Strategic Management of Ecommerce (Repaired).doc

Nevertheless taobao also dint make a clear

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don’t make a clear distinction between business and consumer” (Kuchinskas, 2004). Nevertheless, Taobao also dint make a clear distinction between the customers and business within its first years till the development of Tmall. Currently most of the sellers within the Taobao marketplace consists of small business who have less than 10 staff and employees. Tmall was more focused on higher quality of goods and products and was able rapidly develop, thanks to increase in population especially the growth of the middle-income class whose disposable incomes allowed for brand conscious preference (Rao, 2016c). The businesses who list on Tmall are required to pay some upfront fee every year and an additional commission fee that is based on the category of their respective products (Alibaba, 2016a, p. 69). Tmall Global was launched in 2014, as a platform upon which various international brands could gain access to the Chinese customers. As of March 2016, statistical results show that over 100,000 brands were being sold on Tmall (Alibaba, 2016a, p. 69) as well as Amazon itself which had previously had troubles of Chinese market penetration. 8
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Today, both the marketplaces, Taobao and Tmall are positioned as crossroads for Alibaba services and marketplaces. Amazon Amazon was first started in the summer of 1994 by Jeffrey Bezos, a Princeton University graduate who left his position as a senior VP of a reputable bank in the Wall Street, D. E. Shaw. Jeff took opportunity that was presented by the rapid upsurge in the use of internet by individuals to open an internet venture (Kotha, 1998, pp. 214-215). The organization was first incorporated as “Cadabra”, but was later renamed into Amazon for practicability reasons; that is to appear on top alphabetical directories and search lists and also to evoke the notion that the organization can grow to the size of the Amazon River. The founder deliberately decided to sell books since physical brick and mortar stores were limited in terms of storage capacity. The website was launched a year later in 1995 starting with a product portfolio of almost a million books. By September the same year marketplace was already selling $20,000 weekly (Kimble and Bourdon, 2013, p. 60). Two years later in 1997, Amazon got floated for about $300 million (NAQDAQ: AMZN) in attempt to realize its vision of becoming the “the leading on-line retailer of information-based products and services” in the SEC filing (Knecht, 1997). As stated in Jeffrey Bezos first letter to shareholders, the main mission of the company from the beginning was value provision to the customers. Amazon expanded their portfolio to cover sale of Music and DVDs and geographically when they launched Amazon.co.uk and Amazon.de through acquisitions (Ritala et al., 2014, p. 241). Amazon applied an approach that was almost similar to the pure merchant but evolved into a complete marketplace in 1999. In 2000 Amazon turned the Auctions and zShops into Amazon Marketplace a platform that give the company suppliers the ability to manage their own storefronts (Hagiu, 2007, p. 127; Zhu and Liu p. 8). Thus, as a result strategic management of the internet, what began as a market for books has today turned into a platform where basically anyone form anywhere can sell anything right alongside Amazon’s own wares. Through the marketplace, the customers are able to access from both Amazon
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  • Fall '15
  • PROFESSOROKWIRI
  • Alibaba Group

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