BACKGROUND & SWOT ANALYSIS

E-COMMERCE BUSINESS
ANALYSIS STUDY ON ALIBABA.COM
(ALIBABA GROUP)

LECTURER: WIDYA GRANITA & PRIMADI W SURJOSOEMANTO

SUBJECT: E-COMMERCE

Rafii Saztura
School of International Business Administration, Faculty of Business
International University Liaison Indonesia, South Tangerang, Banten, Indonesia
Email: rafiisaztura@gmail.com
     Rafii  Saztura/IBA/05/MAY/2016  
 
1. ABSTRACT

This case discusses the success of Alibaba.com Corporation (Alibaba) in China

under the leadership of Jack Ma (Ma), its founder. It talks about the transformation of
Alibaba into one of the most successful e-commerce companies in China and also
analyzes its business portfolio. The case explains in detail the rationale behind Ma
starting an e-commerce website and his efforts to bring about the growth of the
company.

Alibaba had emerged as the largest e-commerce company in China. The company
tailored its strategies to meet the needs of the customers and made a mark because of its
understanding of the Chinese language and culture. However, some experts have also
raised doubts over the sustainability of Alibaba's business model.
The case highlights how Ma successfully competed with foreign e-commerce
companies like eBay Inc. (eBay) by establishing a rival website, Taobao.com, in the
online auctions market. However, Alibaba lagged behind in the Chinese web search
market despite acquiring Yahoo! China's operations in 2005. Moreover, with Baidu.com
(Baidu), China's leading search engine announcing its plans to foray into the rapidly
growing e-commerce market in 2008, the competition was expected to intensify for
Alibaba. After a successful IPO, the company was preparing to strengthen its
competitive position in China and also to provide tough competition to other Internet
and e-commerce companies in the global arena.

Keywords: E-Commerce, E-Commerce General Definition

2. INTROCUTION

E-commerce (electronic commerce or EC) is the buying and selling of goods and
services, or the transmitting of funds or data, over an electronic network, primarily the
Internet. These business transactions occur either 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 transactional processes
around online retail. E-commerce is conducted using a variety of applications, such as
email, fax, online catalogs and shopping carts, Electronic Data Interchange (EDI),
File Transfer Protocol, and Web services. Most of this is business-to-business, with
some companies attempting to use email and fax for unsolicited ads (usually viewed
as spam) to consumers and other business prospects, as well as to send out e-
newsletters to subscribers.
The benefits of e-commerce include its around-the-clock availability, the
speed of access, a wider selection of goods and services, accessibility, and
international reach. Its perceived downsides include sometimes-limited customer
service, not being able to see or touch a product prior to purchase, and the
necessitated wait time for product shipping.
To ensure the security, privacy and effectiveness of e-commerce, businesses should
authenticate business transactions, control access to resources such as webpages for
registered or selected users, encrypt communications and implement security
technologies such as the Secure Sockets Layer (TechTarget, 2012).

  2  
     Rafii  Saztura/IBA/05/MAY/2016  
 

3. BACKGROUND OF ALIBABA.COM

Alibaba.com operate leading online and mobile marketplaces in retail and

wholesale trade, as well as cloud computing and other services. Alibaba provide
technology and services to enable consumers, merchants, and other participants to
conduct commerce in our ecosystem.
Alibaba.com aim to build the future infrastructure of commerce. Alibaba envision
that our customers will meet, work and live at Alibaba, and that Alibaba will be a
company that lasts at least 102 years.
Alibaba enable millions of commercial and social interactions among our users,
between consumers and merchants, and among businesses every day.
Alibaba,.com empower our customers with the fundamental infrastructure for
commerce and data technology, so that customers can build businesses and create
value that can be shared among our ecosystem participants.
Alibaba.com strive to expand our products and services to become central to the
everyday lives of our customers (Alibaba Group, 1999).  
 
 
4. COMPANY PROFILE

ALIBABA GROUP was founded in 1999 by 18 people led by Jack Ma, a

former English teacher from Hangzhou, China. Jack ma started our company to
champion small businesses, in the 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 economies.

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
economies. Since launching its first website helping small Chinese exporters,
manufacturers and entrepreneurs to sell internationally, Alibaba Group has grown
into a global leader in online and mobile commerce. Today the company and its
related companies operate leading wholesale and retail online marketplaces as
well as Internet-based businesses offering advertising and marketing services,
electronic payment, cloud-based computing and network services and mobile
solutions, among others (Alibaba Group, 1999).

  3  
     Rafii  Saztura/IBA/05/MAY/2016  
 
5. SWOT ANALYSIS OF ALIBABA.COM

• STRENGHT

Ø The site has a team of three (Britain, China, Japan) to include

broader customers base.
Ø Alibaba increase segmentation of information and comprehensive,
so that more targeted and effective.
Ø The world largest Chinese forum.
Ø Large number of members.

• WEAKNESESS

Ø Alibaba’s website model is an intermediary form.

Ø Alibaba’s membership system to increase the fees in the process of
transformation, will lead to the loss of existing members.

• OPPORTUNITIES

Ø In China, several large banks and credits companies to participate

fully in the field of e-commerce, which the depth of the
development of e-commerce has created more opportunities.
Ø China is now spending up the development of e-commerce legal
provisions.
Ø The internet continues development and improvement, the
populations of computers.

• THREATS

Ø ALIBABA profits mainly in China, but China b2b business

environment has constrained the further development of Alibaba.
Ø B2B business site model, not only in the last few years with the
rapid development of the world.

  4  
     Rafii  Saztura/IBA/05/MAY/2016  
 

6. INNOVATIONS

If I am the CEO of Alibaba, I will expense the business in the each region of
the world, so the profits not only come from china but all over the world, so I can
reduce more threats because of this.
I decided to expense simply because the market share, I don’t want to just sit
in one market but I want to get all of the market shares as much as I can. So it is
not just about the profit but about the convenience of our customers all over the
world.
Customers can find us everywhere customers want, face to face with our
customers everywhere so I can maintain the customer’s relationships better and
then also getting more potential customers to our market.

7. CONCLUSIONS

ALIBABA is on of the largest e-commerce business in China, not also just a site
for buying or sell goods, customers also create a forum for their customers to
interact with each other’s, so customers can easily maintain and know really
Alibaba the behavior of their customers.
From that also customers can learn and know what their customers want and
then provide that as the new innovations of them.
But in the end customers need also to expenses their business to gain more
market share transformed into their profit, so the risk of the threat that customers
have will be smaller.

  5  
     Rafii  Saztura/IBA/05/MAY/2016  
 
Bibliography
TechTarget.  (2012,  October  21).  e-­‐commerce  (electronic  commerce  or  EC).  
Retrieved  November  21,  2012,  from  SearchCIO:  
http://searchcio.techtarget.com/definition/e-­‐commerce  
 
ALIBABA  GROUP.  (1999,  January  01).  Company  Overview.  Retrieved  January  02,  
2000,  from  Alibaba:  http://www.alibabagroup.com/en/about/overview  
 
Alibaba  Group.  (1999,  March  03).  Alibaba.com.  Retrieved  April  05,  2001,  from  
History  and  Milestone:  http://www.alibabagroup.com/en/about/history  
 
Harvard  Business  School.  (2014,  May  13).  Working  Knowledge.  The  Alibaba  
Effect  .  Cambridge,  Massachusetts,  United  States  of  America:  Havard  Press.  
 
Indian  Council  of  Medical  Research.  (2002,  July  2).  Competing  in  China  and  
Beyond.  Alibaba  .  New  Delhi,  Delhi,  India:  BS  Center  for  Management  and  
Research.  
 
University  of  Virginia.  (2014,  October  19).  Case  Study  Alibaba  Group  .  Mc  Intire  
Investment  Institute  .  
 
 

  6