China’s Gargantuan Online Bazaar: Alibaba

Founded in 1999, the Alibaba Group boasts the world’s largest online business-to-business trading platform for small businesses: Alibaba.com. Founder Ma Yun, commonly known as Jack Ma, created an English-language portal that would connect Chinese manufacturers to overseas buyers and suppliers. Based in Hangzhou, China, Alibaba.com reports on its site that as of the end of 2012 it had 36.7 million registered users from more than 240 countries and displayed 2.8 million supplier storefronts.


Alibaba’s Network of E-commerce Platforms

Alibaba: The World's Largest E-Commerce PlatformThe umbrella group Alibaba is a family of websites that account for more than 60% of all parcels delivered in China. It has several subsidiaries, including a retail and payments platform, a shopping search engine, and a cloud computing company. Just to get a sense of the magnitude of its business, The Economist reported that between Taobao and Tmall – Alibaba’s e-commerce retail platforms – processed $170 billion in transactions in 2012, more than Amazon and ebay combined.

Alibaba is the beneficiary of the e-commerce boom in China that has grown 120% annually since 2002, according to MGI. The Alibaba Group, still a privately-held company, has an IPO in the works, and reports say that it will value the company between $55 billion and $120 billion.


Bringing Vitality to SMEs Anywhere, Anytime

Alibaba.com opens up international trade for small and medium-sized businesses everywhere, including developed countries such as the U.S and the United Kingdom. Alibaba.com allows SMEs to compete globally, and profit from having goods and services bought and/or sold on a 24/7 basis. Alibaba.com itself generates revenue by charging listing fees to the manufacturing and trading companies that advertise products on the site.


Alibaba Doesn’t Necessarily Mean Quality

Another way to think of it is that Alibaba.com is a type of manufacturers’ directory – Those SMEs with no existing relationships in China may find Alibaba.com as a first port of call in identifying and dealing with Chinese manufacturers. However, while Alibaba.com represents more than 500,000 Chinese factories, it doesn’t mean they all produce high quality merchandise.

There have been grave complaints about piracy and counterfeiting on Alibaba websites. A prime example occurred when counterfeit versions of iPhone 5  were touted on Taobao before the product was even available for sale in China.  In 2009, it came to light that ‘golden status,’ a sign of stellar integrity, was intentionally or negligently given to 2,236 dealers who had defrauded buyers.

All of this has not gone unnoticed by the American government as Alibaba.com and Taobao have at one time or another been placed on the US trade representatives ‘blacklist.’


The E-Commerce Giant Takes Proactive Efforts

Alibaba has confronted these problems head-on and has made a very firm stand against any counterfeited product on its website properties. An IP task force headed by CEO Jonathan Lu has cooperated with the Chinese government to report any Alibaba store that has infringed on intellectual property rights.

Taobao’s desire to clean up its past image of impropriety is reflected in the pact recently signed with the the Motion Picture Association (MPA) to curb the sale of counterfeit copyright infringed products.
See: RediSource Quality Assurance Services

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