Monday, September 30, 2013

Alibaba, a Chinese style Ariba

On reading the story of Ariba on New York Times, I came up with the idea of introducing a legendary company from China, whose history is quite similar to Ariba, but has expanded to become the world's largest online B2B trading platform for small businesses. Today, I am introducing Alibaba Group, a giant in E-commerce on a global scale, which is similar to eBay in the United States. And I would also like to share my opinions about its founder, Jack Ma.

Headquartered in Hangzhou, Alibaba Group was founded in 1999 by 18 people led by Jack Ma (Ma Yun), a former English teacher from Hangzhou, China who aspired to help make the Internet accessible, trustworthy and beneficial for everyone. Alibaba Group currently hires more than 20,000 people across the globe and has more than 70 offices in China, Singapore, India, the United Kingdom and the United States. It's a family of Internet-based E-commerce businesses that cover B2B, B2C, C2C online markets, retail and payment platforms, shopping search engine and data-centric cloud computing services. 

Alibaba Group's major businesses and affiliated entities include the following websites, and I will elaborate a little bit on my experience with these sites.
Taobao Marketplace - China's most popular C2C online shopping destination
Launched in May 2003, Taobao Marketplace ( is the most popular consumer-to-consumer (C2C) online marketplace in China catering to buyers who value product selection and price competitiveness. With around 760 million product listings as of March 2013, Taobao Marketplace is one of the world’s top 20 most visited websites according to Alexa. For the year ended March 31, 2013, the combined gross merchandise volume (GMV) of Taobao Marketplace and exceeded RMB1 trillion.
Experience: As a student who cannot afford too much for living necessity and clothing, taobao is my favorite shopping destination, as well as other Chinese college students and even white collars. We order food (snacks, instant noodles or drinks), clothing, accessories, stationaries, books, and almost everything on taobao. Although the User Interface is not as beautiful as that of Amazon or eBay, the low prices, detailed product descriptions and versatile search engine satisfied the needs of Chinese online shoppers. Its marketing campaigns were also remarkable during several times a year, such as Chinese Spring Festival, Chinese Valentine's Day, Single Day (11/11), etc. These huge campaigns might feature a 50% off everything in that single day, and the record-setting transaction amount usually becomes the top hit in next day's news. It's like an annual feast for Chinese online shoppers. Some added all the things they want into their shopping cart several days before the sale, and check out the moment the day arrived, which caused a huge traffic on the website and cast a great risk to server breakdown. - China's leading B2C shopping destination for quality, brand-name goods ( is an online shopping landmark in China dedicated to providing an excellent shopping experience. It was launched by Taobao in April 2008 to complement its consumer-to-consumer (C2C) marketplace and became an independent platform in June 2011. An open business-to-consumer (B2C) platform, has established itself as the destination for quality, brand-name goods catering to increasingly sophisticated Chinese consumers. It is the most visited B2C online retail website in China according to Alexa.
As of March 2013, more than 70,000 international and Chinese brands have established retail flagship stores on, and among those brands are UNIQLO, L’OrĂ©al, adidas, P&G, Unilever, Gap, Ray-Ban, Nike and Levi's. offers several product verticals with customized customer services, including Consumer Electronics mall; Book mall; Home Furnishing mall; Designer Footwear mall; and Beauty mall. and Taobao Marketplace set a record for highest single-day transaction volume during a special promotion on November 11, 2012, facilitating the sales of goods totaling RMB19.1 billion on the day. For the year ended March 31, 2013, the combined gross merchandise volume (GMV) of the two platforms exceeded RMB1 trillion.
Experience: I wasn't aware of the difference of taobao and Tmall, and thought Tmall was a part of taobao. After shopping on Tmall several times, I started to figure out the difference. Tmall is a host to well-known brands, compared to the fact that taobao hosts more often small businesses. Generally speaking, I felt that customer service and on-time delivery service are more guaranteed and satisfying with merchandisers on tmall, maybe because they are large brands.

Juhuasuan - Comprehensive group shopping platform in China
Juhuasuan ( is a comprehensive group shopping platform in China. It was launched by Taobao in March 2010 and became an independent platform in October 2011. Juhuasuan’s mission is to aggregate consumer power to offer a wide selection of high-quality merchandise and local lifestyle services at discounted prices.
Experience: Personally I believe Alibaba is a little bit too late to enter the group shopping marketplace. For group shopping, I might first consider or other groupon-style websites that has been in the run for a couple of years. The range of merchandisers are wider on other websites, and the deals are more appealing than those on juhuasuan.
eTao - Comprehensive shopping search engine in China
eTao ( is a shopping search engine in China which provides comprehensive information about products, merchants and promotional offers. It was launched by Taobao in October 2010 and became an independent platform in June 2011. Its mission is to create a “one-stop shopping engine” which can assist Chinese consumers in making online purchase decisions and help them identify low-cost, high-quality merchandise on the Internet faster.
Features and services offered by eTao include product search, deal and coupon search, hotel search, rebates and Tao Bar community. It reflects product results from various business-to-consumer (B2C) online shopping platforms and individual brands including Amazon China, Dangdang, Gome, Yihaodian, Nike China and Vancl, in addition to Taobao Marketplace and
Experience: I used etao to compare prices of the same product on various online shopping websites (within and outside of Alibaba entities), and made the best decision regarding price, reputation, and delivery time. - Leading global e-commerce platform for small businesses
Launched in 1999, ( is the leading global e-commerce platform for small businesses around the world. It aims to be the go-to English-language platform for cross-border trade and help small businesses worldwide expand to overseas markets. The platform, which now serves millions of buyers and suppliers from more than 240 countries and regions, showcases products ranging from raw materials to finished goods in more than 40 industry categories.
Experience: I created an account on Alibaba when I was conducting a research in e-business back in college(around 2008). By then, the user interface was horrible, but you still can figure out what you want about a product, and even contact the supplier online to discuss in detail, which was totally a new experience for me. Ariba is similar to, but obviously Alibaba Group has made it further. - Leading e-commerce platform for domestic China trade among small businesses
Launched in 1999, ( is the leading e-commerce platform for domestic China trade among small businesses. Started as a business-to-business (B2B) platform, has in recent years evolved into a wholesale and procurement marketplace with an increased focus on serving the product sourcing needs of sellers on the Taobao platforms.
AliExpress - Leading global e-marketplace for consumers
Launched in April 2010, AliExpress ( is a leading global e-marketplace made up of small business sellers that offer a wide variety of consumer products at great prices. It is dedicated to bringing unique products in more than 20 major product categories to its millions of registered buyers in more than 220 countries and regions.
Experience: Chinese students missed the low price of everything on taobao so much after we came abroad, AliExpress provided such a solution. I can shop the taobao merchandises abroad, with a taobao merchant and a taobao price. Though it might take longer to get your stuff, the low price is still worth the wait.

Alibaba Cloud Computing - Developer of platforms for cloud computing and data management
Established in September 2009, Alibaba Cloud Computing ( is a developer of platforms for cloud computing and data management. It is committed to building the first platform of choice for sharing data and offering data-centric cloud computing services. Alibaba Cloud Computing supports the growth of Alibaba Group and the whole e-commerce ecosystem by providing sellers on the Taobao platforms as well as third-party users with a comprehensive suite of Internet-based computing services, which include data mining, data processing and data storage.
Alipay - Most widely used third-party online payment platform in China
Launched in December 2004, Alipay ( is the most widely used third-party payment solution in China. It provides an easy, safe and secure way for millions of individuals and businesses to make and receive payments on the Internet. On November 11, 2012, Alipay set a record for the highest number of single-day transactions, processing more than 100 million payments during the 24-hour period.
The preferred online payment tool of Internet merchants in China, Alipay provides an escrow payment service that reduces transaction risk for online consumers. Shoppers have the ability to verify whether they are happy with goods they have purchased before releasing funds to the seller.
Alipay partners with multiple financial institutions including leading national and regional banks across China as well as Visa and MasterCard to facilitate payments in China and abroad. In addition to Taobao Marketplace and, Alipay provides payment solutions to merchants in a wide range of industries including online retail, virtual gaming, digital communications, commercial services, air ticketing and utilities. It also offers an online payment solution to help merchants worldwide sell directly to consumers in China and supports transactions in 14 major foreign currencies.
Experience: I felt safe when paying with Alipay, because the amount would only be deducted from my account once I got my merchandises and authorized the payment online.
Words about Jack Ma:
I respect Jack Ma as an aspiring public speaker and businessperson. Coming from education industry, he was so foresighted than other Chinese entrepreneurs that he foresaw the bright future of e-commerce in China back in 1990s. At the beginning of his entrepreneurship, he capitalized on his speaking skills formed when he was an English volunteer for foreign travelers in Hangzhou, to lobby government officers to support his e-commerce business. Like other start-up founders, he faced great pressure everyday trying to sell his idea to people who don't understand even a little bit of Internet. He was so determined that he finally made it possible and nurtured the company of its giant size today. From the perspective of corporate social responsibility, he is against Shark Fin trading on any of Alibaba's entities, and announced the banning of all shark fin sales on Alibaba. Also, as a father of 2 kids, he promised that Alibaba would never go into game businesses for the healthy environment for children's growth. A documentary film "Crocodile in the Yangtze", directed by former Alibaba executive, will tell the story in a more enticing way.

My questions this week would be:

1. With such a huge clientele, how can Alibaba Cloud Computing secure the privacy of its customers in a cloud environment?
2. It is said that Jack Ma is heading to build a supply chain company after he retired from Alibaba. How can he gain the 40% market share of logistics which is not contributed by taobao businesses? 

1. Online Marketplace, Better Late than Never
2. Film "Crocodile in the Yangtze"

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