The Business Network of the Alibaba Group

Abstract

Founded in 1999, the Alibaba Group had become China’s leading e-commerce company by 2008. It owns and operates Alibaba.com (the world’s largest business-to-business e-commerce platform) and Taobao.com (China’s number one consumer-to-consumer e-commerce platform). Alibaba.com Limited raised US$1.7 billion at its initial public offering (IPO) on the Hong Kong Stock Exchange in November 2007, making it the world’s second biggest Internet offering after Google’s 2004 IPO on the NASDAQ. Taobao.com also attracted significant international attention because it managed to displace the once dominant eBay (the world’s largest consumer marketplace) in China by 2007. The Alibaba Group attributes its success largely to the business network it has fostered. It founded several sister companies alongside Alibaba.com and Taobao.com to cross-sell and cross-market one another’s services and offer packaged deals. In this way, it formed a network of suppliers, partners and customers to fully exploit and serve their market. The Alibaba Group’s vision is to build a business network that will make it possible to do all aspects of business online. Considering the growing e-commerce industry worldwide, three questions are pivotal: 1) How should the Alibaba Group anchor its long-term strategy – further expand the business network by including players from many more industries or specialise in several strong industries within the business network? 2) Would another business model emerge to challenge the Alibaba’s business network? 3) How would the Alibaba Group face competition within China and abroad – continue to focus on the Chinese market or grow outside the home base and build a global business network?