Furthermore these consumers are expected to spend 1000 per year online These

Furthermore these consumers are expected to spend

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any other country. Furthermore, these consumers are expected to spend $1,000 per year online. These estimates indicate a robust growth in Chinese e-commerce market. Alibaba being a prominent player in the market is well positioned to drive top line growth. 2. Rising Investments and demand of E-commerce portals Very few E-commerce portals garner the amount of trust which Alibaba has. Naturally, when Alibaba expands to a new country, it comes with the years of trust on the brand. And hence, it gives tough competition to the local e-commerce players. Plus, it has the backing of the manufacturers. Threats 18
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1. Trends indicate weakening of export growth Weak global economy is negatively impacting the Chinese export market. According to the recent data, the growth in overseas shipments from China had ground to a near halt in July 2012, with exports up just 1% from the same month in 2011. This growth is well beneath the 11.3% in June 2012. Overseas buyers have become less active as evidenced by a decline in China’s export growth rate. Deceleration of export growth will have a negative impact on the company’s marketplaces. 2. Overall rising competition Other entities like Tencent and JD.com are local competitors to Alibaba in China while Amazon and eBay are the global threats. 3. Stability of the economy The stability of the Chinese economy will also play a role in deciding the success of the business. But since almost all of Alibaba’s business comes from within China, the global markets will have an impact only in dire situations. 4. Dropping profitability With rising demand in service levels from E-commerce portals, the profitability of most E- commerce firms is dropping which is a point of worry for Alibaba as well. 7. Counterfeit Issue and Alibaba’s Respond: Fake product problem When Alibaba firstly did its IPO, investors prospect Alibaba will accomplish extraordinary outcome, and already has rapid growth rate because Alibaba has stable income structure. But after 4 month, there was a critical problem coming to the front. These are poor sale and credibility problem. In terms of poor sale, sales during 4 th , 2014 increase compare to previous sale, and net income dropped 28% point. It was small unsatisfying result as for investors. Rather than credibility problem is more important issue. Chinese official administration division made the statement that Alibaba connivance sales of fake deal in Taobao. In an e-commerce 19
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environment based on trust, this lack of trust will be a major weakness for Alibaba and we will propose how to solve this reliability problem. In contrast to other e-commerce companies involved in direct distribution, Alibaba has a B2B distribution channel and is simply a platform- providing form, so it is vulnerable to the distribution of counterfeit products. So what is Alibaba's response to these problems, and what is the appropriate solution?
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