Alibaba, started in 1999; a Chinese multinational company focusing on e-commerce business. It first hit off headlines in 2014, today has a turnover of millions. The mastermind behind is the legend “Jack Ma”, an English teacher who turned out to a successful entrepreneur.
Alibaba is basically an e-commerce site offering B2B, C2C & B2C services through websites and online portals. His main aim was to connect Chinese manufacturers with the world and use their products.
Alibaba Company owns different types of businesses under them, like Alibaba, Aliexpress, Alibaba cloud, etc.
|Alibaba.com||global wholesale market|
|AliExpress||global consumer market|
|1688.com||Chinese wholesale market|
Alibaba is mainly focused on the Chinese market. It has a group of people on one site and another group on another site. For instance, Alibaba focuses on wholesale retailers and consumers while AliExpress focuses on general people who need to buy one or two items from the supplier.
1688.com is mainly built for Chinese people under Alibaba for wholesalers and retailers of china.
For international aim, the main site alibaba.com helps in buying wholesale items while AliExpress.com was created for general people to have a retail service.
Alibaba also provides numerous sites for computing as start-ups in gaming and internet applications. This includes database services, storage, web hosting and domain name registrations.
They also provide SME loan business and lend vehicles licensed by the local government.
ALIBABA’S REVENUE GENERATION:
Pay for performance - in this seller’s auction for search results on cost-per-click at the prices by Alibaba's system.
Taobaoke - sellers on taobaoke and Tmall pay commissions to Alibaba. Commissions are set by sellers who want to generate sales through that channel.
Sellers also pay some amount to purchase promotional activities at the Juhuasuan marketplace.
Alibaba generates some revenues from transactions over AliExpress.
The main revenue is also generated by the gold supplier membership on Alibaba, which allows wholesalers to host storefronts.
Alibaba’s storefront software includes many unique tools that one has to subscribe to. It requires a monthly subscription fee which users have to pay for.
The main revenue is primarily generated by 1688.com as it gives subscriptions for wholesalers. The main revenue is generated by the “gold membership” in which facilities like value-added-tax and other import-export business solutions.
Network of Alibaba Group:
TAOBAO : Launched in 10th May 2008
Allows B2B and C2C trade by allowing anyone to put their products on sale. This site grew so bold and strong that it made eBay shut their business down in China. It’s the main and the biggest shopping website in China.
People who wish to sell can join this site for free; there is no subscription fee to sell your products here.
It has a rating system and works just like google. One just has to put keywords of the product they need. Buyers can always ask questions through Alibaba’s messenger software.
TMALL : Launched in April 2008
It offers Chinese products of a wide range. Its target customers are middle-class Chinese people.
It has more than 500 million active users and is almost similar to amazon and eBay.
Tmall makes money through various strategies like, commission, service fees and marketing services provided to suppliers.
It’s a Chinese version of Adsense. It is an online trade site for publishers and advertisers. It lets one advertise on the basis of an advertisement plan or cost per impression or cost per time.
Its main motive is to make money through advertisings.
A global marketplace just like amazon. It allows people all over the world to buy from manufactures in China.
Aliexpress makes money by the commission on the transaction of goods. It has 5-8% of transaction value.
It has also a fixed charge for the subscription of aliexpress.
It is an e-wallet just like PayTm which helps people to store and transact money.
It doesn’t charge any money and is completely free to use and pay or store money.
1688 : Launched in 2010
Yet another wholesale business segment of Chinese suppliers. It also supplies products to all parts of the world.
It gains money by subscription fees for sellers to hold premium storefronts with access to a unique set of tools.
It charges people through premium data and online marketing services.
So, these are some major Alibaba sites that generate a lot of revenue. There are many minor sites by Alibaba like the Cainiao network, Youku Tudou. Chinese people have every possible replica of the main app to their app.
WHAT MADE ALIBABA SUCCESSFUL?
Unique Business: Alibaba's main revenue segment isn’t generated by big business companies, its main sector belongs to small producers who try to do big. Eventually, many small producers joined hands and made Alibaba big. In 2014, Alibaba had a transaction value of approx $340 million.
Alibaba created a competition of advertisements between suppliers which made them compete with each other and thus raising money.
While eBay was charging money to register people, Alibaba made their basic set for free which attracted customers and eventually made eBay shut down.
All sellers of Alibaba are verified first and are then registered. Therefore, this reduces the chances of illegal or fraudulent transactions and also protects the consumer’s rights.
Alibaba gathers people with similar needs and turns them into a group; this makes them buy a product at wholesale and at a lower price. This strategy has moved a lot of customers and thereby increased the sales.
By scanning a 2-D code, people can buy products even if they are offline. In these cases Alibaba promotes the use of Alipay making people use these particular apps more than any other source.
CHINA SMART NETWORK (CSN) was launched by Alibaba in collaboration with the 4 most influential companies of china with the aim of delivering products within 24hours of purchase. Moreover, customers were given the choice of selecting different modes of deliveries like the fastest/safest, etc.
ALIBABA DURING COVID-19:
As being the most powerful network of China, Alibaba had some moral roles for its people. To do its best, Alibaba launched healthcare facilities for people; they started providing online clinic service for Hubei province, and later on were allowed to access by everyone.
Alibaba’s team in fact developed an AI-based machine for CT scans. The company claimed that it could differentiate between a normal pneumonia and coronavirus - pneumonia. This came into use by 26 hospitals at an initial stage and later was available in most of the hospitals across China. Moreover, they made their cloud app free to everyone so that global institutions can make their efforts in gene sequencing upon coronavirus.
we can say that the main priority of Alibaba has always been china. But its business methods are so tricky and beneficial that one should know about them. No doubt Alibaba is the best among all.
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