Overview of the e-marketplace of Alibaba from the perspective of 5W1H

Overview of the e-marketplace of Alibaba from the perspective of 5W1H

Who is the owner of Alibaba? Where are Alibaba located at?

Alibaba was founded by Chung Tsai and Yun Ma (Jack Ma) on June 28, 1999 by 18 people led by Jack Ma, headquartered in Hangzhou, China. At the beginning, founders started to champion small businesses, power the innovation and technology to grow and compete in the domestic and global economies. Alibaba has grown into a global leader in online and mobile commerce since launching its first website helping small Chinese exporters, manufacturers and entrepreneurs to sell internationally. Today, the company and its related companies leading in wholesale and retail e- marketplaces (Alibaba Group, 1999)

          YUN MA (JACK MA) Executive Chairman                                            CHUNG TSAI Executive Vice Chairman

  

Why it is called “Alibaba”?

The name came to Ma when he was sitting in a coffee shop in San Francisco. However, if it hadn’t been for a certain waitress, the now-famous “Alibaba” brand name may have fallen by the wayside. According to Ma: “And then a waitress came, and I said do you know about Alibaba? And she said yes. I said what do you know about Alibaba, and she said ‘Open Sesame.’ And I said yes, this is the name! Then I went onto the street and found 30 people and asked them, ‘Do you know Alilbaba’? People from India, people from Germany, people from Tokyo and China… They all knew about Alibaba. Alibaba — open sesame. Alibaba — 40 thieves. Alibaba is not a thief. Alibaba is a kind, smart business person, and he helped the village. So…easy to spell, and globally known. Alibaba opens sesame for small- to medium-sized companies.” Ma also registered “Alimama”, just in case, “someone [wanted] to marry us!” (Greving, 2015)

What kind of business is?

     Alibaba is a Chinese e-commerce company operating e-marketplaces for both international and domestic China trade (Alibaba.com overview, n.d.). Services is being provided such as consumer-to-consumer, business-to-consumer and business-to-business sales services. For example, Alibaba provides business-to-business trading platform which involving manufacturers from countries such as China, India, Pakistan, the United States, and Thailand with international buyers. AliExpress was developed by Alibaba Group in 2010 as a business-to-consumer platform for Chinese companies to sell to foreign consumers.

      Alibaba is a wholesaler market. Alibaba.com, the leading platform for global wholesale trade, and Bigcommerce have made it possible for you to quickly and easily source unique products from the largest manufacturing hub in the world. We have brought together verified suppliers and low cost products just for Bigcommerce clients to reduce the complexity of sourcing products from China and to increase your confidence in cross-border trading.

      Alibaba categorize the products sell into several categories such as agriculture or food and beverage, apparel or textiles or accessories, bags or shoes and accessories, electrical equipment or components or telecoms. The products feature are categorize into material, colour, usage feature, and use. However, Alibaba top sells are electronic components and supplies.

Mission of Alibaba is do the business easy anywhere. All of the products sell are brand new, advance and good quality electronics devices. Alibaba will not sell the products that do not reach the standard of safety. There is a quality control team who tests all the products carefully. After testing the products, the packing team will responsible to make sure that the right accessories are included. Hence, the quality of their product is guaranteed. Besides, we can buy the products at cheaper price when we purchase in bulk.

Alibaba’s vision is to build the future infrastructure of commerce. Alibaba provide the essential technology infrastructure to support merchants and other businesses that provide products, services to influence the power of the Internet to engage with their users and customers. Alibaba’s businesses included cloud computing, digital media, entertainment, and innovation.

How Alibaba provides services to the customers?

Alibaba not only focus on quality but also concern after sales services. After sales service is to find out whether the customer is satisfy with the products or not. After sales service is a crucial aspect of Alibaba and must not be ignored. After sales service plays an important role in customer satisfaction and customer retention. Therefore, it generates loyal customers. Customers start believing in the brand and get associated with the platform for a longer duration. This will raise the reputation of Alibaba.

After sales service plays a crucial role in strengthening the bond between Alibaba and the customers. The sales service department are concerning the customers’ problems. There is a website where customers can inquire about their problem online and the professional team will reply or solve their problems within 24 hours. Besides, all of the electronic devices we sell are offering 1 year warranty. Alibaba also provides delivery guarantee. We need to make sure that the product which customers buy is delivered on time and reach safely. If the delivered product is broken or lost, Alibaba need to take responsibility such as deliver the product again or refund to the buyer.

            Apart from that, Alibaba created Alipay that protects buyers a feel of secure when sellers unable or refuse to deliver the goods sold. Alibaba.com secure payment provide a safe payment service for all parties involved in international trade. By partnering with Alipay, Alibaba.com provides payment security to both buyers and suppliers. Alibaba is a safety online platform to provide consumers and sellers for the online trading (Alibaba.com secure payment, 1999). 

Registration as an unregistered business entity

Part B (i) – Registration as an unregistered business entity

Step 1: First and foremost, we have to visit the official website for Alibaba.com.

Step 2: Secondly, we click the button of "My Alibaba" and then "Join Free" to begin our registration. After clicking on the button it will redirect us to another webpage.

Step 3:

After we have done the previous step, it will redirect us to the following steps of webpage, and we will have to fill in our information step by step according to the webpage’s instructions.

Step 4:

 Fill in our respective email address in the column provided.

Step 5:

Approve the confirmation email that has been sent to your email address.

Step 6:

We will receive an email as shown below, and we will have to click on the link provided in the email, the link will redirect us to another webpage.

Step 7:

The link will redirect us to the webpage shown below and we have to fill in our information in order to be a member.

Step 8:

After we had finish entering our information, we will be redirect to another webpage, which will process our data in creating our membership account. 

Step 9:

Lastly, we had come to the end of the registration process as an unregistered business entity on Alibaba website, and ready to start exploring the website as a member to shop online.

Source out for the unique product of our choice. Request for the product catalogue from our supplier and discuss on the product pricing using the e-commerce platform provided.

Step 1: After finishing the registration process Alibaba official website will automatically log in your profile, it can be done manually by pressing the “Sign in” button and fill in the registered E-mail address and password.

Step 2:

After logging in our account, we will start to search for products that we are interested in which is a Bluetooth Speaker, so we search for Bluetooth Speaker in the searching column provided in the webpage, and we found out there were 1,190,081 types of speakers available in Alibaba.

Step 3:

After searching for that product, it shows us that there are various types of Bluetooth speakers with different suppliers. We had decided to choose the supplier which provides us the lowest price available. The product that we look into is the OEM LED light Bluetooth speaker with alarm clock system. It acts as a Bluetooth speaker and at the same time it can also be a table lamp, and an alarm clock; hence, making this product to be different and unique compared with others.

Step 4:

After we had decided to buy it from this supplier, we looked into the information page of the product. Firstly, we have to check for the previous customer’s feedback of the product and the customer service provided. After reading the product details and transaction assurance provided, we decided to contact the supplier of this product.

Step 5:

After that, we have to click on the “Contact Supplier” button to contact the supplier of this product that only has a private message between the supplier and us. We communicated with the supplier politely and the supplier treated us equally as well to reply our messages. 

We asked the supplier whether we could have a cheaper price if we purchase 50 pieces of their product. 

The supplier offered us a same product but without the alarm clock system to us where he can give us a cheaper price. However, when we ask could we have a cheaper price if we purchased 100 pieces of the product. The supplier told us that they could only get us the original price as they would only give discounts if we purchase 20,000 units from them as they would give extra discounts if they can buy parts for the product with the customers. We had also asked for the catalog for their company, and they politely asked us to refer to the website link given to us. The supplier also thanks us for being understanding for not giving any discount for that reason. 

Although this supplier had given us a price that is cheap and reasonable, we plan to search for other Bluetooth speakers with the exact figures but with a different design. We manage to find two suppliers that provide a similar product with the same figures but a different design.

We had selected the suppliers based on their number of year experience in conducting business in Alibaba, selling price per unit, and the respond rate of the respective suppliers. 

For the first alternative supplier (Yuyao Aggpo Electronic Technology Co. Ltd):

Since the previous supplier will only give discounts if we buy 2000 units, we would use this amount as a benchmark to ask for the cheapest price we can get if we purchase 2000 units for the respective suppliers.

The supplier is willing to provide us a price of USD8.8 for 2000 units instead of USD 12.00 for 2000 units of their product, and the supplier also provided us with the quotation/ catalog for their company products. The quotation from the company is stated as below:

Second alternative: Zhongshan Sunpe Technology Co. Ltd

For this supplier, they are willing to give us a price of USD 9.00 for 2000 units of their product, and the supplier also provided us with the quotation/ catalog for their company products. The quotation from the company is stated as below:

As a summary the quotation from different suppliers with the same product characteristics are as follow:

As a conclusion, we will choose to purchase from Yuyao Aggpo Electronic Technology Co. Ltd at a price of USD8.80 for 2000 units. We choose this supplier because this supplier can give us a cheaper price for 2000 units compared with other suppliers. 

Discuss with THREE (3) relevant examples how the company of your choice is using e-marketplaces to boost sales and marketing and find out the obstacle(s) faced in this course of action.

Example 1: Live chat system

Nowadays, business should achieve customer’s expectation by understand what they want and what they need. Most of the companies choose to use e-commerce to boost their sales and marketing. Alibaba has grown into global leader in online and mobile commerce company in terms of gross merchandise volume. Alibaba choose to use e-commerce to help their company to boost sales and marketing. Live chat can be say as important tools use in e-commerce. It can help the customer quickly get the information about the product.

Alibaba use live chat system to response quickly over the response, problem or compliant of the customer. By using live chat system, it can provide immediate response to the customer as compared with email. Customer can ask the service agent about the problem they faced when shopping in Alibaba. Service agent need to understand customer problem quickly and help them to solve the problem. The way of service agent to reply customer are important to satisfy the customer expectation. Live chat can help the customer to better understand the product and receive the answer immediately so that they can continue their online purchase by using Alibaba.

By having live chat on the site, the customer can solve queries immediately when they having problem when shopping in Alibaba. This can help Alibaba to boost sales and marketing because after the customer get the information and understand the details of the product they want to purchase, they will make purchase in the website. Live chat is the easy way for customer to ask question since most of the customer are available to chat through the day. It also can gain trust and confidence of the customer when the service agent answer their question immediately. Using live chat is faster and convenience as compared with email. Email need to take few days to reach customer while live chat not need. Live chat can response the customer immediately when the service agent be aware of their problem.

 Obstacles faced

In the way to boost sales and marketing by using live chat system, Alibaba may face some obstacles. The obstacles faced by Alibaba is unstable network connection. As Alibaba is the global leader in online and mobile commerce which means that network connection must be stable enough so that the customer can get the correct information about the website and also the product.  Network connection is very important for an e-commerce company because all the process of buying, selling, make payment or exchange information must be done by using network connection. The poor network connection will cause the consumer unable to receive the information provided by the service agent thus cause the consumer lose their confidence about Alibaba. The service agent also cannot receive any of the question that send by the customers.  This will causes the services agent failed to solve the problem and complaint that made by the customer. From this, customer might create dissatisfaction about Alibaba and thus change to deal with other company that may satisfied them. 

Example 2: Grow active buyer

Next, Alibaba can boost it sales and marketing by grow active buyer. Grow active buyer is important for Alibaba so that they can maintain the customer confident about Alibaba. Alibaba can grow active buyer by focus on global imports, rural expansion and Chinese centers of commerce. This three represents the strong opportunities to expand Alibaba’s user base. Active buyer of Alibaba increased by 18 % in year 2016 to 434 million help Alibaba to boost it sales.

Active buyer means that they will visit the website or make their purchase at least one time every month. Alibaba need to retain this active buyer since this is the way for Alibaba to increase the revenue. Alibaba conduct some activities such as in Single Day, also known as “11.11”. This is online shopping days, most of the retailer will offering discounts at least 50%. Alibaba offering higher discount compared with other seller. During this days, the product that sell buy Alibaba are cheaper than before. Active buyer will use this chance to get the products in the cheaper price and thus sales of the Alibaba will increase.

In year 2009, Alibaba encouraged merchant on Tmall. Tmall also an Alibaba platform that similar to Amazon. Alibaba encouraged Tmall to offer promotion on the Single Day as a way to boost sales between two holiday seasons in China – Golden Week and Lunar New Year. Alibaba also grow active buyer by giving promotion when Valentine’s Day and most other popular holidays in China, where the customer will focus on buying gifts or others. Active buyer will be aware of which products offer and share with their family or people surrounding them to make purchase. Action of Alibaba often encourage group purchase of the active buyer.

Obstacles faced

In the process of grow active buyer, Alibaba will face some obstacles certainty. The obstacles faced by Alibaba is lack of man power when grow active buyer. Alibaba need to hired many service agent to solve the problem and complaint of the active buyer to avoid giving opportunity for competitor to bring away Alibaba’s potential customer. This is because active buyer are too many so that the service agent unable to solve their problem as soon as possible. This might lose to their competitor as the competitor provide many service agent to solve their problem as compared with Alibaba. Customer who want dealing with them may be switch to other competitor as Alibaba cannot fulfill their requirement. When Alibaba conduct promotional activities, they need many man power as the active buyer will participate in this activities. In this case, Alibaba need to hire extra man power to solve problem of active buyer so that they will not switch to other competitor. Hire extra man power also can help Alibaba to boost sales and marketing as the man power can help the company improve the confident of active buyer to purchase more in Alibaba. This action is very important for Alibaba.

Example 3: Improve shipping system

Besides, Alibaba can boost sales and marketing by improve shipping system. Shipping system is very important process for a company because it will affect the reputation of the company if the product are delivery take longer time to reach. Customer will satisfied if they receive their purchased good in shorten time and this may encourage them to make purchase again by using Alibaba. This also can give the customer good impression about Alibaba in term of shipping system.

Shipping cost is the important factor for the customer to decide whether purchase good online because some of the website required higher shipping cost. Alibaba offer the shipping cost in the reasonable price in order to fulfill satisfaction of the customer. Customer will continue shopping in the site because Alibaba will help them to save a lot of shipping cost as compared with other online retail shop. This may encourage the customer to purchase more because Alibaba will offer lower shipping fee for those who purchase over the particular amount.  Customer will feel satisfied when they purchased good in the lower price. Although there is shipping fee but it is also cheaper than buy from other retail shop.

By improve shipping system, sales and marketing of the Alibaba can be increased. Because of it lower shipping cost, the customer will introduced Alibaba website for their family, friend or people surrounding them to make purchase. Alibaba can earn revenue in this side instead of offering high shipping cost for the customer. Customer will not make their purchase if the site offer high shipping cost because they will think unworthy. The price of the purchased good is almost same with the retail shop, they will choose to purchase in the retail shop because they still can see and try it.

Obstacles faced

In the process of boost sales and marketing, Alibaba will face some obstacles. The obstacles faced by Alibaba is they need to undertake the high shipping cost of the customer. Customer only need to pay the shipping cost in the reasonable price, while the other shipping cost required pay by Alibaba. The cost of shipping sometimes might be higher because some required fast shipping service by using aeroplane instead of ship. Alibaba also need to form better logistics department since the process of delivery is very important for a company. Mistake will be exist when the order are too many and they unable to send to the customer by time because of in rushing condition. Professional team is required by Alibaba because it can help Alibaba to deliver the purchased good in ordered condition that can avoid uncertainty. If the purchased good unable to send to customer by time, the customer will complaint and loss their confident about Alibaba. In this case, Alibaba need to ensure that there is no mistake done by the employees so that the impression and confident of the customer can be maintained. By this, sales and marketing of Alibaba will continue increased rather than drop. 

Awareness/participation of Liau & Cha Electronic Co. Ltd. in virtual worlds.

Liau & Cha Electronic Co. Ltd. is our company which sell all the electronic related product via physical store where located in United State. However, we found out that traditional brick and mortar operation no longer predominant in the market. In another words, it may lose competitive advantage to other competitors who are selling electronic products via both physical and online. Thus, we decided to expand our Bluetooth speaker with alarm clock which is electronic product to Alibaba in order to escalate our revenue.

            


Prior to expand a business to a virtual world, we aware that there are few existed competitors who are also selling a Bluetooth speaker with alarm clock in Alibaba such as Yuyao Aggpo Electronic Technology Co. Ltd and Zhongshan Sunpe Technology Co. Ltd. These two competitors have offer a different selling price but close to each other at the similar Bluetooth speaker with alarm clock. Thus, we used their average selling price as a benchmark to set for price of our speaker. Selling price of our speaker should not be exceed and approximately similar to the selling price of competitors.

           

While looking to the speaker, we noticed that the supplier will reveal their company profile and certification so that their customers are confident and trust to the speaker. Two of our competitors have given a strong secure and warranty to their speaker so that the product quality would able to be assure. The supplier would bear with full refund in case of bad quality of product has been detected. Eventually, they also provided the contact information to customers to make an inquiry to further assure the products’ information.

            

Apart from that, a product description have been designed by our competitors in order to convince the customers what their product is all about in term of picture, brand name, type, Bluetooth version, material, size, charging time and so on. The design on the overview of the product description is quite simple and obvious. However, all the required speaker’s information has displayed. Besides, they also provide a                                            delivery detail such as the date of product will arrived as delivery time is depend on how far a product delivers.

            

The reason of competitors wish to sell the Bluetooth speaker is due to they know that some people are searching for Bluetooth speaker but not finding many results. In order to secure their potential customers, they wish to increase the trade assurance so that customer’s consuming behavior can be influenced while they are searching for a speaker. Trade assurance included transaction level, supplier assessments, number of transaction has been made, response time and so on. Customers can easily grasp whether the particular product is frequently traded via review of trade assurance.

            

Furthermore, our competitors also offer some services like export processing support and after sales service in order to enhance customer’s loyalty. In export processing support, any inquiry will be replied by professional staff within 24 hours to assist customers in shipment, insurance and offering. In the after sales service, they attempt to seek for feedback of their customers and ready to work out a satisfactory solution along with customers.

            

Last but not least, our competitors also provide various type of payment option so that consumers can transfer money to them conveniently and proceed to delivery process. The payment options they applied are Visa, Master card, TT, Western Union, e-checking and so on. Visa and Master card payments is the most frequent method which buyers conduct payment through online and without going to bank to transfer money.

            

After we observe at our competitor within Alibaba, we determined to participate in this virtual world to expand our electronic business. As we previously have registered our company as both buyers and supplier perspective for Alibaba’s account, therefore, we commenced to build up our company reputation with company profile, certification and recognition. By providing a review of company’s information including contact details, it can convince to our customers that our company is legally existed.

            

After design a well company profile, we proceed to display our new product which is Bluetooth speaker in Alibaba website with product’s picture and details including delivery information. We set our Bluetooth speaker price at USD 12.00 with minimum 10 units and USD 9.00 with a 2000 units. Besides, we also sort and group our speaker into electronic category and computer hardware category so that our customers will able to search out our product without product’s name. In order to build up our trade assurance, we even response our customer quickly, increase and promote our transaction and eventually gradually developing our supplier assessment by our customers.

            

Lastly, after we also imitate after sales services that provided by our competitors. We try to seek the feedback from our customers’ satisfaction on product quality, delivery time, and payment method. It is essentially for us to enhance and improve our product and services. We attempt to meet all the customers’ need and want with a reasonable manner. Furthermore, we have also provided few payment methods to our customers to proceed payment to our product through Visa, Master card and Western Union.

            

Liau & Cha Electronic Co. Ltd. will started to launch our other electronic products soon via this virtual world platform in order to enhance the market.