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 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. The company took a series of initiatives in a bid to increase its global footprint. In June 2010, Alibaba acquired Vendio Services Inc. (Vendio). The site was linked to Alibaba’s network of suppliers and buyers. To fuel its global growth, in August 2010, Alibaba acquired Auctiva to reach US businesses and connect with buyers and suppliers outside China. In 2011, the company was also making efforts to increase its dominance in the Chinese web search market. In August 2011, it acquired Sogou.com, search engine of Chinese online portal Sohu.com, and in October 2011, it launched an online shopping site eTao to combat with Baidu. In December 2011, Alibaba announced that it was testing a social-networking product. This was part of its efforts to expand outside its e-commerce platforms to seek different streams of revenue, according to industry observers. The company was also planning to acquire Yahoo! China’s stake of 40 percent in Alibaba. Experts felt that all these initiatives would help Alibaba gain a stronger foothold in China since Internet penetration and e-commerce were rapidly growing in China.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Strategies to be adopted by Alibaba to increase its market share in the rapidly growing Chinese e-commerce market.
• Examine whether Alibaba could increase its dominance in the Chinese web search market by acquiring Sogou.com and challenge Baidu’s competitive position by launching eTao.
• Strategies to be adopted by Alibaba to defend its market share in the Chinese e-commerce market considering the competition was intensifying with the entry of other Chinese and global players.
• Analyze whether Alibaba could continue with its strong foothold in the Chinese e-commerce market and web search market with the acquisition of Yahoo! China’s stake in Alibaba.
• Strategies to be adopted to make its business model sustainable.

Keywords

Competition, Strategy, Business model, Innovation, Entrepreneur, Market leader, Global expansion, e-commerce, Small and Medium Enterprises, B2B, B2C, C2C, Web search market, Initial Public Offering , Alibaba, Taobao, eBay, Baidu, Google, China