Questions and answers for Company Case 14 Alibaba: The World’s Largest
E-tailer Is Not Amazon
1. As a digital retailer, how does Alibaba provide value to Chinese consumers? What sets of
values are unique to the Chinese market?
– Alibaba provides value to Chinese consumers by providing high-quality shopping
experience with low prices, large consumer category, and a wide selection. In other e-
commerce, such as eBay and Amazon, there is fewer variety. The case study states, “E–
commerce in the U.S. is like a dessert. It’s just supplementary to your main business” Ma
said recently. “In China, because the infrastructure of [traditional retail] commerce is [so]
bad, e-commerce becomes the main course.” Alibaba provides not only consumer
products but also opportunities for investments.
2. Given that Alibaba does not own or distribute any of the merchandise exchanged on its
sites, describe what factors had to develop for the company to succeed.
– Alibaba does not have to worry about maintaining inventory in warehouses or
purchasing from vendors. In addition, the company depends on Chinese companies to
create business and market strength in the evolving market. They also had to better
develop their delivery services to satisfy their customers.
3. Analyze Alibaba’s business model relative to all the different forms of digital and online
marketing covered in this chapter.
-Web sites: Alibaba has different web sites and divisions. Taobao is used to help small
businesses and private parties sell their merchandise, similar to eBay. Alipay is similar to
PayPal, Tmal is similar to Amazon, and Tmall Box Office is an equivalent to Netflix.
Online advertising: Taobao is used as an advertising site. Vendors pay a fee to advertise
and sell their products. Social media marketing: Alibaba heavily relies on social media
site in China. They have also invested in Snapchat and other startup firms.