. Your products will be ranked next, after
the sponsored product.

Effective targeting: In addition to strategic positioning, keyword advertising also offers effective
targeting. Businesses are only ranked based on search queries relating to their product category.
As a result, the advertising will be more effective because it will only target customers who are
actively seeking your items or products in your product category.

Pay per click: Another fantastic advantage of using keyword advertising on Alibaba.com
is that you only pay when a buyer clicks on your product. As a result, you won't be required
to pay for a service that you didn't use. Additionally, it would give you more freedom to
experiment with different product categories and keywords to see which ones work best
for you without having to worry about the cost of doing so.

Budget control: The keyword advertising tool on Alibaba.com enables you to meet
your advertising needs within your set spending limit. This implies that you have a
choice over how much money you spend on advertising. This is fantastic since it allows
you to adjust your advertising spending depending on whether you want to reach more
consumers or not. Additionally, you have complete discretion over how you direct your
ad spending.
2. Premium Sponsored Ads
Premium Sponsored Ads are a powerful tool in e-commerce advertising. They have a
very high click-through and conversion rate.

Premium Sponsored Ads

What are Premium Sponsored Ads? Premium Sponsored Ads provide an excellent
return on investment. Recently, Alibaba.com Global Gold Suppliers received access to

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 this wonderful feature. When a user enters a search term, Premium Sponsored Ads
appear as the first search result. Premium Sponsored Ads showcase the product as the
finest option for buyers.

Key benefits of Premium Sponsored Ads:

Exclusive resource: Only one supplier may buy a keyword at a time for Premium
Sponsored Ads. As a result, Premium Sponsored Ads give you the assurance that your
product will be shown first whenever the keyword is searched.
Guaranteed first search result display: In addition to appearing on the first page of
search results, your products will also be shown as the first search result. This ensures
that your product will appear first for every customer that searches for products using
your keyword.

Diverse ad elements: The goal of Premium Sponsored Ads is to highlight top-selling goods
while boosting suppliers' capacity for production.

KWA vs. Premium Sponsored Ads

Both KWA and Premium Sponsored Ads are based on keywords. However, while
KWA is a performance-based advertising tool on Alibaba.com, Premium Sponsored
Ads seek to optimize your brand image and give you a more competitive edge. Also,
Premium Sponsored Ads are only available to Alibaba.com’s Global Gold
Suppliers(GGS) and China Gold Suppliers.

contact with alibaba.com

1. Display position

When a customer searches for a product, KWA displays products at strategic positions,
depending on whether the mobile application or the web application is used for the search.
On the other hand, Premium Sponsored Ads always dominate the search result page and
stand out ahead of competitors. Premium Sponsored Ads also have a “crown icon”
displayed right beside the title of the products which also helps with catching buyers’
attention. On PC, Alibaba.com offers more recommendations to buyers for them to explore
other product options from your store.

2. Ad format

KWA typically adopts a standard product format akin to organic search because the focus
is typically on the positioning of the product rather than the actual product itself. The
product is simply ranked high enough by KWA. On the other hand, Premium Sponsored

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 Ads have an improved display format — the crown icon beside the product title and further
recommendations.

3. The role of the ad

KWA is performance-driven ads, focusing on achieving specified business objectives in a

short time. To boost a product's popularity within a given product category, keyword
advertising ranks products according to a specific keyword. On the other hand, premium
sponsored advertising concentrates on building your brand image so that you can outsell
your competitors.

Tips for using advertising tools — KWA & Premium Sponsored Ads on Alibaba.com to grow
your business and increase sales

Advertising tools have immense benefits for businesses. Our tips for using advertising tools
will help you get the best out of your chosen advertising tool.

How to Use Keyword Advertising?

KWA is very user-friendly. The seller focuses on optimizing the product features while
KWA manages the exposure of the product. Here are some useful expert tips for using
keyword advertising:

1. Use a great image

Ensure that the cover image for your product is of very high resolution and that the product
is clear. Avoid distracting backgrounds that may hide the quality of the products. This
would encourage buyers to click on your product rather than scroll past it.

2. Use clear product titles

The product title should be clear and concise and should include the product name, brand,
specification, feature, the benefit of the product, and keyword. This helps increase your
ranking and doesn’t leave the buyer in doubt.

3. Set a competitive price

Buyers want to get the maximum quality product for a competitive price. Your product
pricing should acknowledge that.

4. Optimize promotion scores

Promotion scores determine where your product ranks in search results. Promotion scores
of less than 3 will not be accepted for KWA. To optimize your promotions score, ensure

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 that your product is properly described, is in the right product category, and is associated
with the right keywords.

5. Keyword research and analysis

Determine the competitiveness and click-through rate of your desired keyword(s).
Also, ensure your keyword star rating is high. Keyword star ratings determine how
your product will rank for your keywords.

6. Analyze your advertising data

Analyzing your advertising data will help you spot potential issues and adapt your plan
accordingly. These issues may include low impressions with high click-through rates,
high impressions with low click-through rates, high clicks with few inquiries, or high
inquiries with few orders.

How to use Premium Sponsored Ads

Premium Sponsored Ads appeal to a buyer’s psychology. Your focus should then be
on compelling marketing content. Here are 3 tips to increase the effectiveness of your
Premium Sponsored Ads.

1. Enhance the product’s description

Premium sponsored advertising presents your product or product category as the most
well-liked or popular choice. Your product description should be appropriate with that
positioning in mind.

2. Showcase product benefits

Be sure to highlight all of the product's benefits in the product description. Place your
product near items that will normally make the buyer joyful to appeal to their emotions.

3. Boost your reaction time

Premium sponsored advertising boosts click-through rates and impressions, but if you
have a slow response time, it could result in dead leads. Don't let a lead become cold;
buyers often anticipate a response within the first several hours. In a state of marketing
report, Drift disclosed that 82% of consumers expect a response within 5 minutes via
live chat.1

Sell on Alibaba.com

Alibaba.com provides sellers with a range of advertising tools to help them gain more
exposure and hit their sales expectations. It distinguishes itself from its rivals because
of this. Built-in marketing and advertising solutions on Alibaba.com have seen
tremendous success over time and have been updated to reflect developments in the e-

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 commerce industry. For instance, product showcases serve as showrooms where sellers
can showcase their best goods to gain more visibility. Additionally, Alibaba.com offers
smart recommendations to sellers on which products to showcase.

Pay-per-click keyword advertising is based on the buyer’s geography, click history, and
additional analytical data to increase the chances of clicks converting to leads.
Additionally, sellers have the option to participate in sponsored campaigns to benefit from
increased traffic. Why are you holding out? Open a seller account to access these benefits
and many more.

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REFFERENCES
1. https://www.adnabu.com/ecommerce-marketing-strategies
2. https://www.bing.com/search?q=Explain+the+e-
commerce+strategies+used+%28payments%2C+methods%2C+pricing%2C+marketing+
etc.%29+the+type+of+application+and+its+features.&form=EDG
3. https://www.marketing91.com/features-of-
ecommerce/#:~:text=11%20Most%20Important%20Features%20Of%20eCommerce%20
1%20Features,to%20use%20the%20checkout.%20...%20More%20items...%20
4. https://www.drift.com/blog/state-of-conversational-marketing/
5. https://www.wolterskluwer.com
6. https://ww.tutorialspoint.com
7. https://www.indiafillings.com ›learn

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