Alibaba is Fulfilling Its Social Responsibility

 

While both the release of iphone 6 and Alibaba’s IPO have been fighting to be on the front pages, I would prefer to read more about Alibaba. Because its story reminds me of Milton Friedman’s allegation that the social responsibility of business is to increase its profits. Even though China does not have a free market, Alibaba’s profiting benefits the whole.

 

The middle class in China is rising, its size increasing, Alibaba is having more to sell. And Alibaba has 600 billion people in China using Internet – its potential customers doubles the population of the US. In this case, Alibaba’s business is big enough to affects many aspects in China, and even the world.

 

Alibaba is making all parties happy, even though it is facing the problem of couterfeits. Alibaba is teaming up with more and more foreign companies to sell the authentic luxury, which benefits the foreign companies because it brings them more customers who would like to pay for the authentic. On the other side, while the safety of food has been a great concern of the public in China, the middle class can have more confidence about the food they are eating; because Alibaba is totally capable of deliver foreign food within an almost incredibly short period of time.  Benefiting from the taxation, the Chinese government must be willing to see Alibaba’s business is promoting the national policy of transforming China “from an export-driven country to a consumption based economy”, as John W. Spelich wrote. And supposing that Alibaba itself is happy to profit, all stakeholders are happy about Alibaba’s business, because they are all benefited from its gain.

 

Moreover, Alibaba’s e-commerce is reshaping some other industries. Post offices have been dying away because of the birth of Internet. Fewer and fewer people tend to take their time to write a letter or even a check, because the substitutes like email and e-transfer have joined the competition. But now, Alibaba’s e-commerce is bringing the post offices to a revival. The e-commerce is not eliminating post office but acting as an incentive to increase the efficiency and capacity of the nowadays post offices. Accordingly, the e-commerce is also reshaping the retailer’s world. It is never too much to say that Alibaba is Changing China.

 

If benefiting a society is the best way an individual can fulfill his social responsibility, then Alibaba’s very way of profiting demonstrates that the social responsibility of business is to increase its profits.

 

Reference:

http://qz.com/203912/ali-babas-e-commerce-head-has-a-plan-to-save-post-offices-around-the-world/

http://site.ebrary.com/lib/ubc/reader.action?docID=10187339&page=171