In Response to “Asian Invasion E-Commerce is where it’s all at”
by June Ong
To the average ear, the name “Alibaba” conjures up thoughts of Aladdin or maybe the iconic “open sesame” phrase. However the folks in the business know, realize Alibaba as an online shopping platform from China, that has recently debuted as a publicly traded company with phenomenal success. The company started up in 1999 with CEO Jack Ma and 17 of his friends. I feel that they entered the market at a perfect time. China is undergoing strong economic growth, the population is becoming tech savvy and the internet shopping and trading boom had just begun. This is just speaking from personal experience, but online shopping has noticeably gathered momentum in recent years. The convenience of being able to purchase products in your pajamas immediately at your fingertips without having to drag oneself to a physical store is without a doubt, quite satisfying. It appears that consumers have overcome fears of credit card fraud in online purchasing, due to improved security technology and reliability that online companies offer. But what really makes Alibaba so different from other successful online shopping platforms such as Amazon or Ebay? The sole key difference is the dominance of Alibaba in the Chinese market. However to compete with well known North American e-commerce companies, it appears that Alibaba although having success thus far, may have to alter and take a more unique approach to their business model to differentiate. Another point to give some thought to, would be that although there was a sharp demand for shares with Alibaba raising $25 billion, is this just a spike in demand for shares because the whole world is hyped up for the company’s debut as a publicly traded company? Only time will tell. My bet is that Alibaba will continue to be a successful company but the shares will go down once the initial hype subsides.
http://blogs.ubc.ca/gracecheng/2014/10/05/asian-invasion-e-commerce-is-where-its-all-at/
http://www.theglobeandmail.com/report-on-business/international-business/us-business/alibaba-shares-surge-46-in-their-debut/article20693217/