What is Alibaba

what is alibaba

What is Alibaba and How Does It Work?

All You Need to Know about Alibaba

what is alibaba

Alibaba is the most prevalent China’s internet shopping site, on the planet’s quickest developing e-business market. Its three primary e-commerce websites namely: Taobao, Tmall and Alibaba.com have a huge number of clients, and host a large number of dealers and organizations. In fact, Alibaba handles more business than some other e-trade organization. Exchanges on its online platform totals over $248 billion a year, more than those of eBay and Amazon.com.

china e-commerce marketSource: WSJ

What is Alibaba?

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History of Alibaba

Alibaba traces its roots to as early as 1999 when Jack Ma established the site Alibaba.com, a B2B entry to associate Chinese manufacturers with abroad market. The organization was established in Hangzhou, and the name originated from the character Ali Baba from the Arabian writing One Thousand and One Nights as a result of its all inclusive appeal. Currently Daniel Zhang and Joseph Tsai are the CEO and Executive Vice Chairman respectively while Jack Ma – the founder is the Chairman. Read history of Alibaba from AlibabaGroup.com

Most companies, when they’re doing good, they enjoy today’s wonderful life. They don’t worry about five years later—but I worry about five years later.

Jack Ma

What does Alibaba do?

Let’s see what BBC.com said first:

The company’s first business was alibaba.com set up by the company’s founder Jack Ma in 1999. The website helps to connect exporters in China (and other countries) with companies in over 190 countries around the world.

The system allows a business in the UK to find a manufacturer in China and have a range of goods produced and shipped.

The company also offers online marketing, cloud computing and a logistics operation.

  • B2B: Alibaba
  • B2C: Aliexpress, TaoBao, Tmall
  • Online payment system: Alipay.com
  • and etc

Normally, most people consider it as a blend of Amazon, Ebay, Ebay and Google. Clients use Alibaba to shop on the web, sell their products and make online payments through PayPal.

Alibaba mostly interfaces Chinese suppliers with purchasers. It has since extended to dispatch different sites – including Taobao and Tmall – which now overwhelm the e-trade market. It goes about as a mediator giving individuals and organizations a chance to utilize its stage to offer their own particular things in sell-offs furthermore profits from promotions through Google ads.

Alibaba has two retail locales: Taobao (Alibaba’s number one site), which highlights a huge number of non-branded items sold by littler traders; and Tmall, which offers branded items. The two locales are gigantically well known, and statistically speaking they deliver more than 50% of all parcels in China. As indicated by The Wall Street Journal, their joined exchange volume in 2012 topped over $160 billion, more than Amazon and eBay’s income consolidated.

Benefits of Alibaba to Buyers

Buyers are likely to experience numerous benefits by using Alibaba to buy their products. This include:

Affordable Prices:

Most of the products are manufactured from companies in China that enjoy economies of scale hence low manufacturing and product costs as contrasted with other countries. You will save up to 10 times by sourcing your products from Alibaba.


There are a huge number of items and a large number of production lines to source from. This helps the buyer to select the best products in the market.


The chances that all quality gadgets are in Alibaba are high. Odds are around half of gadgets are made in China. A portion of the processing plants are the main spots online that make these items.


Alibaba allow manufacturers to send samples and customize them to meet their clients’ criteria. If you need a customized product, odds are the manufacturers in Alibaba can redo it to your preferring.

How Sellers Benefit from Alibaba

As a merchant, there are numerous preferences of selling on Alibaba.com. These incorporate the following:

  1. Global Access: The site is the biggest online e-commerce website in China and a huge player in the worldwide Ecommerce field. This permits access to global markets and purchasers.
  2. Saves on Marketing Costs: One of the upsides of Alibaba is that products are advertised effectively. Alibaba charges dealers for the advantage of utilizing their ads. This guarantees that potential clients see your item particularly when they are searching for related products. The extra expenses of promoting a brand independently are lessened as Alibaba deals with this for a seller.
  3. Offers Additional Features: Alibaba offers numerous features and components which are likewise paid for by the vender. These incorporate a Search engine, a Trade Manager, an e-shop among others. This helps them to manage and sell their products with ease.
  4. Learning and Support: Forums offer backing and learning chances to new dealers and apprentices. The fundamentals of worldwide exchange and online frameworks are accessible at these discussions. There are likewise choices to approach specialists for data and counsel at no extra charges.

Benefits of Alibaba to Manufacturers

Alibaba has made producers feel calm with their Gold Supplier membership feature.

  • Helps them gain trust with customers: The most essential focal points of Gold Supplier membership is that you can get more inquiries furthermore pick up the trust of potential clients.
  • Boosts their advertising: Alibaba gives producers numerous odds to meet potential clients when contrasted with comparative online ecommerce sites such as Amazon and EBay. It additionally promotes their products effortlessly and advantageously.
  • Helps them look for clients: Most makers feel searching for clients specifically as a more successful methodology than posting such products through emails. Alibaba helps them redesign their products and post selling leads to potential customers. This builds the number of inquiries and sales.
  • Has unique features: for example, TradeManager and Trade Alert-Usually, clients contact producers through TradeManager. It is so viable and helps them to acquire additional business links quickly.

How does Alibaba make money?

Alibaba doesn’t charge any posting and listing. Rather, vendors pay Alibaba for promotion, advertisement and different administrations that will make them a stand-out from other sellers. The advertisements show up when one clicks on the search bar, much like Google.

Awards and Achievements

The Chinese e-commerce giant $1 billion first sale of stock (IPO) on 19th September 2014 placed among the highest priced companies in the US following quite a while of foresight. Infact, with the IPO – the biggest in tech history, experts taunt it as the most advanced ecommerce company in technology at this moment.

ipoSource: WSJ

Alibaba made $3.5 billion worth of acquisitions in 2014. Its shopping spree has been amassed in Asia so far, yet the aggregate is beginning to focus on the U.S. market. It has gone ahead over time to acquire a minority stake in California based Tango (a free calling app) for $215 million. Alibaba as of now has its own particular application, Laiwang, which boasts of over 10 million clients.

Alibaba’s buyer to-purchaser entry Taobao, like eBay.com, components about a billion items and is one of the 20 most-gone to sites all around. The Group’s sites represented more than 60% of the bundles conveyed in China by March 2013, and 80% of the country’s online sales by September 2014. Alipay, an online installment escrow administration, represents generally 50% of all online installment exchanges inside China.

All things considered, Alibaba – through its different locales – facilitates over $250 billion of web shopping exchanges yearly, which is, as per the Wall Street Journal, more than eBay and Amazon.com consolidated. The Journal refers to information from a gathering called iResearch anticipating that China’s e-trade market has gone from $74 billion in 2010 to $295 billion before the end of 2013, with an anticipated aggregate of $713 billion by 2017. The Hong Kong representative CLSA says that 80% of China’s internet shopping is done through Alibaba.

Statistics: How huge is Alibaba?

Hangzhou-based Alibaba is China’s biggest web organization and works on the planet’s biggest web market. It additionally has workplaces in the U.S., U.K., India, Japan and Korea. China has 560 million web clients – twice the same number of as the U.S. – who spend a normal of 20 hours a week on the web. With 24,000 representatives, a larger number of individuals work for Alibaba than Yahoo and Facebook consolidated. The site had 36.7 million enlisted clients in 2012, and Taobao.com is one of the world’s 20 most-clicked destinations, Business Insider reported.

On the eleventh of November consistently, Alibaba conducts an enormous web shopping deal which matches with what is referred to in China as Single’s Day – a day on which youngsters mourn or celebrate being single. On November 11 2013, Toabao and Tmall made 35 billion Yuan ($5.75 billion) in the 24 hour time frame. In the interim, Alibaba’s versatile installments administration Alipay is in charge of 70 percent of the greater part of China’s portable installments in 2013, The Wall Street Journal reported.


Alibaba turned over $6.73 billion in 2013 and is relied upon to turn over a great deal more this year. As a correlation, Facebook made $3.7 billion in 2011, just before it had its own particular IPO which wound up giving the long range interpersonal communication organization an estimation of more than $100 billion. Additional energizing is the organization’s expansion in benefits, which have tripled in a year.

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