Assignment

“Alibaba.com”

Kurbanova
Rabiyam

1
 Ma
n-17

Table of Contents

1. Executive Summary…………………………………………………..….3
2. SWOT-analysis………………………………………………………..…...5
3. Marketing strategy…….…………………………………………….…6
4. Target Market………………………………………………………..….…7
5. Marketing mix (4Ps)……………………………………………………..8
6. Conclusion........................................................................11

2
 1. Executive summary

Alibaba is the largest online trading company in China. Alibaba Group was founded in 1999
in Hangzhou by Jack Ma , who sought to help make the Internet accessible, reliable and useful to
everyone. Alibaba Group has a total of seven business groups, namely: Alibaba Small Business
Operations, Taobao, Tmall, Alibaba International Business Operations, Juhuasuan, eTao and
Alibaba Cloud Computing .Over the past decade, two of the subsidiaries include Taobao and
Tmall have profoundly helped Alibaba Group Holding Ltd in huge growth. Alibaba group's
mission is to make it easy to do business anywhere. Before this company came into existence,
the sales channels are very inadequate for local SMEs in China. Trade shows that are held to
introduce and showcase the latest products for more opportunities have been very expensive.
Therefore, the technology provided by Alibaba has given SMEs in China huge advantages .On
the other hand, the e-Commerce platform is also included in the regular business cycle and
provides suppliers and buyers with more accurate and up-to-date information than ever before. In
a nutshell, Alibaba's e-Commerce technology has made it so convenient for SMEs to conduct
their business anywhere in the world efficiently .According to the BBC, the total value of goods
sold in Alibaba in 2017 was much higher than Amazon and eBay combined. Alibaba has a clear
mission that is to facilitate doing business around the world because it insists that customers
come first, the company second and the shareholder third. Alibaba Group Holding Ltd is now the
main global electronic market (GEM) in the world in terms of its widely participating users. Jack
Ma used to be just a teacher, but now the richest man in China. Alibaba handles more business
than any other e-Commerce company. The company is a trading platform that is created
specifically for small and medium-sized businesses. That is, within the framework of the site
wholesale trade is possible. Alibaba is a B2B website that meets the needs of suppliers and
buyers. The key stakeholders in the company are Yahoo and Japanese Softbank. The target
audience of the site is always some other company or employees. In addition, it also offers
business management software and Internet infrastructure services focused on business
throughout China. Online platform works in the format of the auction, which presents products
exclusively from Chinese manufacturers. The range of the trading platform is amazing: here you
can buy shoes and clothes, cars and spare parts, food, computers and smartphones. Alibaba
operates in both domestic and international markets. The international market focuses on a global

3
network for buyers and supplies of raw materials, components and finished products, while the
domestic market focuses suppliers and buyers mainly in China. According to Timothy Leong, in
1999 Alibaba had only 18 employees and their office was in Jack MA's apartment. However, it
has now grown to more than 86,000 employees with offices in several countries. Alibaba's
overall mission and goal is to create a strong and profitable relationship with customers.

4
 2. SWOT-analysis

Alibaba is the largest e-commerce organization and the strongest brand operating as the leading
intermediary organization in C2C, B2B and B2C segments, with 58% market share in China. A
major strength of Alibaba is the market it operates in, China which is the most populated nation
and the second largest economy of the world, both of which accounts for the success of Alibaba
Group. A qualitative strength of Alibaba is its founder, Jack Ma; his strong presence, ideas and
vision are adding to Alibaba’s growth trajectory. Other significant strengths of Alibaba are
strategic partnerships, broad product portfolio coupled with growing demand for wholesale and
retail business; these have help in preserving its market share. 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.

One of the major weakness of Alibaba is that it has too many merchants on board, the
consequence of which led to good brands calling o due to high competition, sellers not being
able to make good profits and counterfeit products from local sellers flooding the markets.
Alibaba cloud bagged the 2018 MySQL award for the second time. In 2015, it became the first
Asian company to be cited as the WebScaleSQL contributor. This accounts for a huge
opportunity for Alibaba to become a market leader in the cloud computing space. While global
players like Amazon and eBay are a major threat to Alibaba’s e-commerce segment, it also faces
stiff competition from local players like JD.com and Tencent. Other key threats to Alibaba are
cyber security, economic recession and weak demand in the international market.

5
 3. Marketing strategy

Alibaba provides free membership from the beginning to attract clients its way to e-trade
market that became the core competency and contributing to more business opportunity in
Alibaba. After a big number of registered clients at Alibaba, it began to charge membership fees.
Alibaba earn profits by two major aspects. The primary revenue came from advertising fees from
Alibaba. The second source of revenue comes from customers for value-added services, listing
fees as well as membership fees. Furthermore, Alipay also began to collect technical service
charge from business transaction that take place outside of Taobao and Alibaba. Alibaba uses a
competition pricing in setting the price of a product in comparison with its competitors. It uses
the price that does not have extreme differences with its competitors and provides the cheapest
prices with good quality to attract its target market.
Due to Alibaba’s dominant market position in e-commerce, Alipay has emerged as the online
payment-processing leader in China and it clears 80 million transactions per day, including 45
million transactions through its Alipay Wallet mobile app . Next, Alibaba provides products
within the same range with deferent prices depending on the suppliers to offer buyers a wider
choice of variety.

6
 4. Target Market

Alibaba target two marketplaces which include the global marketplace based in English
Language that cater to international exporters and importers and the China marketplaces whose
aim is to focus on suppliers and buyers trading locally in China.
China is by far the largest Internet marketplace in the world with double the size of U.S market.
There are 590 million Internet users spending 20 hours a week online. Notably, China is skipping
with the traditional retailing and in favor of the e-retailing. These two marketplaces are
collectively the most- visited B2B website on the Internet. Alibaba also target on small and
medium-sized private enterprises and individual businessmen, which have great potential in
succeeding in the e-trade. In order to get a huge portion of market share, Alibaba Group has
localized the e-trade services by developing websites that locate to different languages and
modify their design and layouts, which suits the local cultural in overseas. For example, English
website is target to buyers from oversea in general while Chinese website targets China traders
and Japanese website aims at the Japanese market. Alibaba has also creates Korean and Spanish
language website in order to expand its market in different regions and to achieve highest profits
and goals. All these play an important role in Alibaba’s global success.

7
 5. Marketing mix of Alibaba (4Ps)

Product
● The primary product in the Alibaba group is their E-commerce portal – Alibaba.com.
This portal has the distinction of being the world’s largest business to business portal.
Where Amazon and other E-commerce portals sell business to consumer, Alibaba
captured the business to business market and is currently the leader.
● Alibaba, through its other service – Aliexpress.com also provides smaller buyouts for
small businesses as well. The major advantage of Alibaba.com as an E-commerce portal
is that it can export to 240 countries, thereby immediately giving it the reach to have a lot
of revenue turnover.
● Besides Alibaba.com, In China, the Alibaba group also launched Taobao which is the
Ebay.com equivalent of a Business to consumer E-commerce store. It is the largest E-
commerce store in China and the 2nd most visited website in China.
● Alipay is another of its services which is a platform for online payments without any
transaction fees.
Price
● The pricing strategy that Alibaba uses is penetration pricing as it seeks to enter newer and
newer markets. It therefore offers discounts and cash backs to the customers on its site
and reduces its cut from the transactions. Some of the services that they offer do not
involve any transaction cost. Some of the services like Aliexpress have no registration fee
as well. The primary revenue earned by Alibaba is through the advertisements that are
done on their site by businesses. The secondary revenue is from customers who take
membership. It also sometimes employs competitive pricing to offer products at prices
similar to the competitors to drive the sales. Overall it is much more economical for most
of the users.
Place
● There are various types of channel intermediaries; Alibaba Groups uses the internet as its
intermediary. The internet has a geographically dispersed market therefore niche
products will be able to reach a wider audience.

8
 ● Distribution is one of Alibaba. Com function which include company activities that make
the product available to the target market . Alibaba use different channels to make sure
that product is available where is needed Alibaba focus on distribution channels like
inventory , locations like supermarkets and hypermarket , logistics and transportation also
warehousing .The best of Alibaba.com distribution: is a web site that facilitates
transactions between importers and exporters around the world.
Promotion
● Company promotes the brand through a number of channels. It advertises through
traditional channels like print media, radio and TV advertisements. It advertises through
catchy taglines. As most of the services offered are online Alibaba promotes through
digital media as well. They have also been the sponsors for international events like
Beijing Olympics. It has also sponsored Australia-China BusinessWeek which was one of
the high-profile events in the business world.
● And also Alibaba.com it uses the strategy of Internet promotion, as the Internet is the best
cost-effective and fast tool for promotion in the export-import market. Presence
alibaba.com company profile and product/services in major search engines such as yahoo
give the company a global exposure and effectively create awareness among
buyers/importers.

The four Ps of the marketing strategies have contributed to the success of Alibaba.com.
The company has implemented all the four strategies in-order to move to the right direction.
Alibaba.com has been able to emerge as a grand business to business site where customers can
easily obtain products and services from the wide range of products available. Using the
marketing strategies Alibaba.com has been able to reach the targeted customers and fulfilling
their needs/wants accordingly.
For further promotion , Alibaba platform can :
● To enhance competitiveness: Alibaba companies become competitive in the domestic
market before the enterprise in the international area. Competitiveness in the domestic
market helps companies to acquire some strategies that can help them in international
markets.

9
● Get a share in the global market: by Moving to the international market, companies will
participate in the global market and get a part of the huge international market.

10
 6. Conclusion

In my opinion, Alibaba became so successful in ecommerce is because of its numerous

advantages and it have great potential to boost up business for all small and medium enterprise
which attracted many suppliers to invest in them. Planning to be a company like Alibaba is easy
but becoming like Alibaba is another thing. In this study, I learned very much that the
determination of the founder, Jack Ma has profoundly influenced the success of Alibaba. Jack
Ma once said it’s not about the list of privilege but the story of opportunity that has made him a
successful person even though he doesn’t know much about technology. Online business is not
new to everyone since years ago, but Jack Ma has created a miracle that gives China a huge
impact until today, the e-marketing in the 21st century has become the largest online e-trade
platform in the world.

11
 References:
1) https://www.alibabagroup.com/en/about/businesses
2) https://www.alibaba.com
3) https://www.ciim.in/alibaba-marketing-strategy-case-study
4) http://www.nstrade.ru/blog/item/kitajskaya-kompaniya-alibaba/
5) https://www.marketing91.com
6)https://www.waca.associates/en/web_marketing/marketing-strategy-tips-from-jack-ma-
founder-of-alibaba/
7) https://www.swotandpestle.com/alibaba/
8) https://www.mbaskool.com/marketing-mix/services/17542-alibaba.html
9)https://www.ukessays.com/essays/marketing/the-alibaba-group-company-analysis-
marketing-essay.php

12