1. By Mirela Todorova

2. Overview of Alibaba Group
Founded in 1998, based in Hangzhou, China
By 2010, over 50% of B2B e-commerce and 70% of online shopping for China
Connects millions of users in more than 240 countries and regions
Employs almost 20,000 people in B2B sales, computer engineering, customer service
Private company with estimated valuation $55 billion to $120 billion

3. Alibaba Group Company Portfolio
Alibaba.com international B2B marketplace
Alibaba.com.cn Chinese, Japanese, Korean
Taobao.com Chinese largest online shopping
Alimama.com Chinese online marketing
Alisoft.com Chinese management software and cloud computing services
Alipay Chinese online payment services
China Yahoo! strategic partnership with Yahoo!

4. Alibaba Group Timeline
December 1998, Jack Ma and other 17 founders of Alibaba Group named Alibaba.com and raised $25 million from SoftBank, Goldman Sachs, Fidelity and SOFTBANK
December 2002, Alibaba.com achieved profitability
May 2003, Taobao.com was founded as a consumer e-commerce platform
December 2004, Alipay.com became an independent business service
October 2005, Alibaba Group took over the operation of China Yahoo!
November, 2007, Alibaba.com successfully listed on the Hong Kong Stock Exchange.
April 2008, Taobao established Tmall.com (originally called Taobao Mall) B2C platform
September 2008, Alibaba Group R&D Institute was established
September 2007, Alisoft.com established with own sales team
May 2010, announced a plan to allocate 0.3% of its annual revenues to fund environmental protection initiatives
June 2011, Alibaba Group reorganized Taobao into three separate companies: Taobao Marketplace, Taobao Mall (Tmall.com) and eTao
July 2011, Alibaba Cloud Computing launched its first self-developed mobile operating system, Aliyun OS over K-Touch Cloud Smartphone
January 2012, Taobao Mall changed its name to Tmall.com to sell brand-name products

5. Alibaba.com History
1998, over 40 million private small and medium-sized enterprises (SMEs with 50 to 100 employees) in China needed a good communication channel and info source to market, sell products, evaluate trading partners
Jack Ma began as an English teacher in China, worked for the Chinese government business deals, started online China Pages company similar to Alibaba.com but was bought out by China Telecom
1999, Jack Ma started Alibaba.com to connect mainly small Chinese manufacturers with retailers, trading companies, downstream manufacturers
Started as a free service to registered users
By 2008, 1% of users paid for value-added international Gold Supplier and China Trustpass membership programs
Gold Supplier provided enhanced online storefronts, prioritized listings, company profile authentication, real-time performance analysis
China TrustPass provided similar services globally, and more payment services
David Wei is CEO of Alibaba.com

6. Growth of Chinese B2B Market

7. Alibaba.com Revenue and Growth
By 2008, operating profit increased by 48% to $172 million, total revenue to $432 million
By end of 2008, alibaba.com (international) had 7.9 million users and 970,000 storefronts and alibaba.com.cn (domestic) had 30.2 million users and 3.6 million storefronts—today over 40 million domestic
Paying customers increased by 41% yearly to 432,031 in 2007
Launched Alibaba.com in Korean and Japanese as well
Revenue stream: value-added services and commissions from financing, shipping and insurance services ordered by users in bulk

8. Alibaba.com Business Model
B2B e-commerce between suppliers and wholesale buyers
Company profiles, online catalogues called storefronts with listings of products and services
Over 30 industry categories and 5,000 product categories
Buyers can search using keywords, browse online industry directory, or post listings to buy
Active listings, instant messaging, , discussion forums and other community features
Trust ratings for suppliers and buyers
Free or fixed subscription fee
Mission Statement: “To make it easy to do business anywhere”

9. Value-added services Gold Supplier and TrustPass memberships
Keyword bidding services: Ali-Advance used by Alibaba.com and Zhi Tong Che used by Taobao.com
Sellers can bid for keywords and preferential ad ranking on Chinese search page
“Pay for performance” contracts meant sellers paid only when customers clicked on their ads
Ali-loan program partners with Chinese banks and uses sales, payments and collections data to offer loans to Alibaba.com's paying customers:
Credit loan: company-established credit score on Alibaba.com assists businesses in borrowing
Security loan: borrow (with a mortgage) to buy equipment
Joint liability loan (group loan): Multiple small companies in one supply chain borrow using their credit scores online and guarantee to support each other
Ali-Talk real-time communication service on Alibaba.com

10. Other Alibaba.com supporting businesses
2005 purchased China Yahoo! ( to offer search, , entertainment but Chinese search engine market share fell from 21% to 6% by 2009 competition from Google and Baidu
Alipay escrow service held customer payments until purchased goods were delivered—built trust
By 2008, had 50% of all online payments in China
Competes with PayPal internationally
2006 started Alisoft.com to provide enterprise management software, inventory management, financial management, and Cloud Computing and mobile OS by 2011
2007 started Alimama Chinese advertising exchange
Small and large ad publishers can offer their ad inventory and ad agencies can book the ads
Inventory of billions of ads

11. Competition Global Sources: Hong Kong-based international B2B website
Reaches 230 countries, but has less total users
Offers similar services as Alibaba.com
Has additional services such as monthly trade magazine for consumer products, other monthly magazines and sourcing research reports, trade-specific exhibitions in China
ChinaChemNet: vertical coverage of chemical industry in China
Other marketing service providers and trading channels like search engines and magazines

12. Alibaba.com goes Public
Alibaba Group remained private but listed 19.25% of Alibaba.com and Alibaba.com.cn on Hong Kong Stock Exchange in Nov. 2007
IPO $1.7 billion and stock tripled in value on first day, trading at 306 times projected 2007 earnings
Benefits
Publicity and recognition for B2B customers
Attracted management talent
Equity-based incentives for management
CEO Jack Ma continued to focus on building a Chinese brand rather than quarterly profits

13. Corporate Strategy: Decentralization
To maximize flexibility, Alibaba Group subsidiaries have independent technology teams—no Chief Technology Officer
Technology platform includes systems architecture and development, data analysis, data storage, and application development
Bottom-Up process for annual budget, strategy and operating plans:
Every fall, subsidiary Presidents submitted plans to Group corporate headquarters for review by Chief Strategy Officer, CFO, Chief People Officer and CEO
Presidents encouraged to do what’s best for their subsidiaries and not to force BU synergy

14. Corporate Culture: Entrepreneurial
“Company will remain a start-up no matter how long it has been in existence”—Jack Ma
Values
Entrepreneurial and innovative spirit
Customer service
Transparency in processes, systems, decisions
Solid financial ground, ethics
Contribute to welfare of society
Rotate managerial talent
Harmonious and supportive internal environment

15. Alibaba.com Future
Alibaba Group CEO Jack Ma plans to step down in 2013
Plans to expand through acquisitions, investments, licensing and partnerships
Expand user base and value-added services
Widen geographic coverage
Advance technology with user demand
Cross-selling and marketing with other Alibaba Group subsidiaries

16. Quiz Question 1 Tmall.com is typically categorized as a A. B2B website
B. C2C website
C. B2C website

17. Answer 1 Tmall.com is typically categorized as a A. B2B website
B. C2C website
C. B2C website

18. Quiz Question 2
Which Alibaba.com supplier value-added service provides authentication and enhanced online storefronts, prioritized listings, and real-time performance analysis?
A. PassTrust
B. Gold Supplier
C. Alibaba Platinum
D. Ali-Business

19. Answer 2
Which Alibaba.com supplier value-added service provides authentication and enhanced online storefronts, prioritized listings, and real-time performance analysis?
A. PassTrust
B. Gold Supplier
C. Alibaba Platinum
D. Ali-Business

20. Quiz Question 3 Who is the CEO of Alibaba Group? A. David Wei
B. Jack Ma
C. Daniel Wong
D. John Min

21. Answer 3 Who is the CEO of Alibaba Group? A. David Wei B. Jack Ma
C. Daniel Wong
D. John Min

22. Quiz Question 4 True or False?
Both suppliers and buyers can post on Alibaba.com for free

23. Answer 4
True or False?
Both suppliers and buyers can post on Alibaba.com for free

24. References
“Alibaba.com: A Smiling Community with A Dream.”
Farhoomand, Ali. “Alibaba.com” Asia Case Research Centre University of Hong Kong
Wulf, Julie. “Alibaba Group.” Harvard Business School. April