Online Retail Platforms under Alibaba Group

Image taken from here.

As a regular and loyal customer at Taobao.com, I am not surprised at all to see Alibaba Group’s success. Its dominance in Chinese e-commerce is undeniable: Taobao or Tmall is “the first online stop for many shoppers in China,” according to Steve Schaefer’s article, which I can also attest to. Despite the rapidly growing amount of new entrants in the competition, Alibaba’s dominant position is highly unlikely to change, and here are two main reasons why:

1. Positioning

Taobao’s innovative business model was truly a first in the fledgling Chinese e-commerce market. The stories of store owners who reaped the benefits of having an online shop motivated more and more people to start their business on Taobao, which in turn contributed to attracting more customers as the variety of products available increased. Seeing it offering a broad market, most entrepreneurs would choose Taobao to launch their business. Other platforms simply cannot enter the success cycle that Alibaba leads. As Ries and Trout would put it, Alibaba has won the battle of getting into the mind of consumers.

2. Value Proposition

While customers like myself are already immensely satisfied by the convenience online shopping offers, Alibaba is constantly developing its programs and features to provide better assistance to both consumers and sellers. Alibaba’s founder, Jack Ma, believes that “service is the most expensive product in the whole world; therefore, the best service is to not require any service.” The little need of direct service from Alibaba is indeed what consumers and sellers find when they are using the website. Further products, such as Alipay and mobile apps, are all designed to maximize convenience for customers. Such products’ success again solidify Alibaba’s leading position in the Chinese e-commerce market.

Equipped with these two competitive advantages, the e-giant of China will not dwindle unless something extremely disruptive is introduced to the market.

Work Cited

“Product Positioning.” Product Positioning. N.p., n.d. Web. 30 Sept. 2014. <http://www.quickmba.com/marketing/ries-trout/positioning/>.

Schaefer, Steve. “The Case For Alibaba: China’s E-Commerce Tollbooth.” Forbes. Forbes Magazine, n.d. Web. 30 Sept. 2014. <http://www.forbes.com/sites/steveschaefer/2014/09/29/the-case-for-alibaba-chinas-e-commerce-tollbooth/>.

“马云.” |人物时事漫画|微漫新闻网. N.p., n.d. Web. 30 Sept. 2014. <http://www.vcartoon.cn/renwu/201208013188.html>.

Generally, a company’s priority is to make as much profit as it can; however, it is tremendously important for the company to maintain an applauding business ethics.  Nestlé, a multibillion group, has indeed shown effort to contribute to its community.

A rap video, Superbaby, was released by Nestlé India as part of their “Stay Healthy Stay Healthy breastfeeding week” campaign. This successful campaign leads no monetary benefit toward the group because Nestlé products are not involved at all; it was initiated to enhance the “well-being of customers.” (Mainwaring) Although Freeman’s Stakeholder Theory borders being too idealistic, Nestlé has ultimately fulfilled one—if not more—aspect of its social responsibilities. Friedman deems such acts of companies hypocritical; I strongly disagree with his point and think that he has overlooked the benefits a company can obtain from showing good business ethics.

For Nestlé, thousands, or even millions of dollar must have been put into the “Stay Healthy Stay Healthy” campaign. But did the money spent merely raise awareness for the benefits of breastfeeding?The answer is no. From a marketing perspective, Nestlé has demonstrated an excellent ethics that cannot only gather publicity, but also possibly deduct some amount of taxes. As a result of its voluntary initiative, Nestlé is now more likely to gain favourable reputation than its rivals who do not involve in executing social responsibilities. It is then deduced that when the corporate executives are making business decisions, dedicating money to social responsibilities is a great alternative to benefit stakeholders, and at the same time, marketing the brand.

Works Cited

Mainwaring, Simon. “Nestlé© Wins At Social Storytelling By Combining Purpose And Product.” Forbes. Forbes Magazine, 9 Sept. 2014. Web. 11 Sept. 2014. <http://www.forbes.com/sites/simonmainwaring/2014/09/09/nestle-wins-at-social-storytelling-by-combining-purpose-and-product/>.

“What is Stakeholder Theory — R. Edward Freeman.” YouTube. YouTube, n.d. Web. 11 Sept. 2014. <https://www.youtube.com/embed/bIRUaLcvPe8>.

Zimmerli, Walther Ch., Klaus Richter, and Markus Holzinger. Corporate ethics and corporate governance. Berlin: Springer, 2007. Print.

HEY HEY HEY This is Eva Qiu. I am just starting off my first year here at UBC (exciting!). A little bit about me: I am living on rez, in Totem Park. I lived in North Van for the past four years but originally came from Shanghai. I have an evil little sister who is the sole reason that I won’t get homesick. I love travelling, and have been to uhh… a lot of places, scattered in Asia, North America, and Europe. I also enjoy movies, so I am banking with Scotiabank. That’s about it 🙂