StudyCorgi Business & Economics

Alibaba Group’s Progress and Influences on Industry

Introduction

Alibaba I Alibaba is a company that provides online services to businesses and consumers. The company acts as an intermediary and connects buyers and businesses using their online platforms or websites. The websites developed by the company, which comprise Taobao and Tmall, play a pivotal role in facilitating interaction between consumers and businesses. It is important to explain that the major concern, which triggered the establishment of the company, is the need to connect businesses with clients so that the process of searching products becomes less challenging. The need transpired from personal experience that the founder of Alibaba, Jack Ma, went through when he visited the United States in 1994. Over time the company has grown and is currently one of the topmost traders on the New York Stock Exchange (NYSE).

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Summary of the Company’s Growth

Alibaba is one of the leaders in the field of innovation and technology. Since its inception, the company has continually transformed the manner in which buyers and sellers interact and execute the overall process of purchase. The company came into existence when Ma, who is the founder of Alibaba, realized that accessing a product in online platforms was challenging for many individuals in and outside Asia. Lee and Ma assert that during one of his visits to the United States in 1995, Ma observed that accessing a Chinese beer via online platforms was a challenge (15). The realization triggered the idea of establishing a company that would act as an intermediary between buyers and sellers.

Although his primary company flopped, his second company, Alibaba, succeeded and has become a household name in Asia and the United States. One of the company’s cornerstones is the facilitation of interaction between enterprises especially smaller ones with potential clients. Although the company began and focused in Asia, it has gradually expanded to other parts of the world and currently operates in more than 150 countries. Its recent entry into the New York Stock Exchange (NYSE) where it attained the highest level of IPO confirms that Alibaba is indeed a leader in the technology industry. Peng explains that millions of potential clients visit Alibaba’s websites, Taobao and Tmall, which are consumer-to-consumer and business-to-consumer respectively (315). Therefore, the company’s platform that enables buyers and consumers to exchange ideas, buy, and sell products was timely in that modern consumers need convenient services that do not affect their schedules.

Ideas Associated with the Company

Improved Product Marketing and promotion

Since the inception of Alibaba, product marketing, and promotion in places such as Asia have improved. Improved marketing emanates from the main ideas associated with Alibaba as a milestone. Apparently, the company focuses on creating a platform where consumers and sellers interact and engage in a manner that dictates the purchase of products. Therefore, by creating a platform that encourages buyers and sellers to interact, the company gives sellers the opportunity to win the hearts of their potential clients by ensuring that their pricing, distribution, and branding of their products match market demands. In essence, the organization of price, distribution, branding, and promotion make up the concept of marketing. According to Lamb et al. price, place, promotion, and product comprise the main components that constitute marketing (47). Therefore, the opportunity that Alibaba accords to its clients is an indirect way of marketing their products because the platform used to win the hearts of consumers belongs to Alibaba.

Improved product promotion is another main idea associated with Alibaba. While the company enables small brands to market their products, it also helps them promote their products before potential clients. In effect, promotion is one of the aspects constituted in the marketing mix of a company. As such, in the process of marketing their products, the companies can devise strategies and use the Alibaba platform to advertise their products in a persuasive and creative manner. Küçük states that several companies in the modern world utilize online platforms to advertise their products to consumers all over the globe (91). Therefore, Alibaba not only helps the companies promote their products within Asia but also across continents and in parts such as Europe and the United States. Without Alibaba, some small brands could not have gained their present popularity and consumers could not have accessed high-end products delivered by these companies. Therefore, from the operations of Alibaba, it is clear that it utilizes the concept of promotion as one of its major ideas.

Convenience and Improvement of Product Quality

Convenience and improvement of product quality also comprise the main ideas associated with Alibaba. After returning from the United States, Jack Ma who is the founder of Alibaba focused on establishing a platform that would help sellers and consumers interact without adjusting their busy schedules. In the perspective of Yu and Yan, Ma observed that several individuals wanted a platform where they could access and purchase a product or service of their choice from the comfort of their rooms or places of work (385). In his experience, Ma could not access a Chinese beer in any online site while in the United States. Therefore, he developed a platform that focuses on convenience.

Notably many consumers of the time are unwilling to travel to places away from their homes or workplaces in order to purchase a product. Instead, these individuals prefer products that are within their easy reach in place of those that are far or unavailable. To address the issue of convenience and ensure that consumers access products in an efficient manner, Alibaba created a platform that facilitsate buyr- seller interaction where an eventual purchase leads to product delivery at a client’s place of choice (Evans and Schmalensee 60). Notably, the main factor that makes Alibaba succeed in business is its ability to facilitate convenience between clients and sellers who interact and make purchases online without chaining with their schedules.

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Although the company does not compel vendors to improve the quality of their products, it creates a platform where potential buyers compare products delivered by a number of organizations. The comparison makes those companies that do not succeed in persuading potential clients to improve on quality so that their products win the market share and match market expectations. Eventually, the products delivered by a number of companies using the Alibaba platform amplify the quality of their products as they strive to match market dynamics. Evans and Schmalensee explain that another aspect, which makes Alibaba an indirect dictator of product quality, is the high amount of information that companies receive from potential consumers via the platform (62). Out of the platform, several companies in and outside Asia acquire useful information on how other enterprises around the world win the market share. Therefore, it is conclusive to allude that improvement of product quality is indeed one of the main ideas associated with Alibaba.

Company’s Initial Influence

Slow Reception and Competition

Although Alibaba is a household name in several parts of the world, its initial influence was not devoid of challenges and issues of consumer apathy. During its initial stages, some consumers were reluctant to use the platform, a factor that complicated Alibaba’s struggle in the journey to win the market share. it is imperative to outline the fact that the company came into existence at a time when the Asian region was not fully conversant with the internet and its application in marketing. Moreover, a number of people in the Asian region had a negative perception concerning the internet, a phenomenon that held back the initial influence of the company. Several individuals were reluctant to use services advertised by Alibaba and in a similar vein, a number of enterprises were unwilling to market or promote their products via the company’s platform. According to Lee and Ma, reluctance by larger enterprises to use Alibaba to market their products is one of the factors that initiated the company’s drive to promote small enterprises (20). O vertime, the company’s influence began improving and it started challenging its competitors in the Asian region.

As Alibaba continued progressing in Asia, eBay and Amazon proved to be its major competitors. While companies such as Amazon provided substitute services and products to the consumers, eBay offered services similar to those offered by Alibaba. Moreover, the two companies, eBay and Amazon, were already established during the inception of Alibaba. Their presence in the mar-et implied that they had a good reputation before the Alibaba’s target clients. In effect, the slow reception experienced by Alibaba as aforementioned was partly an outcome of the positive reputation that its competitors enjoyed prior to its entry into the market. Yu and Yan note that while Amazon has warehouses and stores that enable them to undertake direct sales, eBay and Alibaba are intermediaries that connect buyers and sellers in an online platform (261). Conversely, the company continued strategizing and eventually won the market share to become one of the leaders in the market.

Continued Influence of the Company

Expansion and Diversification

Fundamentally, Alibaba has continued influencing modern consumers not only in Asia but also across the globe. The impact of the strategies utilized by Alibaba has enabled it to outsmart its competitors and enjoy a reasonable market share even in the face of cutthroat competition. Apparently, expansion is one of the strategies that have amplified the company’s influence globally. An increasing number of consumers are beginning to use the platform provided by the company. It is important to note that the company is gradually taking over the regions initially held by its competitors. Lee and Ma explain that regions such as China initially held by companies like Amazon and eBay have gradually become loyal to services offered by Alibaba (316). The assertion coins the fact that Alibaba has gained popularity in regions that initially belonged to its competitors. Presently, the company operates in more than 159 countries, a confirmation that indeed the company has expanded and its influence is on the rise.

Another factor that has augmented the influence that Alibaba enjoys he modern times is diversification. To outsmart its competitors and increase its influence in and outside the Asian continent, the company diversified its services to include payment systems and websites that have numerous varieties of products. Taobao is one of the websites that help consumers market and sell their products to other consumers. Consequently, Tmall is a website that helps businesses to sell their products to consumers. By developing websites that enable consumers and businesses to interact, the company not only won the hearts of potential clients but also augmented its influence as compared to its competitors. To address the issue of payment that was present in competing firms such as eBay, Alibaba introduced its own payment system. Alipay is a payment system that helps consumers and businesses make payments once a particular purchase materializes. By introducing a payment system, the company placed itself in a better position of outsmarting its competitors and improving its influence across the globe.

Conclusion

Alibaba is one of the companies that have risen to be a leader in the field of online marketing. The company provides a platform, which enables consumers and busines toses buy and sell their wares. The platform provided by the company has enabled it to dictate the market in relation to online business. Improved marketing, promotion, convenience, and improvement of product quality are some of the ideas associated with the company. Notably, these ideas are evident from the operations undertaken by the company. The influence of the company has increased from a position where the clients were reluctant to utilize its platform to the present level where the company enjoys a large market share in relation to competitors like Amazon and eBay. To win the market share and amplify its influence globally, the company expanded its operations and delved into ventures that improve the efficiency of services that it delivers.

Works Cited

Evans, David, and Richard Schmalensee. Matchmakers: The New Economics of Platform Businesses: How One of the Oldest Business Models on Earth Powers the Most Incredible Companies in the World. Harvard Business Review Press, 2016.

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Küçük, Umit. Visualizing Marketing: From Abstract to Intuitive. Palgrave Macmillan, 2017.

Lamb, Charles, et al. Essentials of Marketing. Cengage Learning, 2012.

Lee, Suk, and Yun Ma. Never Give Up: Jack Ma in His Own Words. Agate/B2, 2016.

Peng, Mike. Global Business. Cengage Learning, 2016.

Yu, Tony, and Ho-Don Yan. Handbook of East Asian Entrepreneurship. Routledge, 2014.

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StudyCorgi. (2020, December 13). Alibaba Group's Progress and Influences on Industry. Retrieved from https://studycorgi.com/alibaba-groups-progress-and-influences-on-industry/

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"Alibaba Group's Progress and Influences on Industry." StudyCorgi, 13 Dec. 2020, studycorgi.com/alibaba-groups-progress-and-influences-on-industry/.

1. StudyCorgi. "Alibaba Group's Progress and Influences on Industry." December 13, 2020. https://studycorgi.com/alibaba-groups-progress-and-influences-on-industry/.


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StudyCorgi. "Alibaba Group's Progress and Influences on Industry." December 13, 2020. https://studycorgi.com/alibaba-groups-progress-and-influences-on-industry/.

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StudyCorgi. 2020. "Alibaba Group's Progress and Influences on Industry." December 13, 2020. https://studycorgi.com/alibaba-groups-progress-and-influences-on-industry/.

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StudyCorgi. (2020) 'Alibaba Group's Progress and Influences on Industry'. 13 December.

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