Patandhoka, lalitpur

CASE STUDY OF E-cOMMERCE

ON

Submitted by :
PADAM BAHADUR REGMI
ROLL NO: 12/072

Submitted to :
Mr. DADHI GHIMIRE

Department of Bachelor in
Computer Science and Information Technology
(Bsc.CSIT)
Of
PATAN MULTIPLE CAMPUS
(2075-06-10)
 Abstract

Alibaba.com, often simply Alibaba, is a Chinese E-commerce company which has been serving
worldwide from last 18 years. The founder vision was to build a company that would be able to
provide every types of items that customers require from the same company globally. Through
internet, people can order any products they prefer by observing the price visiting the site
Alibaba.com. Alibaba.com became a platform for the manufacturer, retailer and individuals in
2000.Alibaba.com offers their services towards four types of customers, consumers, sellers and
enterprises.

This case study report is detail analysis of Alibaba.com. The report describes the List of areas that
it has been working, the business models it has adopted and the various strategies that it has
implemented to make it one of the most successful E-commerce platform. This case study reflects
that using the strategies and model adopted by Alibaba's can leads any other E-commerce site to
get successful.

This case study also shows that how the different models and strategies must be
Implemented with respect to the dynamic environment of the E-commerce. To gather such
information on Alibaba's we use the informal way like as reading the articles and other case study
documents and pointed out some key points and finally we visited to theAlibaba.com to verify the
finding as well as to discover more that we might have been missing. After doing the sort of
analysis, we tends to find that Alibaba is totally uses the Business to Customer Model, Business
to Business Model and Customer to Customer Model.

Alibaba totally rely on the customer and customer satisfaction is its primary goal.
Alibaba handle its better relationship with customer by collecting information of the customer like
as all personal information of customers their credit card record, transaction record, order record,
profile, their past purchase history are collected in the database. Alibaba.com carries out some of
Associate programs to boost the customer traffic and rate of sale.

Alibaba mainly focuses on the customer satisfaction by providing the various ways to ensure that
like as personalization, user ratings and reviews, minimum shipping charge which act as the key
ingredients for success of Alibaba.com. But still Alibaba have to do some change on its system
like as Global Expansion, Integrating on New Technologies, Innovation of New products.

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Table of Contents

Abstract 1
Table of Contents 2
1. Introduction 3
1.1. Introduction 3
1.2. History 4
1.3. Objective 5

2. Methodology 5

3. Analysis 5
3.1 Business model 5
3.2 Products and services 6
3.3 Target Users 7
3.4 Payment Methods 7
3.5 SWOT Analysis 9

4. Discussion 12

5. Recommendations 13

6. Conclusions 14

7. References 15

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1. Introduction:
1.1 Introduction:
Alibaba is a Chinese multinational company specializing in E-commerce, retail, internet, AI
and technology. Founded in 1999 by Jack Ma. The company provides, Business to Customer,
Business to Business and Customer to Customer sales services through internet as well
as electronic payment services, shopping search and cloud computing services. It owns and
operates a diverse array of businesses around the world in numerous sectors, and is named as
one of the world's most admired companies by Fortune. Alibaba sells every kinds of products
that includes almost all kinds of electronic products, machineries, household products and
sports and entertainment and more other items.
In e-commerce and retail services Alibaba has two popular platforms Aliexpress and
Alibaba.com. Aliexpress is an online retail service made up of mostly small Chinese businesses
offering products to international online buyers. Alibaba.com is the world's largest online
business-to-business trading platform for small businesses. Alibaba has two retail sites:
Taobao, which features thousands of non­brand name products sold by smaller merchants; And
Tmall, which offers brand-named products sold by big merchants.
Alibaba also owns three companies Alibaba Cloud(Aliyun), Aliginie and AliOS providing
services for cloud computing and AI. So, it is the largest company providing most of the
services which the customer need throughout the world.
One can think of it as a mix of Alibaba.com, eBay and PayPal. Customers use Alibaba to shop
online, sell unwanted goods and make online payments. Unlike Alibaba, which buys goods
from suppliers and sells them to customers, Alibaba has always acted as a middle man,
connecting buyers and sellers and facilitating transactions between them. This Chinese B2B
trading platform connects buyers in North America and Europe with suppliers from China.
Alibaba is the most popular and consumer friendly E-commerce Business Company which
follow an aggregation of supply model that helps to meet the current need of the global market.

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1.2 History:
Alibaba Group was established in 1999 by 18 people led by Jack Ma, a former English
teacher from Hangzhou, China. From the outset, the company’s founders shared a belief
that the Internet would level the playing field by enabling small enterprises to leverage
innovation and technology to grow and compete more effectively in the domestic and
global economics.
Jack Ma named his company on “Alibaba ­ Open Sesame”. Alibaba is a kind smart
business person, and he helped the village. Alibaba opens sesame for small to medium-
sized companies. During Late 90’s, Alibaba Group raised a total of US$25 million from
Soft Bank, Goldman Sachs, Fidelity and some other institutions.
After Alibaba achieved profitability in 2001, its sister organization Taobao was founded
as a consumer e-commerce platform. Which further established TMall.com are tail
websites to complement its C2C marketplace. After about a decade since its inception
Alibaba group also beta launched eTao as a shopping search engine.
Alibaba raised $21.8 billion in its debut, making it the biggest U.S. - listed IPO in history
after the IPO of credit card processing company Visa in 2008.

1.3 Objective:
Following are the objectives of this case study:

1. Identifying the Line of Business of Alibaba.com.

2. Identifying the types of Business models used by Alibaba.com for expanding its E-
commerce Business.
3. Identifying the list of E - commerce Strategies deployed by the Alibaba.com regarding
its intensive growth, generic strategies and user referenced.
4. Identifying Supply Chain Strategies and how such strategies are implemented.
5. . Identifying what are the more steps to be taken by Alibaba.com in coming future.
6. . Identifying the payments methods of Alibaba.com.
7. Identifying the global reach and access of the Alibaba.com.
8. Identifying the total income, revenue and IPO of Alibaba Company throughout the
world.

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2. Methodology:
For the study and analysis of Alibaba Company it was infeasible for direct communication
with the people associated with it so, this study is based on Secondary source of data collection.
First of all we read the available paper and documents of case study on Alibaba.com done by
others and noted some key points such as Areas of Business, Adopted Strategies, Adopted
Business Models, etc. We too watched some videos based on customer and merchant reviews
as well as videos explaining the working of Alibaba.com and its Strategies. Finally we validate
gathered information from the Alibaba.com website and also target for getting more
information regarding the services it provides currently, how it maintains its supply chain, etc.
Most of the data are taken from the official website of Alibaba.com and Wikipedia.

3. Analysis:
3.1 Business Model
Alibaba has the vision to have the reach throughout the world from the beginning and
was determined to provide the demanding service to all the people globally. The initial
business model of Alibaba was simple a facilitate a 24/7 meeting platform for suppliers
and buyers around the world. From the start Alibaba did not just connect Chinese
suppliers with international buyers, but it had the goal of connecting all importers and
exporters around the world to each other.
Alibaba has mostly employed three business models and they are: C2C, B2C and B2B.

a C2C:
C2C refers to consumer-to-consumer business model. For this Alibaba has Taobao.com.
Taobao.com is China's largest shopping website, and tmall.com, which offers a wide
selection of branded goods to China's emerging middle class. It sells many non-brand
products sold by different merchants.
In march 2013 it had around 750 million products,so Taobao is one of the world’s top
10 visited website. Still Taobao is able to be the popular e-commerce site for the
consumers throughout China.

b. B2C:
C2C refers to business-to-consumer business model. For this Alibaba has Tmall. Tmall
marketplace is China’s largest business-to-consumer (B2C) online shopping venue.
Tmall provides a platform where buyer and seller can communicate for inquiring about
the products and engage in bargaining prior their business. The site allows visitors to
quickly view vendor fees, required deposits and other factors associated with the
products.
The Taobao.com and Tmall are most popular, and they are used for most of the parcel
deliveries in China. According to The Wall Street Journal, their combined transaction
volume in 2012 topped one trillion Yuan ($163 billion), more than Alibaba and eBay’s
revenue combined.

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c. B2B:
C2C refers to business-to-business model. For this Alibaba has Alibaba.com.
Alibaba.com Limited the primary company of Alibaba is the world’s largest online
business to business trading platform for online business.
Alibaba.com has three main services. The company’s English language portal
Alibaba.com handles sales between importers and exporters from more than 240
countries and regions. The Chinese portal 1688.com was developed for domestic
business-to-business trade in China. In addition, Alibaba.com offers a transaction based
retail website, AliExpress.com, which allows smaller buyers to buy small quantities of
goods at wholesale prices.
Alibaba is able to provide the most effective service to business organization and
consumers globally for dealing a supplying the products. So, it is most popular E-
commerce site throughout the world.

3.2 Products and Services

Alibaba provides a wide variety of products and services through its various online por
tals. Some of these are:
● Electronics
● Electrical Equipment, Components & Telecom
● Online marketing
● Cloud Computing
● Logistics Operations
● Gift, Sports & Toys
● Health & Beauty
● Home, Lights & Construction
● Jewelry, Bags & Shoes
● Machinery, Hardware & Tool
● Apparel, Textiles & Accessories
● Auto & Transportation
● Metallurgy, Chemicals, Rubber & Plastics
● Packaging, Advertising & Office
● Electronic Payment Services

From Alibaba customer can choose among wide varety of products and order them
easily with less delivery charge. A consumer can literally buy products ranging to simple
toys to automobiles. People can buy in retail or wholesale. It also provides several offers
and discount for variety of products that it sells. Hence, proving to be platform where a
consumer can choose among a wide variety of options that they need in affordable price
easily. It claims “Get everything and anything”.

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3.2 Target Users

Alibaba is the main and the most popular E-commerce site in China. But it had extended
is business in almost 190 countries throughout the world.
Now Alibaba is the most successful global organization but it has been focusing in china
more. About 570 million Chinese people are using Alibaba at an average of 20 hours a
week and it is occupying more than 70% of the Chinese users. It also provides the small
sized to medium online business platform to individals.
Due to emerging market and growing popularity Alibaba has established its offices in
Korea, US, UK, India, Japan and many other developed countries and it is also linking
its business with the E-commerce business of other developing countries.

3.3 Payment Methods

Alibaba offers the users various ways of payment system and due to diverse payment
methods it is very easy and reliable to make the payments that the user trust. Actually
Alibaba Group has its own payment solution named as Alipay, is a third-party online
payment platform with no transaction fees. Other than that, Alibaba also offers many
ways to pay suppliers. List of the payment methods are:
1. Telegraphic Transfer (TT)/Bank Transfer
2. Letter of Credit
3. DA/DP
4. Western Union
5. PayPal
6. Escrow

Buyers are advised to consider each option carefully before committing to one. In terms
of innovation, Alibaba is introducing a new secure mobile payment method as it gets
ready for its IPO. The Chinese e-commerce giant will get ahead of its competitors
Alibaba, Google and Paypal with an innovative and secure method of payment using
finger prints instead of passwords.

“The biometric technology, including encryption and authentication managed by

Huawei, will allow mobile users to confirm payments for a wide variety of goods and
services with their smartphones simply by swiping a digit instead of entering a lengthy
code,” the company says on its blog.

Huawei, the world’s third largest smartphone vendor by shipment volume, will also
employ high-level encryption and verification to ensure only approved third-party

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applications,
i.e.Alipay Wallet, are allowed to access the fingerprint information for transactions.

It’s worth remembering that Alibaba is a pretty safe platform to purchase on. Not only do you
have the standard protection that your payment provide gives, but Alibaba hold mostly all
payments in Escrow until the buyer confirms they have received the goods and they are as
expected .Until the buyer confirms the receipt the seller does nt receive the funds.

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3.4 SWOT ANALYSIS:
1. Strength:
Scale of operations: Strengths of Alibaba that come to my mind is the sheer scale of operations
and the market which it majorly operates. China is the most populated country in the world
and is one of the leading economics and to have a strong hold in such a market and be a market
leader is no mean feat. This kind of a success story is sure to go a long way in scripting
Alibaba’s growth path.

Market Share:

As of 2015, Alibaba had a market share of 58% in China and its closest rival was far away at
22%. One of the major strengths of China is that this market share dominance comes because
of the backing of solid manufacturers who are capable of manufacturing at mass levels and
supplying across the world.

Visionary Leader:

Another strength, though qualitative in nature, is the presence of a visionary like Jack Ma at
the helm of the company. We all have heard the visionary ideas of Steve Jobs and many often
attribute Apple’s success to him. It’s important to have an iconic founder/leader who can lead
from the front and Jack Ma’s popularity and visions for the company are not letting them down
on this count.

Good relationship with partners:

Alibaba also provides a very conducive environment to all those who participate in scripting
its success. Merchants, Consumers, third party dealers etc. all get access to financial schemes,
scalable platforms, cloud storage and real time access to all information. This makes it very
attractive for more and more partners to join hands with Alibaba.

2. Weakness:
Way too many sellers:

Alibaba is not putting a cap on the number of sellers who register to partner up with the
company. This has resulted in a huge number of sellers competing in the online market place.
While this is good for the buyers, it might not be so good to the buyers. Not being able to taste
success because of the huge competition will make the sellers withdraw from the contract.
When Alibaba went public a couple of years ago, there were more than 8.5 million active
sellers and the number has only been going up ever since. Because of this, a few reputed brands
have pulled out from selling their products on Taobao and Tmall, the two websites by Alibaba.

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Very high discounts:
Not being able to allow sellers to sell at fair and profitable prices is another weakness that the company
has. It makes most of its revenues by selling advertising spaces for the sellers. The sellers are being
suppressed now and do not have the freedom or opportunity to sell at profitable rates.

3. Opportunities:
Experience in China:

The opportunities that Alibaba has in store are immense. Most of these result from the
strengths. Since it has a sound base in the Chinese market and an in-depth understanding of
the e-commerce business, it has immense opportunities in term of tapping other markets.
Thought the Indian market has two dominant players, a big blown entry by Alibaba sure has
the ability to create ripples.

Rising Investments and demand of E-commerce portals:

Very few E-commerce portals garner the amount of trust which Alibaba has. Naturally, when
Alibaba expands to a new country, it comes with the years of trust on the brand. And hence, it
gives tough competition to the local e-commerce players. Plus, it has the backing of the
manufacturers.

Aggregator based model: Its aggregator based model helps it reduce costs and keep its
operations lean. This also presents an opportunity to replicate the model in other markets.

4. Threat:

If Alibaba is looking to expand its operations to other countries, particularly to India, then the
biggest threat will be the presence and solidified establishments of Flipkart & Alibaba. The
time that Alibaba will take to set up its full functionality will be long and the two major players
of the Indian E-Commerce industry will start adopting new strategies to ward off competition

Overall rising competition:

Other entities like Tencent and JD.com are local competitors to Alibaba in China while Alibaba
and eBay are the global threats.

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Stability of the economy:

The stability of the Chinese economy will also play a role in deciding the success of the
business. But since almost all of Alibaba’s business comes from within China, the global
markets will have an impact only in dire situations.

Dropping profitability:

With rising demand in service levels from E-commerce portals, the profitability of most E-
commerce firms is dropping which is a point of worry for Alibaba as well.

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5. Discussion:
After doing the sort of analysis, we tends to find that Alibaba is totally uses the Business to
Customer Model. Alibaba totally rely on the customer and customer satisfaction is its primary
goal.
Alibaba handle its better relationship with customer by using technique of collecting information
of the customer like as all personal information of customers their credit card record, transaction
record, order record, profile, their past purchase history are collected in the database.
Alibaba provides sort of advantages to the customer like as Personalization, User ratings and
reviews, 1 click purchase, secure way for payment, minimum shipping charge, etc.
Not only has this Alibaba.com carried out some of Associate programs to boost the custome r
traffic and rate of sale Alibaba.com with customers and small businessman. Developing and
offering new products to gain higher revenues is the goal of this intensive growth strategy. Alibaba
grows partly by developing new products over time.

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6. Recommendation:
Alibaba.com is the ultimate online retailer around the world. It’s nearest but not even close competitors
are amazon, e-bay and best buy. But the competition is growing day by day.

a. Competing in the market:

Like past, Alibaba in future will have to come up with special something. The global market is changing
day by day. Business competitors are investing large to take Alibaba down. There is no room for
relaxation. It is very challenging and has to be consistent in the market to be number one retailer shop.

b. Innovation of new Product:

It is essential for Alibaba to think out of the box and bring new products to satisfy and retain customer
to be loyal to Alibaba.com. Alibaba always offered its customer better quality and better service. But
in future it may not be the same. People in today s world ask ‟ for more. Alibaba has to apply smart
enough to understand the customer need before even customers know about it.

c. Integration of New Technology:

Technology is making progress like the spread of light. Company like “Alibaba” needs to be adaptive
and technology friendly to retain its domination in the market. Alibaba’s new technology of Drone
delivery system indicates it is planning and investing significant amount of money in technology for
near future.

d. Customer Loyalty:
For an upward revenue stream customer loyalty is essential. Alibaba’s most of the buyers are its repeat
customers who are loyal to Alibaba. But growing competition can be a risk to Alibaba’s loyal customer.
e. Global Expansion:
Alibaba is expanding its business around the world. But this may cause significant strain in number of
sectors like management, inventory, supply system and more over to Alibaba’s market place.
International market is very challenging because of political and economic conditions. Investing more
towards customer information for better understanding the customer needs and behavior is essential.

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7. Conclusion:
On the part of conclusion we conclude that Alibaba.com uses different types of Business Model for its
better growth. Alibaba mainly focuses on the customer satisfaction by providing the various ways to
ensure that like as personalization, user ratings and reviews, minimum shipping charge which act as the
key ingredients for success of Alibaba.com. But still Alibaba have to do some change on its system like
as Global Expansion, Integrating on New Technologies, Innovation of New products.

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8. Bibliography

1. https://www.alibaba.com/(access on 2075/06/07)

2. https://www.alibabacloud.com/(access on 2075/06/07)

3. htpps://www.quora.com/(acess on 2075/06/08)

4. https://www.google.com/(access on 2075/06/08)

5. htpps://en.wikipedia.org/wiki/Alibaba group(access on 2075/06/09)

6. http://www.businesswire.com/news/home/20170518005564/en/Alibaba-

Group-Announces-March-Quarter-2017-Full(access on 2075/06/08)

7. https://www.slideshare.net/AKSHAYPRATAP0/case-study-of-
alibabacom?from_action=save(access on 2075/06/09)

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