Business Model And Revenue Model Of Alibaba

Business Model And Revenue Model Of Alibaba

Alibaba Group is a privately owned Hangzhou-based family of Internet-based businesses that includes business-to-business international trade, online retail and payment platforms and data-centric cloud computing services.
Jack Ma, the founder of Alibaba, is reportedly the first to have launched a commercial website in China. In September 1995 Chinapages.com, a directory of companies, goes online and from then on there was no looking back.
How it started…
“Made in China” is a familiar label in supermarkets, electronic stores, fashion outlets, and department stores everywhere. But how do those shoes, toys, TVs, and so on actually find their way onto the shelves?
Traditionally, they had to pass through a long chain of intermediaries: Factories -> trading companies -> importers -> distributors -> retailers -> consumers.
A middleman takes a cut every time the goods change hands, which is how a pair of shoes sold by a Chinese factory for $8 to $10 wind up costing $50 to $100 in a shoe store in the west.
Buyers always want to go up the food chain and find cheaper suppliers. Factories always want to go down the food chain and find buyers who pay better. But the opaque process of traditional trade made it difficult for both parties to achieve their ends.
Low margins have long been a problem for small factories in China. Without a way of marketing themselves globally, they are often at the mercy of a few large trading houses.
Open sesame
Alibaba’s solution was simple – let Chinese suppliers put their information online, the products they make, their prices (optional), and their contact information. Overseas buyers can read these messages and contact the factories directly, either by e-mail or phone and fax. Similarly, buyers who need certain products can put their requirements online and wait for interested suppliers to contact them.
It is basically an electronic message board, but for trade, both domestic and international, rather than...