History and E-commerce of Alibaba
Alibaba Group is a well-known company around the world. The long history of Alibaba Group, the legend of the founder Jack Ma, the rapid development of e-commerce, and the internationalization of Alibaba group are important factors in Alibaba’s success.
History of Alibaba
In its initial stage, Alibaba was in a period of exploration and development. Alibaba Group was formally established in Hangzhou, Zhejiang province in 1999 by 18 people headed by Jack Ma, who used to be an English teacher. In September 1999, Alibaba, an English-language global wholesale trade market, was the group’s first website. In December 2001, Alibaba registered more than 1 million users.
Subsequently, Alibaba entered a period of growth. In May 2003, the shopping website Taobao.com was founded. In February 2004, Alibaba Group raised $82 million from financing, which became the largest private equity financing in the Chinese Internet industry at that time. In July 2004, Taobao.com released the PC version, a communication software for buyers and sellers to communicate in a timely manner. In December of the same year, Alipay, a third-party payment platform, was launched. In August 2005, Alibaba acquired all the assets of Yahoo China and received a $1 billion investment from Yahoo. In November 2007, Alibaba Internet Co., Ltd. was listed on the Hong Kong Stock Exchange. Founded in 2009, Alibaba Cloud is the world’s leading cloud computing and artificial intelligence technology company.
Then Alibaba Group entered a mature period. In April 2010, Alibaba officially launched AliExpress. Since then, Chinese exporters can reach global consumers. In August of the same year, the mobile application Taobao was launched. In June 2011, Alibaba Group announced that it would split Taobao into three groups. In January 2012, Taobao Mall officially changed its name to Tmall. In 2012, Alibaba Group adjusted its subsidiaries into seven business groups. In October 2014, Ant Group in terms of financial services was formally established. In March 2015, Alibaba Group announced that its global wholesale trading platform had reached strategic cooperation with ezbob and iwoca in the UK to help small and medium-sized enterprises in the UK to obtain working capital more conveniently when purchasing goods on the platform. In 2016, by integrating online, offline, and shipping, Alibaba launched Fresh Hema Supermarket. That is, this year, the GMV of Alibaba Group’s China retail market exceeded ¥300 million, and Alibaba became the world’s largest retail company. In November 2019, Alibaba’s Hong Kong stock market was listed, with a total market value of over 4 trillion Hong Kong dollars. In 2020, Alibaba’s annual business won the top 500 listed companies in China in 2019, ranking 18th in the Fortune China 500 list.
Founder Jack Ma
Jack Ma, born in Hangzhou, Zhejiang province in 1964, is the founder of Alibaba Group and one of the most successful businessmen in China. His name is known all over the world. Jack Ma was born into a poor family. He liked to listen to English radio since he was a child. He took the college entrance examination three times, and the last time, he was admitted to Hangzhou Normal University with a reduced score because of his excellent English score. After graduating from college, he worked as a teacher at a university for several years, until 1995 when he started his own business and founded a computer service company. After that, Jack Ma’s team developed several large websites. In 1999, he returned to Hangzhou and founded Alibaba.com. In October 1999, SoftBank Group Corp. in Japan, headed by Masayoshi Son, invested $20 million in Alibaba. This investment injected a powerful force into Alibaba’s development. Subsequently, in order to make shopping more convenient and fast for buyers, Jack Ma founded Taobao, which is almost well-known today, in 2003, and introduced a new payment method, Alipay, in the following year.
In 2007, Alibaba was listed on the Hong Kong Stock Exchange, and in 2014 it was officially listed on the New York Stock Exchange. As of February 2021, Alibaba’s total market value is as high as $713.1 billion. Jack Ma resigned as CEO of Alibaba Group in 2013 and remained as chairman of the board of directors of the group. In September 2019, Jack Ma resigned from the chairmanship of the board of directors and remained as a director of the group. Afterward, Jack Ma did not stop running. He began to make efforts in education, environmental protection, charity, and others to benefit society.
Alibaba E-commerce
In March 1998, the first Internet online transaction in China was successful, which officially opened the door to the rapid development of Chines e-commerce. At the same time, the rise of the e-commerce industry has also promoted the development of cross-border e-commerce. As far as cross-border export e-commerce is concerned, it can be divided into the following four stages:
The first stage is the initial period (1999-2003). At this stage, Chinese e-commerce companies only rely on traditional foreign trade companies, limited to providing supply and demand information online and completing transactions offline.
The second stage is the growth period (2004-2012). Cross-border e-commerce has realized the electronification of transactions, payments, and logistics, and gradually realized a complete online transaction chain. Then a relatively complete Internet electronic transaction platform emerged. At this stage, the B2B platform model is the main one, and some B2C platforms are gradually emerging, such as Milanoo.cn(2008).
The third stage is the exploration period (2013-2018). Different from the small quantities in the previous two stages, in this stage not only large factories became sellers, but also large businesses as buyers gradually formed a scale, which led to an increase in the proportion of medium and large orders. At the same time, mobile users were generated in large numbers. The ways and business types of cross-border e-commerce have begun to diversify, and the scale and performance have grown rapidly. The services of cross-border e-commerce have also been continuously improved.
The fourth stage is the mature period (2019-present). Participants in cross-border e-commerce have all developed to a relatively mature stage, and have begun to pay attention to refined and localized operations and implement them; they have also innovated in traditional models, and have begun to try to combine online and offline live marketing, and short video and other ways into cross-border e-commerce business.
Internationalization of Alibaba
Alibaba Group has had the international business since its establishment, but the business scale is small. After 2010, Alibaba focused on promoting the process of internationalization. The initial focus of internationalization was mainly on the United States, and the focus began to shift to Asia and Europe around 2015. Under the influence of globalization, many companies have begun to ambitiously explore markets in more countries in order to enhance their own competitiveness and establish a stronger competitive advantage.
Alibaba is the largest e-commerce company in China, and expanding the market is the only way to promote the company’s further development. Europe has always been an important stop for Alibaba’s overseas expansion. Alibaba has established a self-owned e-commerce platform in China as the main business, supported by financial services around the main business of e-commerce. The entertainment system of games and the complete business ecosystem of supporting local life and medical and health services are also included. Alibaba extends its leading position in China to the European market.
Most of the developed countries are concentrated in Europe. The level of economic, social, and technological development is higher than the world average level, and a large number of excellent enterprises have also gathered. When Alibaba enters the European market, it will have the opportunity to obtain resources and capabilities that the company may not be able to obtain in the Chinese market, such as using local technology to obtain advanced management or marketing experience and obtaining technical knowledge through cooperation with local enterprises or scientific institutions.
Europe has a high level of economic and technological development, a relatively stable political and social environment, and strong market influence. Exploring the European market is the only way for Alibaba Group to go international. In 2007, Alibaba established its first office in Europe in Geneva, Switzerland. The office is to help small and medium-sized enterprises in Switzerland and Europe to engage in import and export trade more conveniently in global economic development. In October 2015, Alibaba Group announced the details of its expansion in the European market, pointing out that Europe is an important step in its globalization strategy, and Alibaba hopes to serve as a gateway to China” for international brands and enterprises of all sizes.
Conclusion
Alibaba Group’s brands can be classified into the following three categories: The first category is trading platforms, mainly online and offline services in various aspects, including Taobao, Alibaba International Station, AliExpress, Lazada, and so on. The second category is information services, including shipping services, and efficient office services. The third category is financial services, mainly Ant Group and Alipay. The founder, Jack Ma, has grown from a small team to a large international enterprise. E-commerce and cross-border e-commerce in China have also been developed and grown by Alibaba in the past two decades. Alibaba has always maintained an innovative spirit in the development of global e-commerce in various fields.
