Alibaba Group: House of E-Commerce Companies

Alibaba is a multinational e-commerce company based in China that has become one of the largest and most successful online retailers in the world. Founded in 1999 by Jack Ma, Alibaba began as a platform for connecting Chinese manufacturers with international buyers, but it has since grown to encompass a wide range of consumer and business services, including online shopping, cloud computing, digital payments, and more. With a market capitalization of over $500 billion, Alibaba is not only a dominant force in China’s tech industry but also a major player in the global e-commerce landscape. In this article, we will explore the history, business model, and impact of Alibaba Group on the world of online retail.

Short History

Technically, Alibaba was founded in December 1999 by Jack Ma, a former high school teacher who led a group of 18 technology pioneers whose original goal was to harness the potential of the online wholesale market.

Jack Ma later launched Alibaba’s main business, Alibaba.com, while working as an English teacher in Hangzhou. Alibaba.com has three main services: the English-language portal Alibaba.com, which handles sales between importers and exporters from over 240 countries and regions, the Chinese portal 1688.com, which manages domestic B2B trade in China, and the transactional retail site AliExpress.com, which allows small buyers to purchase small quantities of goods at wholesale prices.

Alibaba has received a US$25 million investment from Goldman Sachs and SoftBank. Alibaba.com was supposed to improve the domestic e-commerce market and become an ideal e-commerce platform for Chinese enterprises, especially small and medium-sized enterprises (SMEs), help export Chinese products to the global market, and solve the problems of the World Trade Organization (WTO).

Products and Services

Alibaba Group offers a lot of products and services, below we will explore their history and short details.

1. Taobao Marketplace

Taobao means “treasure hunt” in Chinese. Taobao Marketplace is positioned as the starting point and destination portal for shopping. Consumers on Taobao Marketplace have access to personalized shopping recommendations optimized by big data analytics. Through relevant and interesting content and real-time updates from sellers, consumers can learn about products and new trends. They can also interact with each other and with their favorite sellers and brands. With a wide range of interactive features such as live streaming, groups, and short videos, Taobao Marketplace has become an established social commerce platform.

Taobao Marketplace provides a top-level traffic funnel that directs users to various marketplaces, channels, and features within the Taobao ecosystem. For example, search results on Taobao Marketplace show listings of not only Taobao Marketplace merchants but also Tmall merchants, which generate traffic for Tmall. The Taobao market reaches a vast consumer base, including consumers from major cities and beyond. The vast majority of users access Taobao Marketplace through mobile devices.

Taobao Marketplace is also the entry point to vertical marketplaces such as used item auctions and online travel bookings, which can also be accessed through their own independent mobile apps.

Merchants on Taobao Marketplace are primarily individuals and small businesses. Merchants can create showcases and product listings on Taobao Marketplace for free. The escrow services provided by Alipay are free of charge to consumers and merchants unless the payment is financed with a credit product such as a credit card, in which case Alipay will charge the merchant a fee based on the applicable bank charges charged by Alipay. Taobao Marketplace merchants can purchase P4Pand display marketing services to drive traffic to your storefronts. In addition, merchants may receive additional traffic from third-party marketing partners. Taobao Marketplace merchants can also pay for advanced storefront software to help update, decorate, and manage their online storefronts.

2. Rural Taobao

As of 31 December 2017, 576 million people in China lived in rural areas, according to China’s National Bureau of Statistics. Geographical and infrastructural constraints severely limit consumption and trade in rural areas, as the cost of distribution in geographically dispersed and remote locations is prohibitively high. The company aims to increase consumption and trade in China’s rural areas through the “Rural Taobao” program, which has set up service centers in more than 26,000 villages as of 31 March 2018, to provide rural residents with greater access to goods and services and the opportunity to sell what they produce for urban consumers.

Villagers can place orders at service stations, and goods such as consumer goods can be Electronic appliances and agricultural products ordered online are delivered to county-level service centers and then delivered by local couriers to service stations in villages for pickup.

Rural Taobao is also helping Chinese villagers establish their own production by enabling villagers and businesses to sell high-quality agricultural products to urban consumers. The Rural Taobao program is building a two-way distribution infrastructure that links trade between cities and rural areas in China.

Rural Taobao is also helping Chinese villagers establish their own production by enabling villagers and businesses to sell high-quality agricultural products to urban consumers. The Rural Taobao program is building a two-way distribution infrastructure that links trade between cities and rural areas in China. Rural Taobao is also helping Chinese villagers establish their own production by enabling villagers and businesses to sell high-quality agricultural products to urban consumers. The Rural Taobao program is building a two-way distribution infrastructure that links trade between cities and rural areas in China.

3. Tmall

Tmall caters to consumers looking for branded products and a premium shopping experience. A large number of international and Chinese brands and retailers have opened their stores on Tmall. According to iResearch, Tmall is the largest B2C platform in China in terms of GMV in 2016. It is positioned as a trusted platform for consumers to purchase both domestic and international products, as well as products not available in traditional retail outlets.

In 2009, Tmall first held November 11, known as “Singles Day” in China, as an annual promotional shopping day. Singles Day became the most important shopping event in China, and provided the company with the highest single-day retail sales volume in the world: on Nov. $17.5), within 24 hours via Alipay.

Tmall is a brand partner. Brands and retailers operate their own stores on the Tmall platform with unique branding and looks, accompanied by full control over their own branding and merchandising. Merchants on Tmall and Taobao Marketplace can customize their storefronts right down to the programming code without too many restrictions. As of March 31, 2017, there were over 100,000 brands on Tmall. Due to the presence of a large number of global brands and strict requirements for merchants to work on Tmall, being on Tmall has become a proof of quality, allowing merchants to take advantage of our significant traffic to grow and increase brand awareness and attract customers.

Major international brands that have physical operations in China such as Apple, Zara, Bose, Estee Lauder, P&G, and Unilever are well represented on Tmall. And Tmall Global, an extension of Tmall, is addressing the growing demand from Chinese consumers for international products and brands that do not have a presence in China.

Brands and retailers look to Tmall not only for its large user base, but also for its services and tools to attract, retain and engage customers, and improve the efficiency of their operations. For example, Tmall provides one-stop branding and promotion services through various properties such as Juhuasuan. Juhuasuan is a flash trading and marketing platform where Tmall and Taobao Marketplace sellers can attract new customers and increase brand awareness through special discounts and promotions.

4. Tmall Global

Through Tmall Global, an extension of Tmall, Alibaba Group Holding Ltd. satisfies the growing demand of Chinese consumers for international products and brands. Tmall Global is the premier platform for overseas brands and retailers to sell their products to Chinese consumers and build brand awareness and gain valuable consumer insights in shaping their overall China strategy, without the need for physical operations in China. For example, Costco, Macy’s, Chemist Warehouse, Victoria’s Secret, LG Household & Health Care, and Matsumoto Kiyoshi have storefronts at Tmall Global.

Tmall Global is committed to customer feedback to position Tmall as the premier place to shop for everyday goods, emphasizing value and convenience. For example, through Tmall Global, consumers are offered frequently purchased products such as FMCG in high-density top-tier cities, where consumers can receive same-day delivery and next-day delivery coordinated through Cainiao Network’s warehouse and partners. In Consumer Electronics, Singles Day is held to reinforce consumer acceptance of Tmall’s value proposition through exclusive promotions on high-value items such as mobile phones, as well as high-quality delivery, installation, and after-sales services for home appliances such as TVs, kitchen appliances, refrigerators, and washing machines. ,

5. 1688. Com

1688.com is an online wholesale marketplace that brings together buyers and sellers in China who trade in general merchandise, apparel, electronics, raw materials, industrial components, and agricultural and chemical products, among others. A significant number of retail sellers in China list their products on 1688. com. Listing items on 1688.com is free. Merchants can purchase a China TrustPass membership for an annual subscription fee to host premium storefronts with access to data analytics applications and updated storefront management tools. Paid members may also pay for additional services such as premium data analytics and online marketing services.

6. AliExpress

AliExpress is a global marketplace targeted at consumers from all over the world who buy products directly from manufacturers and distributors in China. In addition to the global English site, AliExpress operates sixteen Eurasian language sites, including Russian, Spanish, and French. Consumers can access the market through its websites or the AliExpress app. The main consumer markets in which AliExpress is popular are Russia, the United States, Brazil, Spain, France, and the United Kingdom. In the twelve months ending March 31, 2017, AliExpress accounted for approximately 60 million annual active buyers and had a GMV of $10.1 billion. Merchants on AliExpress pay a fee, which usually ranges from 5% to 8% of the transaction amount. The company generates income on AliExpress from sellers, who participate in a third-party marketing affiliate program, and from those who purchase P4P marketing services.

7. Lazada

In April 2016, Alibaba Group Holding Ltd. acquired a majority stake in Lazada, a leading e-commerce platform operator in Southeast Asia. Lazada operates e-commerce platforms in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam with local language websites and mobile apps in each of the six markets. Lazada offers third-party brands and merchants a marketplace solution with easy and direct access to consumers in these six countries through one retail channel and fast, reliable delivery. Lazada also sells products owned by its retailers.

8. Alibaba.com

Alibaba.com is the leading wholesale marketplace for international trade. Sellers on Alibaba.com can pay for an annual Gold Supplier membership to list their products in the premium store. Merchants can also purchase an upgrade membership package for additional services such as upgraded storefront management tools and P4P marketing services. The buyers are usually sales agents, wholesalers, retailers, manufacturers, and SMEs (Small and Medium Enterprises) engaged in import and export. Alibaba.com also offers import-export supply chain services to its members and other SMEs, including customs clearance, VAT refunds, trade finance, and logistics services.

9. Alibaba Cloud (Cloud Computing)

Alibaba Cloud was created in 2009 to make these cloud computing technologies available to third-party customers. Alibaba Cloud is China’s largest public cloud service provider in 2016 by revenue, according to IDC. The technologies used in the Alibaba Cloud grew out of Alibaba’s own need to manage the scale and complexity of its core commercial business.

Alibaba Cloud offers a full suite of cloud services, including agile computing, databases, storage and delivery networks (CDNs), large-scale computing, security, management and application services, big data analytics, and a machine learning platform. Alibaba Cloud products are proprietary security and middleware products, large-scale computing services, and analytics capabilities provided by the big data platform. These products enable customers to quickly build their IT infrastructure in real time without having to work on-site.

Alibaba Cloud provides cloud computing services for all kinds of enterprises, including merchants doing business in the Chinese market, start-ups, corporations, and government organizations. The company charges a commission mainly for the time of use and software. As of March 31, 2017, the number of Alibaba Cloud customers was about 874,000. Customers including China Railways and Weibo enjoy flexible computing services, security capabilities, and artificial intelligence for data storage, transmission, and analysis. Customers such as Sinopec and CITIC Group also use intermediate services to upgrade their application infrastructure. Media and entertainment platforms, including China Central Television and Mango TV, use live and on-demand video delivery networks. China Post and Ele.me use big data solutions to improve efficiency.

In 2016, Alibaba Cloud entered Japan, Korea, Germany, the Middle East, and Australia with its cloud computing to provide customers worldwide with greater access to a variety of offerings, including flexible computing, data storage and analysis, and security services in the cloud.

10. Youku Tudou

Youku Tudou, a leading multi-screen entertainment and media company in China, allows users to quickly and easily search, view and share high-quality video content across multiple devices. The Youku Tudou brand is one of the most recognizable online video brands in China.

Youku Tudou makes money mainly from brand advertising. Its online advertising services include video, display, sponsorship, and other forms of advertising. During video playback, at a certain time, a video ad pops up. These video ads can be pre-roll, post-roll, mid-roll, or static ads. Advertisements may appear alongside the video and may be in the form of graphic banners or text hyperlinks. Other forms of advertising include placing products on self-produced web series, sponsored live streams, or viral self-produced videos.

11. UC Browser

According to StatCounter, UC Browser is one of the top three mobile browsers in the world and ranked first in India and Indonesia in terms of pageview market share in 2017. UCWeb raises funds through a keyword bidding system that allows marketers to reach out to users who are looking for information related to their products or services.

Third-party distributors are engaged to sell certain mobile advertising services to marketers. UC Browser monetizes primarily through banner ads, in which advertisers place icons with links to their web pages or applications in UC Browser. The UC Headlines newsfeed feature allows marketers to place ads in newsfeeds on a cost-per-click ( CPC ) basis.) or time-based impressions. The Mobile Marketing Platform allows marketers to run targeted ads for apps, games, web pages, and services on mobile media including UC Browser, UC Headlines, and third-party media partners.

12. Shenma

Shenma, UCWeb’s mobile search engine, was the second-largest mobile search engine in China in 2017, according to StatCounter.

13. YunOS

YunOS is a cloud-based, data-centric, and service-oriented operating system for all kinds of smart devices. It is a scalable and interoperable system that can be used on a wide variety of IoT devices, including cars, mobile phones, TVs, and set-top boxes. With advanced technology and sophisticated features such as system-level H5/Web service, dynamic linking service, unified data platform, and layered security infrastructure, YunOS enables developers to provide enhanced script-based Internet services and user experience for customers. YunOS provides connectivity between cloud applications and hardware devices with a focus on user data needs.

14. Auto Navi

AutoNavi is a leading provider of digital maps, real-time navigation, and traffic information in China. In addition to providing these services directly to end users, AutoNavi also operates a leading open platform in China that, through its location-based services, powers many major mobile applications in various industries such as food delivery, passenger service, taxis, and social media. It also provides fundamental services to major platforms in our ecosystem, including our retail marketplaces in China, Cainiao Network, and Alipay.

15. DingTalk

DingTalk is a proprietary (own) enterprise platform of Alibaba Group Holding Ltd. for communication and collaboration that enables text, photo, voice, and video communications, workflow management, and collaboration between team members and businesses of various sizes. It also offers affordable and secure Internet telephony services. With the built-in corporate directory, users can easily initiate text chats or voice and video conferences, as well as secure group chats with members of their organization. DingTalk brings together the critical tasks of communication and collaboration in the workplace. For example, DingTalk allows businesses to conveniently record workplace attendance and external meetings.

16. Uni Marketing for Brands

Alibaba developed the Uni Identity system to track users across different properties and devices. For example, it is possible to identify a user who watches a Youku Tudou video on a PC and the same user who makes purchases on the Taobao app. The Uni Identity system accepts disparate data and attributes data to a single user, allowing Alibaba marketers to gain valuable insights into user behavior and preferences. Uni Identity enables brands to connect with consumers in the right place, at the right time, and with the right content.

Thanks to Uni Identity and the power of Big Data, the Uni Marketing Method has been developed to enable brands to build strong relationships with consumers throughout their entire life cycle in a company’s ecosystem. Uni Marketing tracks the relationship between the brand and the consumer at every critical stage – from awareness to engagement, purchase, and loyalty. Consumer data is generated, aggregated, analyzed, and reactivated in individual brand databases. This data helps brands and marketing agencies navigate through every phase of the brand-consumer relationship, providing insights into strategy, communications planning, and ad delivery. Uni Marketing’s data-driven method effectively and efficiently promotes brand growth, increased sales, and customer loyalty.

Uni Marketing identifies consumer brand touchpoints through online media, including marketplaces, Youku Tudou, UC Web, strategic partners in the Alibaba ecosystem such as Weibo, and other major third-party online resources in China. Uni Marketing aims to be a key brand-building destination by creating an open, inclusive, and transparent platform where brands and marketing agencies can design, execute, track, and optimize their brand-building activities using the collected data and tools.

17. Alimama

Alimama is Alibaba’s technology platform that provides merchants and brands with the service to place various promotions on Alibaba’s marketplaces and other third-party properties. The platform supports P4P marketing based on keyword search rankings or display ads in fixed positions offered through auctions, as well as cost-per-thousand impressions (CPM) based on temporary promotions or individual fixed-cost campaigns through displaying photos, graphs, and video.

The ranking of P4P search results on major commercial platforms is based on proprietary algorithms that take into account keyword bid price, product or seller popularity, seller rating, and customer feedback on product quality. To display ads, the Alimama platform monitors (tracks) marketing messages based on data from the Alibaba ecosystem, including transactions on major commercial platforms, payment data from Ant Financial Services, logistics data from Cainiao Network, navigation and behavioral data of users of major commercial platforms and media and entertainment objects, as well as demographic and geographic data.

Relevance and completeness of data based on commercial activities and user activities in the Alibaba ecosystem allows Alimama to send the most relevant information to the most relevant users.

Under the Alimama bidding system, marketers can charge a higher or lower price for mobile marketing than for desktop marketing. Alimama also has an affiliate marketing program, which allows advertising on third-party websites and mobile applications, which allows marketers, if they so desire, to expand their marketing opportunities for users of Alibaba services and users of other platforms. The affiliate marketing program not only generates additional traffic for Alibaba’s main commercial platforms but also generates revenue. Under the Taobaoke program, merchants on Taobao Marketplace and Tmall can generate additional traffic and transactions from third-party websites and mobile apps, and marketers pay commissions based on a percentage of the transaction value received from these third-party marketing partners. A portion of this commission is paid by third-party affiliate marketing partners.

Alimama operates TANX (Taobao Ad Network and Exchange), one of the largest online marketing exchanges in China, which conducts real-time trading. TANX helps producers monetize their media assets both on web pages and mobile apps. TANX automates the process of buying and selling billions of ad impressions per day. TANX members are manufacturers, marketers, and agency-driven platforms.

18. Amap

Amap is the largest provider of mobile digital maps, navigation, and real-time traffic information in China. Amap provides these services directly to end users and operates a leading open platform in China that powers many major mobile applications across industries such as food delivery, travel service, taxi-hailing, and social media through big data-enabled digital mapping technology. In addition, Amap provides digital mapping data, navigation software, and real-time traffic information to international and local automakers and aftermarket firms in China.

19. Tmall Genie

Tmall Genie is a smart speaker using AliGenie’s intelligent personal assistant service. Like other smart speakers, Genie supports web browsing, music streaming, home automation devices, and ordering Tmall products. Tmall Genie has focused on entertaining and educational content for families to expand its user base and encourage them to interact with their devices. Tmall Genie is a bridge between Alibaba and its customers to embrace new services and experiences that will be created by IoT and smart home appliances. As of March 31, 2019, over 10 million units of Tmall Genie have been activated since its official launch in August 2017.

20. News feed UC Headlines

UC Headlines is a user-driven newsfeed platform that aims to provide users with targeted news and media content such as blogs and community media, and provide targeted online marketing services to advertisers. In March 2017, UC headlines counted over 200 million mobile MAUs (Monthly Active Users), including overseas users.

21. Alibaba Pictures – Movies

Alibaba Pictures, founded on an equity basis, is mainly engaged in the operation of an integrated Internet platform that promotes and distributes entertainment content, serving consumers, studios, and theater operators. Alibaba Pictures uses various mobile app distribution platforms to enable users to download and install Android and YunOS mobile apps, providing data-driven recommendation services and mobile app traffic. Alibaba Pictures operates the second-largest online movie ticketing platform in terms of mobile MAUs in 2017.

22. Cainiao Logistics Network

Cainiao Network is a joint venture established in May 2013 with other shareholders involved in logistics, retail and real estate, including four major courier companies in China. Cainiao Network does not deliver itself. It operates a logistics data platform that uses the power and capabilities of logistics partners to complete transactions between merchants and consumers on a large scale. Cainiao Network uses data and technology to improve the efficiency of the entire supply chain. The data platform provides real-time data access for merchants to better manage their inventory and warehouse space, and for consumers to track their orders. Besides,

Cainiao Network provides two main types of services – data and technology transmission solutions and customer satisfaction solutions in China.

Delivery data and technology solutions are value-added services that connect merchants with logistics providers and consumers, provide real-time order tracking information, and improve logistics efficiency. Merchants choose the services of specific logistics service providers who rely on Cainiao Network’s own data platform to ensure the accuracy of shipping information and optimize shipping routes. Under the shipping data and technology solutions model, merchants take responsibility for fulfilling orders from their warehouses (usually one centralized location per merchant) and pay for express courier services to receive, transport, and sort packages and deliver the “last mile” to the end consumers across the country. This model does not require Cainiao Network to invest in capital-intensive warehouses, vehicles, or last-mile assets. At present, the vast majority of packages from our Chinese retail markets are sold and shipped under this model. Using a platform approach, Cainiao Network brings together the resources of logistics service providers to build a logistics ecosystem. Cainiao chains have hired more than 1,800,000 employees in more than 600 cities and 31 provinces in China, according to the data they provided. Together they operated over 180,000 junctions and marshaling yards. The Cainiao network is still in its early stages of development. It has yet to monetize most of the value-added services provided under the supply data and technology solutions model.

23. Financial Services – Ant Financial Services

Ant Financial Services provides digital payment services, value-added services for consumers and small and medium-sized enterprises (SMEs), and other financial services in China and around the world, such as payments, asset management, lending, and insurance. Ant Financial Services leverages its clients’ knowledge and technology to help financial institutions, ISVs and other partners on its platform improve their user experience and improve their risk management capabilities. In 2017, Ant Financial Services, along with Paytm and Ascend Money, served over 630 million active users worldwide.

Alipay, a wholly owned subsidiary of Ant Financial Services, provides payment and escrow services for transactions on Taobao Marketplace, Tmall, 1688.com, AliExpress, and some other platforms. Alipay is the primary means by which consumers pay for their purchases in our retail marketplaces in China. Except for transactions made using credit products such as credit cards, where Alipay charges the seller money. Alipay does not charge any fees from merchants doing business on Alibaba platforms.

Ant Financial Services and its partners also provide asset management, lending, insurance, and other services for merchants and consumers in the Alibaba ecosystem, such as working capital loans for SMEs, consumer loans, and logistics cost insurance for returned goods.

24. Koubei – Provision of Services in China

In 2015, Alibaba established the Koubei Joint Venture with Ant Financial Services, one of the leading local service providers in China. Koubei operates O2O services jointly with Alipay, attracting visitors to local establishments such as restaurants, supermarkets, fast food stores, and other offline establishments, offering consumers a “closed loop” experience, from getting information about mobile phones to finding a store and getting discounts on payment.

25. Ele.Me – Food Delivery

In March 2016, Alibaba partnered with Ant Financial Services to invest in Ele.me, a leading food delivery company in China. Consumers using the food delivery company’s app can order food, snacks, and drinks on a mobile device. According to the cooperation agreement, Ele.me fulfills food orders received from the Taobao and Alipay apps.

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