Respond to Mark Graham’s Blog
The historic IPO of Alibaba attracts the attention of a large portion of investors and brings Alibaba to the world stage. Alibaba is a Chinese e-commerce company which provides retailer platform via websites, electronic payment services, and could computing services.
In Mark’s view, it is better for Alibaba to stick to the Asian markets instead of American markets because of the high entrance barrier and competitive opponents. Nevertheless, I hold total different ideas with him. To achieve the globalization goal, Alibaba has to have a e-commerce center in USA.
There are several reasons why Alibaba can earn profit by entering the American Market. Initially, Alibaba is making profits by selling advertisement, providing website service which is different from Amazon and Wal-Mart which are benefiting from selling products. In other words, the task of Alibaba provides the largest marketplace in the world for others to sell. In the big marketplace cycle, the more buyers come, the more sellers come which resulting in more buyers and more sellers. By entering the American market, they can Americanize their business model and provide a platform for transactions between local firms and clients.
Furthermore, because of the low Chinese labor cost, Alibaba is capable of providing cheaper products compare to Amazon. Alibaba enable American sellers to buy Chinese products in a more convenient way.
Work Cited:
- Mark Graham’s Blog “we don’t need America”https://blogs.ubc.ca/markgraham/2014/11/05/we-dont-need-america/
- YouTube Video “ Alibaba effect” https://www.youtube.com/watch?v=MbuVfwWIT40
- http://en.wikipedia.org/wiki/Alibaba_Group
- http://www.biznews.com/wp-content/uploads/2014/09/alibaba1.jpg
- http://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2014/09/05/101975912-alibaba-group-jack-ma.530×298.jpg?v=1409937696
