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Alibaba the B2B wholesale marketplace

Hangzhou, China - March 25, 2018: The main building in the headquarter of Alibaba group in Hangzhou. Alibaba, founded by Jack Ma, is the biggest e-business company in China.

What is Alibaba?

Alibaba the B2B wholesale marketplace

The Alibaba Group Holding Limited or more commonly known as Alibaba.com is a Chinese multinational technology company which specializes in ecommerce , retail , internet and technology. The Chinese company is most commonly known for it’s ecommerce website which is called AliExpress. This is the most popular subsidiary of the Group and is made up of small businesses within China. Alibaba Group was founded on the 28 of June 1999 but it’s subsidiary online retailer, Aliexpress.com was launched in the year of 2010.The company is said to have a net worth of around $185.42 billion USD. The multi-national company was co-founded by Jack Ma who is said to have a net worth of about 41.8 Billion USD along with 17 other individuals. AliExpress is the World’s largest retail and ecommerce company.

Subsidiaries
  • Aliexpress
  • Daraz
  • Alibaba cloud
  • Cainiao
  • UCweb (UC Browser)

These subsidiaries are the most popular ones as there are many more companies and brands related to the Group of companies.

Naming and founding Alibaba

Jack Ma came up with the name Ali-baba while in the City San Francisco , while in a café . He chose the name after deciding that it was very relatable and so it would be very relatable to their customers, after asking a waitress what she thought when she heard the name ,the waitress responded with a quote from, “Ali Baba And The Forty Thieves” which gave him further confidence in the name.

Alibaba vs Amazon

The ecommerce giants are considered as being the biggest ecommerce retailer in the World due to its multinational status. The multi-billion dollar company boasts alot more storage and warehouse space than Amazon and ships to almost every accessible country across the globe. Alibaba claims to be the fastest shipping company in the World as they have been stated to say products can be delivered within at least 3 days, arriving directly to your doorstep . Amazon has more net-worth than Alibaba although, both are said to be among the richest companies in the World. Alibaba and Amazon both have pros and cons as it relates to product and customer service quality .

The growth of Alibaba

Alibaba hit the headlines with the world’s biggest IPO in September 2014. Today, the company has a market cap among the global top 10, has surpassed Walmart in global sales, and has expanded into all the major markets in the world. Founder Jack Ma has become a household name.

From its inception, in 1999, Alibaba experienced great growth on its e-commerce platform. However, it still didn’t look like a world-beater in 2007 when the management team, which I had joined full-time the year before, met for a strategy off-site at a drab seaside hotel in Ningbo, Zhejiang province. Over the course of the meeting, our disjointed observations and ideas about e-commerce trends began to coalesce into a larger view of the future, and by the end, we had agreed on a vision. We would “foster the development of an open, coordinated, prosperous e-commerce ecosystem.” That’s when Alibaba’s journey really began.

Alibaba’s special innovation, we realized, was that we were truly building an ecosystem: a community of organisms (businesses and consumers of many types) interacting with one another and the environment (the online platform and the larger off-line physical elements). Our strategic imperative was to make sure that the platform provided all the resources, or access to the resources, that an online business would need to succeed, and hence supported the evolution of the ecosystem.

The ecosystem we built was simple at first: We linked buyers and sellers of goods. As technology advanced, more business functions moved online—including established ones, such as advertising, marketing, logistics, and finance, and emerging ones, such as affiliate marketing, product recommenders, and social media influencers. And as we expanded our ecosystem to accommodate these innovations, we helped create new types of online businesses, completely reinventing China’s retail sector along the way.

Alibaba today is not just an online commerce company. It is what you get if you take all functions associated with retail and coordinate them online into a sprawling, data-driven network of sellers, marketers, service providers, logistics companies, and manufacturers. In other words, Alibaba does what Amazon, eBay, PayPal, Google, FedEx, wholesalers, and a good portion of manufacturers do in the United States, with a healthy helping of financial services for garnish.

Alibaba the B2B wholesale marketplace

Of the world’s 10 most highly valued companies today, seven are internet companies with business models similar to ours. Five of them—Amazon, Google, and Facebook in the United States and Alibaba and Tencent in China—have been around barely 20 years. Why has so much value and market power emerged so quickly? Because of new capabilities in network coordination and data intelligence that all these companies put to use. The ecosystems they steward are vastly more economically efficient and customer-centric than traditional industries. These firms follow an approach I call smart business, and I believe it represents the dominant business logic of the future.

What Is Smart Business?

Smart business emerges when all players involved in achieving a common business goal—retailing, for example, or ride sharing—are coordinated in an online network and use machine-learning technology to efficiently leverage data in real time. This tech-enabled model, in which most operational decisions are made by machines, allows companies to adapt dynamically and rapidly to changing market conditions and customer preferences, gaining tremendous competitive advantage over traditional businesses.

Ample computing power and digital data are the fuel for machine learning, of course. The more data and the more iterations the algorithmic engine goes through, the better its output gets. Data scientists come up with probabilistic prediction models for specific actions, and then the algorithm churns through loads of data to produce better decisions in real time with every iteration. These prediction models become the basis for most business decisions. Thus machine learning is more than a technological innovation; it will transform the way business is conducted as human decision making is increasingly replaced by algorithmic output.

Ant Microloans provides a striking example of what this future will look like. When Alibaba launched Ant, in 2012, the typical loan given by large banks in China was in the millions of dollars. The minimum loan amount—about 6 million RMB or just under $1 million—was well above the amounts needed by most small and medium-size enterprises (SMEs). Banks were reluctant to service companies that lacked any kind of credit history or even adequate documentation of their business activities. As a consequence, tens of millions of businesses in China were having real difficulties securing the money necessary to grow their operations.

At Alibaba, we realized we had the ingredient for creating a high-functioning, scalable, and profitable SME lending business: the huge amount of transaction data generated by the many small businesses using our platform. So in 2010 we launched a pioneering data-driven microloan business to offer loans to businesses in amounts no larger than 1 million RMB (about $160,000). In seven years of operation, the business has lent more than 87 billion RMB ($13.4 billion) to nearly three million SMEs. The average loan size is 8,000 RMB, or about $1,200. In 2012, we bundled this lending operation together with Alipay, our very successful payments business, to create Ant Financial Services. We gave the new venture that name to capture the idea that we were empowering all the little but industrious, antlike companies.

Today, Ant can easily process loans as small as several hundred RMB (around $50) in a few minutes. How is this possible? When faced with potential borrowers, lending institutions need answer only three basic questions: Should we lend to them, how much should we lend, and at what interest rate? Once sellers on our platforms gave us authorization to analyze their data, we were well positioned to answer those questions. Our algorithms can look at transaction data to assess how well a business is doing, how competitive its offerings are in the market, whether its partners have high credit ratings, and so on.

Ant uses that data to compare good borrowers (those who repay on time) with bad ones (those who do not) to isolate traits common in both groups. Those traits are then used to calculate credit scores. All lending institutions do this in some fashion, of course, but at Ant the analysis is done automatically on all borrowers and on all their behavioral data in real time. Every transaction, every communication between seller and buyer, every connection with other services available at Alibaba, indeed every action taken on our platform, affects a business’s credit score. At the same time, the algorithms that calculate the scores are themselves evolving in real time, improving the quality of decision making with each iteration.

Determining how much to lend and how much interest to charge requires analysis of many types of data generated inside the Alibaba network, such as gross profit margins and inventory turnover, along with less mathematically precise information such as product life cycles and the quality of a seller’s social and business relationships. The algorithms might, for example, analyze the frequency, length, and type of communications (instant messaging, e-mail, or other methods common in China) to assess relationship quality.

Alibaba’s data scientists are essential in identifying and testing which data points provide the insights they seek and then engineering algorithms to mine the data. This work requires both a deep understanding of the business and expertise in machine-learning algorithms. Consider again Ant Financial. If a seller deemed to have poor credit pays back its loan on time or a seller with excellent credit catastrophically defaults, the algorithm clearly needs tweaking. Engineers can quickly and easily check their assumptions. Which parameters should be added or removed? Which kinds of user behavior should be given more weight?

Are all of Alibaba’s products from China?

Alibaba.com is an online B2B marketplace where buyers and sellers from around the world can connect and carry out transactions. It is a secure, trusted platform that is used by millions and millions of businesses.Alibaba.com is part of the Alibaba Group and was founded by Jack Ma in 1999. This company is based in China but serves business in 190+ countries and regions and 40+ industries with over 5,900 different categories of product offerings. The platform is equipped with many tools and features that are designed to streamline B2B buying and selling.

As we mentioned, Alibaba.com is a B2B platform. This means that most, if not all, of the buyers and sellers on Alibaba.com are businesses. The typical suppliers are businesses that sell raw materials or manufactured goods. The typical buyers are retailers, wholesalers, sourcing agents, and manufacturers who source products for resell or private label for their own businesses. Sometimes, manufacturers buy raw materials on Alibaba.com and also use Aliabab.com to sell their completed products.

The bottom line is that buyers come to Alibaba.com to purchase goods or materials both cheaply and in bulk that they will ultimately resell for a profit.

Why buy from Alibaba?

There are several reasons why buyers use Alibaba.com. Let’s take a look at a few of the most common reasons why users choose Alibaba.com over other B2B eCommerce marketplace.

The platform is trustworthy
Alibaba the B2B wholesale marketplace

The main reason is that it is generally a trusted platform. People can be skeptical to spend money online, especially when it is the tune of thousands or tens of thousands of dollars. Several factors make Alibaba.com trustworthy. The first is the secure payment portal. Transactions are backed by a number of guarantees on Alibaba.com, but having access to a secure payment portal is attractive to buyers and sellers alike. This way, buyers don’t have to worry about their credit card numbers and other sensitive information being compromised.

Additionally, Alibaba.com offers a program called Trade Assurance, which ensures that buyers receive their shipments on time. It also guarantees that the quality of the products matches what was promised by the seller. Alibaba.com also offers Product Inspection Services, which is another measure that is used to ensure quality. Buyers can shop on Alibaba.com with confidence that they will get what they pay for every time, and if they don’t, they can count on Alibaba.com to go to bat for them until the dispute is resolved.

I hope you had a good read and that my post was very informative all the best in your future endeavours.

Written by odanemorgan

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