Alibaba in 2011: Competing in China & Beyond
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Case Code: BSTR404 Case Length: 23 Pages Period: 2004-2011 Pub Date: 2012 Teaching Note: Available |
Price: Rs.500 Organization: Alibaba Group Industry: E-Commerce Countries: China; Global Themes: International Business, International Management |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Alibaba in its Initial Years
In 1998, Ma left MOFTEC and returned to Hangzhou to fulfill his dream of establishing his own e-commerce company. He said, "I realized that you can never expect a government company to grow. So I left to set up my own." Ma gathered 18 people in his apartment to explain his vision to them. He warned his colleagues who wanted to join him that his venture was a risky one and that they would be paid only Renminbi (RMB) 500 every month. He gave them three days to think it over. He was touched when, finally, all 18 of them decided to follow him to Hangzhou. Ma and his colleagues put in some money...
Business Portfolio
Despite its struggles, by the year 2000, the Alibaba Group had emerged as the largest e-commerce company in China and was one of the leading players in the international e-commerce market. Alibaba was the flagship company of the Alibaba Group with marketing and sales offices across Beijing, Seoul, Silicon Valley, London, Japan, and Latin America. Alibaba's business portfolio included the following: ...
The Competition
Alibaba was launched at a time when the Chinese Internet industry was in its infancy. Considering the growth potential of the budding e-commerce market, other players like Global Sources and MeetChina were launched in 1999...
Another IPO at Alibaba?
In June 2011, Ma expressed his desire to raise an IPO for the Alibaba Group. In a letter to his employees, Ma said, "We won't rule out the possibility of taking Alibaba Group public in the future, as a way to reward our employees and shareholders who support and continue to believe in us." Earlier in October 2007, Alibaba went public on the Hong Kong stock exchange by launching an IPO (Refer to Exhibit V for Alibaba's IPO in 2007)...
Outlook
For the year ended December 31, 2010, Alibaba's revenues grew by 43.4 percent to RMB 5.55 billion as compared with revenues of RMB 3.87 billion for the FY ended December 31, 2009. The revenue growth was attributed to the increasing number of paying members at Alibaba's online trading platform. With the growth in revenues and paying members, Alibaba was touted to be one of the biggest Internet companies in China in 2011. However, its image took a beating when the company reported a series of frauds that took place through its e-commerce site, in February 2011...
Exhibits
Exhibit I: Internet Market in China
Exhibit II: Types of Membership at Alibaba.com
Exhibit III: e-Commerce Market in China
Exhibit IV: Growing Internet Usage in China (2010)
Exhibit V: Alibaba's IPO in 2007
Exhibit VI: Alibaba.com's Three Year Financials (RMB in Thousands)
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