Part 3: Designing a Customer-Driven Marketing Strategy and Marketing Mix
Company Case 14
Alibaba: The World’s Largest E-Tailer Is Not Amazon
Synopsis
As U.S. consumers rapidly add products to their carts on Amazon, Walmart.com, and
various other online retail sites, most have never even heard of Alibaba. But while all the
others have gone about building massive online businesses, Alibaba has been hard at
work creating an enormous online empire. It has done so with one little advantage—1.3
billion potential customers in its home market. Under the direction of visionary founder
Jack Ma, Alibaba has taken a somewhat different approach to e-commerce than its global
counterparts, one that has the potential to expand and allow Alibaba to become the most
pervasive provider of products and services in the world.
Teaching Objectives
The teaching objectives for this case are to:
1. Illustrate how quickly the Internet changes and how possible it is for startup
companies to have such a huge influence.
2. Introduce elements of e-commerce and show which factors have the greatest
influence on fueling e-commerce.
3. Fuel discussion as to how companies can take advantage of an ever-increasing
palette of Internet tools as a means of integrating their brands into the social
structure and conversation of consumers.
4. Analyze the nature of customer value when it comes to direct and e-marketing.
Discussion Questions
1. As a digital retailer, how does Alibaba provide value to Chinese consumers? What
sets of values are unique to the Chinese market?
There is a key quote from the case: “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
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.
If Alibaba were to have taken an Amazon approach where they fill their own
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Part 3: Designing a Customer-Driven Marketing Strategy and Marketing Mix
shoulders. Instead, Alibaba’s success has depended on the ability for myriad
Additionally, there parcel services and delivery intermediaries have had to
3. Analyze Alibaba’s business model relative to all the different forms of digital and
online marketing covered in this chapter.
There are many different forms of digital and online marketing covered in this
chapter. Among them are:
Web sites. Unlike most e-tailers, Alibaba has developed and acquired
many different e-commerce Web sites and established major divisions.
Taobao.com is a site that helps small businesses and private parties sell
Online advertising. We don’t have much information available here. What
we do know is that Alibaba’s largest site, Taobao.com, is basically an
E-mail marketing, videos, blogs, and mobile marketing. There is no
Social media marketing. It can be assumed that Alibaba relies heavily on
4. Can Alibaba succeed in countries outside of China? Why or why not?
This case outlines that Alibaba has been such a tremendous success almost
entirely because of its singular focus on the Chinese market. That market was
underdeveloped and hungry for commerce of any kind. Alibaba moved quickly to
fill the voids. When Alibaba introduced a concept to the Chinese market, it was
not previously known. However, as it eyes the US and UK markets, it will face a
dramatically different environment – one in which every single product line that it
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Teaching Suggestions
Before having students read the case, ask them what they know about Alibaba. Likely,
this discussion will be very brief. It may not be on their radar. Then ask them if they think
there is room for more e-tailers in the U.S. market. Responses to this may vary. Finally,
ask them what kinds of gaps they perceive in the U.S. market (what kinds of needs are
not being served?). Perhaps this may provide the context for opportunity for e-commerce
entrants.
This case was designed for use with Chapter 14. This case can also be used with the
retailing chapter on (Chapter 11) and the global marketing chapter (Chapter 15).