1. By: Carlos Fandino and David Arnold
Alibaba Case Study
By: Carlos Fandino and David Arnold

2. The following slides are David Arnold’s slides.
What is Alibaba?
Alibaba Group Holding Limited (BABA)
e-Commerce conglomerate from China
C2C (Taobao.com), B2C (Tmall.com), and B2B (Alibaba.com) sales
Payment system (AliPay)
AliExpress.com (Global E-Commerce):　Launched in 2010, AliExpress.com is an online retail service made up of small businesses in China and elsewhere offering products to international online buyers.
Sixth largest internet company by revenue

3. AliPay®, AliPayDiscover®,
AliHealth℠™,
Alibaba Real Estate℠™, etc…

4. Background Alibaba.com was founded on April 4, 1999 by Jack Ma
Was founded in his Apartment
Launched with 17 other co-founders
Operates in ~81% of countries
50,092 Employees (2017 Study)
Average employees per year since 1999

5. Background Alibaba’s announced IPO on September 18, 2014 at NYSE
IPO was $68, the world’s largest IPO to date
Raised $21.8 billion
Alibaba officially went public on the NYSE on September 19, 2014
Opening price of $92.70
Opened at 11:55 AM
Totaled $25 billion

6. Alibaba Milestones
First gained profit in 2001 after raising funds ($25 million) from institutions such as Goldman Sachs, Fidelity, and several others.
In November of 2007, Alibaba was listed on the Hong Kong Stock Exchange.
May 2012, Alibaba withdraws from Hong Kong Stock Exchange
September 2014, Alibaba goes public on NYSE
May 2017, Alibaba reached the $300 Billion value mark
July 2017, Alibaba reached the $400 Billion value mark
First Asian company to do so

7. Companies Owned By Alibaba
Alibaba.com - Primary company, online B2B
Taobao - Online C2C
AutoNavi - Map supplier
Alipay - Online payment platform (no transaction fees)
Yahoo! China
Ali Health - Health-care unit
Alisports - Sports division
Alibaba Pictures - Online entertainment and other media

8. Company Culture of Alibaba - People
People with a dream
People with shared values
People with a smile
People who enjoy work, and can turn stress and challenge to innovation
People who work together
Link 23

9. Company Culture of Alibaba - Values
Blue Sky (蓝蓝的天)
Solid Ground (踏实的大地)
Free-flowing ocean (流动的大海)
Green Forest (绿色的森林)
Harmonious Community (和谐的社区)
Link 23

10. Controversies - Gold Supplier Membership (2011)
Subscription based membership that ensures each supplier is real.
Indicated by a “Gold Supplier” stamp of approval
Controversy when several Gold Supplier attempted to defraud buyers
Alibaba confesses that nearly 2,000 Gold Suppliers were fraudulent
Caused a sharp drop in the company’s share price
Made a statement promising corrective action
Jack Ma struggled to earn back the public’s trust

11. Controversies - Uranium Sales (2012)
US Law Enforcement posed as someone looking to purchase uranium on Alibaba.com
Patrick Campbell extended the offer and was arrested at JFK airport, with uranium found in the soles of his shoes
Accused of trying to export 1,000 tons of uranium from Sierra Leone to Iran

12. Controversies - Counterfeiting and Scams
Alibaba often associated with counterfeit items
Taobao listed as a counterfeit platform
AliExpress
Provides buyer protection but refuses to issue refunds for items taken by customs or when fraudulent businesses disappear after their scam
Alibaba denies any wrongdoing and does little to combat counterfeiting

13. Alibaba.com Model Operating in over 200 countries
The following slides are Carlos Fandino’s slides.
Alibaba.com Model
Operating in over 200 countries
Helps Sellers to Meet Buyers
Run two different platforms
One in Chinese for Chinese
One in English for International Customers
19.8 Million registered users

14. Workflow Listing Posted
Listing are searched, contact information is exchanged
Negotiation Process
All the tools needed for final business is provided on website

15. Philosophy 1. Customers come first 2. Employees 3. Shareholders
Mission and Vision Driven Company

16. Tmall.com vs Amazon
Amazon buys goods from suppliers, and sells them to customers.
Both very successful companies
Alibaba was the first real test for amazon in the US

17. Chinese Consumer Growth
Huge increase in white collared middle class
China is changing to manufacturing oriented to consumption- driven economy
The alibaba SEC Prospectus quoted “ Our business benefits from the rising spending power of chinese consumers”.

18. Competitive Advantages
Experts in connecting buyers and sellers in e- commerce (middleman)
Economies of Scope and Scale
Good relationship with the Chinese government
40% profit margin
Biggest IPO Value

19. Investments In the US Market Alibaba has made investments with:
Vendio Services Inc.
Shoprunner
Quixey, and TangoMe Inc.

20. Alibaba and the O2O Environment
Alibaba has heavily been investing in Instant Messaging App
Develop Mobile Operating System ( They tried and failed)
Example Such as Amazon with kindle
Leverage Customer Database

21. Revenue Break down in Alibaba Revenue chart
Majority of revenue came from China commerce retail business.

22. Future Stock Rapidly Increasing, Strong Brand, and enormous scale.
Growth and margins should justify high valuation