Alibaba: Competing in China and Beyond Essay

1. IntroductionIn this paper, we will talk more or less the most successful and famous e-commerce confederacy in chinaw argon Alibaba theme intimately its opposition strategies and its future moving. Alibaba stem was founded by Ma Yun (Jack) and the new(prenominal) 17 people in 1999 in Hangzhou. Jack wants to realise the meshing become a universal, safe and reli adequate tool that would benefit the public. Alibaba Group directly is holding by private, it has more than 70 offices in great China, Singapore, India, the United Kingdom and the United States, with more than 20,400 employees.2. accounting and Development of AlibabaIn 1999, Alibaba was form ally established in Hangzhou and it financed from Softbank, Goldman Sachs, Fidelity Investments and other U.S. investment agencies for about 25 million dollars. Three years later, Alibabas B2B become profitable. In 2003, Chinas first personal e-commerce range Taobao was established by Alibaba, in the same conviction, it als o published the online payment system-Alipay to support their B2B and C2C business. In 2005, Alibaba established a strategic partnership with Yahoo USA meanwhile, it was in charge of Yahoo China. In 2007, Alibaba founded the business management softw are high society Ali Software, and Alibaba.com Limited initial public offering inHong Kong Stock Ex deviate. In 2009, Alibaba Cloud reckon established, later in 2010, Taobao Mall started an indep terminusent domain name Tmall.com and it became Alibabas B2C service website which is focus on quality goods sales. In 2012, Alibaba Group has finish the initial manage buyback and restructure the relationship with Yahoo, while, Alibaba.com Limited officially delisted from the Hong Kong Stock Exchange.Chart 2.1 Overview of Alibaba Group3. Alibabas contestation advantages3.1 Biggest trade share of E-commerce in ChinaWe faecal matter see from the charts, till the end of 2013, Alibaba has own the biggest merchandise share in B2B, B2C, C 2C and online-payment service. It has already became the top one e-commerce troupe in China.Chart 3.1.1 China B2B Market in 2013Chart 3.1.2 China B2C Market in 2013Source http//www.chinainternetwatch.com/Chart 3.1.3 China C2C Market deal outChart 3.1.4 China Online Payment Market ShareSource www.NBweekly.com & http//www.chinainternetwatch.com/3.2 The heroicst B2B, B2C and C2C websiteAlibaba is the conceptions largest provider of online trading, and the worlds largest business forum. To December 31, 2012, the political program had around 500 million registe ruby users and more than 2.8 million supplier storefronts, andits websites are available in English, Simplified Chinese, Korean and other languages. It provides professional function for the world(a) business.3.3 The visibility is very strongDepends on its Propaganda efforts, almost all over the world have their ads at a time.3.4 Better functionAlibabas site speed, reasonable softwares, and good service attracted entrepreneu rs of all ages around the world.3.5. OthersAlso Alibaba had a high reputation in the Asia Pacific region and it always prolong innovation, for example, in 2013 it officially published its online chat App called LaiWang.4. The Movement of IPO (Initial macrocosm Offering)4.1 BackgroundOn March, 2014, Alibaba Group Holding Ltd. announced the confederacy will do IPO in New York Stock Exchange the estimated time will be in quarter three of 2014. The IPO racing shell is considered to be between $150200 billion (USD) (Chen, 2014). If the plan is very executed, it will be one of the biggest IPO scales in the history. To do IPO, from the plain perspective, it is for arranging the global market. However, it has been 15 years since Alibaba was founded in 1999, why the come with decided to do IPO now? What is the reason behind and stumble this movement? It is worth to look into the meanings behind and analyze the reasons. There are two major reasons behind this huge action. One is keepi ng the pick up in force(p) inside the partnership the other is competing with the main and biggest competitor Tencent in China.4.2 Maintaining the control indemnifyThe first reason is to maintain the control effective inside the partnership. For the founder of Alibaba, the core idea of managing the firm is to keep the company culture and the innovation power. Based on this idea, he developed the picky partnership structure for the firm. The special partnership structure is meaning chief operating officer necessitate to be chosen from Alibabas partners. And, tobecome the partner, the staff inevitably to be the core manager in the department and work in Alibaba group at to the lowest degree five years. The meeting of choosing partners will hunting expedition one time per year, the nominee needs to get at least 75% votes from the existing partners, then he/she kitty become the partner. forthwith the boards of directors are formed by 2 places of Alibaba, 1 seat of Softback an d 2 seats of Yahoo. It is dangerous for the founder and managers that they can be replaced or take away the control right suddenly. The shareholding structure of Alibaba now is around Yahoo has 23%, Softbank has 31.9%, the founder has 7.4% and managers/other shareholders have 37.7%.harmonize to the agreement between Yahooand Alibaba in 2012, if Alibaba can do IPO before in the end of 2015, then Alibaba can repurchase the half of holding shares which Yahoo takes now, also Yahoo will give up one seat in board of directors. Therefore, doing IPO is not secure a simple global strategy, more with the implicit intention behind.4.3 emerging controversyThe second reason is to compete with Tencent in China. Alibaba is the biggest B2B and B2C e-commerce company in China it has leading position for past years. However, the situation has changed in young 34 years, more and more users access the internet including buy goods and services via cell phones. It is the benefit access for the comp etitor Tencent to grab the market from Alibaba. Especially, Tencent just bought a large stake of JD.com (Gittleson, 2014). JD.com is the second biggest e-commerce site in China and in B2C market it is also the second place right behind Alibaba.The competition intention with Alibaba is obvious. The recent competitions between two parties can refer the below Table 4.3.1. Both companies also start to make acquisitions in small areas and ready for a head-to-head competition (Gittleson, 2014). Tencent doesnt need to worry about the money since the company did IPO right early in 2004 in Hong Kong Stock Exchange the stock expenditure is HK$578 on 18th, March, 2014 which is 156 times more compared to 10 years ago (Yu, 2014). Hence, Alibaba needs to find the moneysupport and start this one of the most dearly-won competitions in online history. said by Kim Gittleson from BBC news.Main businessE-commerce platforms in B2B,B2C and C2C markets.(Taobao, TMall, Alipay) arcsecond message platform. (QQ, WeChat)Recent Competitions1. During Chinese New Year, Tencent launched a mobile payment service that users can send or receive the money of red packet on line it gave a warning to Alibabas Alipay (Gittleson, 2014).2. The competition in mobile app for calling taxis (Alibabas Kuaidi v.s. Tencents Didi). The app not that can call cabs but also can tip for the ride. It is estimated that two parties pay more than $3 billion to subsidize it (Tong, 2014). 3. In the end of 2013, Alibaba launched one messaging application called LaiWang and tried to compete with Tencents WeChat5. conclusionAs we can find out from the previous chapters, Alibaba is a market leader and dominance Chinese e-commerce markets over ten years. Due to its large market share, innovation power and strong website function, no one is able to challenge its leading positions. However, in recent years, internet users start to change their using ways via the booming mobile phones. It benefits another giant company Ten cent to penetrate Alibabas existing markets.Even though Alibaba has the first-mover advantages in the market, the competition from Tencent doesnt stop even getting aggressive. From the IPO movement of Alibaba, it can see Alibaba take this competition serious and doesnt want to lose. both giants battle for the leading place. The tough and expensive competition with Tencent just started. But, now Alibaba not only need to concern about the domestic competition but also need to make careful actions in global markets due to the IPO. The future of Alibaba is becoming more uncertain since the global markets are adding into the plan and the sever competition keeps going on.6. References1. Bidwai, S.V. (2010) Case Analysis Alibaba Competing in China and Beyond. 2. Chen, Copper (2014) Super IPO, whats the meaning for Alibaba (translated). Business Next. Retrieved from http//www.bnext.com.tw/ condition/view/id/31942. 3. China Internet Watch 2013. For Charts 3.1.1, 3.1.2 & 3.1.4. Retrieved fro m http//www.chinainternetwatch.com/.4. Gittleson, Kim (2014) Tencent and Alibaba Battle for Internet potentiality in China. BBC News. Retrieved fromhttp//www.bbc.com/news/business-26540666.5. Southern Weekly. For Charts 3.1.3. Retrieved from http//www.NBweekly.com. 6. Tong, Frank (2014) Alibabas Founder dialogue about Its IPO and Competition. Internet Retailer. Retrieved fromhttp//www.internetretailer.com/2014/03/18/alibabas-founder-talks-about-its-ipo-a nd-competition.7. Walraven, Piet (2009) A Brief History (and Future) of Alibaba.com. TechNode. Retrieved fromhttp//technode.com/2009/01/22/a-brief-history-and-future-of-alibabacom/. 8. Wang, Guo-An & Lim, Yong-Taek (n.g) Research in Chinas Alibabas Development.9. Yu, Sophie (2014) A Tale of Two Internet Leaders Tencent vs Alibaba. China Business. Retrieved fromhttp//www.scmp.com/business/china-business/ word/1452041/tale-two-internet-l eaders-tencent-vs-alibaba.