Why has Alibaba become so successful?

Alibaba’s success is no secret. From its beginnings in Jack Ma’s apartment, the company has evolved and grown into an e-commerce empire known internationally. What exactly is it about Alibaba that has enabled it to succeed? Here are my thoughts on why it’s now a household name:

Business Model

Alibaba provides services mainly to small enterprises and individuals. This defines a unique business opportunity which provides small enterprises with an improved buying power and offers more diversified consumption choices for consumers.

Unconventional Profit Model

Presently, the Alibaba platform represents more than 0.5bn registered users, including more than 0.23bn active buyers and more than 8m active sellers, and annual orders have exceeded 11bn CNY.

Alibaba charges for services in marketing and technical support, instead of for registration or use. This contributes to a large and robust market share made up of loyal customers. Its profits therefore come mainly from advertisements and keyword bidding from the seller community.

Supplier/ Buyer Financial Trust

All sellers on the eCommerce platform are requested to pass an online certification test to verify their identity either as a business or individual. This reduces illegal transactions as sellers are supervised on the platform at all times. All transactions are recorded and can be traced back by both sellers and customers. This protects the legitimacy of each transaction and helps buyers select more reliable sellers.

Support Services for Customer

Alibaba’s service offerings provide an environment of mutual trust and positive online customer experience, leading to high user engagement. Alibaba offers a suite of support services (e.g. inspection, quality assurance and legal support) to ensure optimal customer satisfaction by helping sellers to maintain positive interaction with buyers.

Making the leap?

For the average Joe, or even the large corporate organisations, this gateway represents a new way of sourcing goods from Asia, which previously was limited to global businesses or the brave few.

Here at Harvard Solutions, we are encouraging our customers to find the products or services they want through portals such as Alibaba, China Sourcing etc.

We subsequently add value for our customers by being able to work with both parties to create the best deals, the right products first time and a seamless supply chain, limiting the risks associated with that first step.

If you interested in hearing more about what Harvard Solutions can do for you, then please contact us for a free initial consultation.