Alibaba: Competing in China & Beyond
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Case Code: BSTR288 Case Length: 23 Pages Period: 1999-2008 Pub Date: 2008 Teaching Note: Available |
Price: Rs.400 Organization: Alibaba.com Industry: Internet and E-Commerce Countries: China Themes: Competition, Innovation, Growth Strategy, Emerging Markets, |
Abstract Case Intro 1 Case Intro 2 Excerpts
"Alibaba has a first-mover advantage that makes it very hard for competitors to chip away at their lead in the market."
- Dick Wei, Analyst, J.P. Morgan Securities Inc., in 2007.
"For us, the goal has been to build a company that lasts 102 years and a company that changes China. We're only six years old, so while other people may call us a success, we still do not consider ourselves successful yet. We have a long way to go and the intense competition is what keeps us sharp. The success we've had so far has not made us lose our edge."
- Jack Ma, Founder and CEO of Alibaba.com, in 2006.
"If there's a company outside of America that can introduce a new business model to the world, it's Alibaba."
- Masayoshi Son, Founder and CEO, Softbank Corporation, Japan, in 2005.
Introduction
In February 2008, Alibaba.com Corporation (Alibaba), China's leading e-commerce company, was ranked 8th in the World's Most Innovative Companies list by Fast Company Magazine, a US-based business publication (Refer to Exhibit I for a list of World's most innovative companies).
Alibaba was recognized for its simple website that provided easy-to-use features connecting buyers and suppliers all over the world.
Alibaba had several Internet businesses focused on various e-commerce business models such as Business-to-Business (B2B), Consumer-to-Consumer (C2C), and Business-to-Consumer (B2C). It also had a presence in the intensely competitive web search market. Being one of the first companies to enter the Chinese Internet industry, Alibaba played a major role in bringing about an Internet revolution in the country (Refer to Exhibit II for a brief note on the Internet market in China). Alibaba was launched with the vision of serving the small and medium enterprises (SMEs) in China and across the world. As of 2007, it had 24.6 million registered users spread across more than 200 countries.
According to Analysys International (Analysys), Alibaba had been the clear market leader in the rapidly growing Chinese e-commerce market with a market share of 69.04 percent in the second quarter of 2007. However, the company lagged behind in the Chinese online search engine market despite having acquired Yahoo! China's operations in 2005. The Chinese search engine market was dominated by players like Baidu.com, Inc. (Baidu) and Google Inc. (Google) with market shares of 74.5 percent and 14.3 percent respectively in September 2007. Moreover, with Baidu announcing its plans of foraying into the rapidly growing e-commerce market in 2008, competition was expected to intensify for Alibaba.
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