Alibaba Cloud Computing • Developing scalable platforms for cloud computing and data management. JUHUASUAN • Most popular online group buying marketplace in China. AliExpress • Global consumer marketplace targeting consumers worldwide. Note : Source: Alibaba Group (n.d.-d). History and Milestones. Retrieved from MAIN STRATEGIC CHALLENGES Introducing Alibaba to new Regions Outside of China: On September 19, 2014, Alibaba had an IPO on the New York Stock Exchange. This is significant because it signals Alibaba’s commitment to growing their brand and business in the United States. However, this comes with many challenges as the United States has many powerful competitors in the E-commerce segment. If Alibaba is to be successful in the U.S market, they must find a way to be price competitive with Amazon and eBay. Alibaba is far behind these players in being recognizable, as recent polls showed that 88% of United States consumers did not know who Alibaba was prior to their IPO (Saba, 2014). However, online consumerism is largely driven by price, so if Alibaba can offer products at a lower price than the incumbents, consumers will choose Alibaba. Another aspect that Alibaba must be aware of when moving into the United States, is that consumers have different tastes and preferences compared to Chinese consumers. eBay faced this same issue when they attempted to compete with Alibaba in the Chinese marketplace. Alibaba may have to change their business model or offerings to meet consumer’s needs.
8 Moving into Mobile Platforms: Many E-commerce companies are beginning utilize mobile applications to sell their products. This presents many challenges as security issues have become a great concern to users recently. However, this market is a huge opportunity for businesses as recent surveys demonstrate that 86% of American consumers would prefer to use an e-wallet to cash or credit (Passport GMID, 2014). Another aspect of mobile competition Alibaba will face is intense competition for customers in order to reach critical mass. There are negotiations between Alibaba and Apple to collaborate with their Alipay and ApplePay services (Forbes, 2014). This would give Alibaba a huge advantage over competitors in the mobile marketplace. The sale of Counterfeit Items through Alibaba: A major concern of investors and potential customers is the purchase of counterfeit items through Alibaba channels. While Alibaba wants to provide smaller firms the opportunity to sell their goods to a larger marketplace, they must be aware that some of these companies may sell knock offs. To combat this Alibaba claims to be spending $16.1 million a year on identifying potential items that may be counterfeit (Wall Street Journal, 2014). This is especially troublesome if fakes are shipped to consumers and they leave bad reviews, as many online consumers spend as much as 30% of their time researching the legitimacy of products and vendors (Passport GMID, 2014). Alibaba must be aware of this in the United States, where the potential sale of counterfeit items
You've reached the end of your free preview.
Want to read all 11 pages?
- Summer '19
- Management, Alibaba, Alibaba Group