E-BUSINESS STRATEGY FOR A B2B BUSINESS WITH

EXAMPLE

E-business strategy

E-Business strategy is not just for Internet Businesses.  An e-business strategy is essential to
any organisation conducting business over the Internet.  It defines both your short-term and
long-term e-business goals and involves careful and skilled planning.

E-Business strategy is part of your corporate strategy and business plan, and also
interconnects with other plans including your marketing, organisational and IT strategic
plans.

E-Business Strategy and planning includes the following:-

 E-Risk management and contingency planning

 Web site technology, applications, infrastructure, security, resources and budget
 Web site content - Information architecture, customer experience, design, branding and
marketing
 Marketing planning and budgeting
 E-Commerce planning (if relevant)
 Change management strategy

e-Business Strategy and Process

1. Business Planning and Strategy

 Business Structure - determine business structure

 Legal Research - determine business legal requirements, prerequisite and implications
 Business Concept - determine business concept, practicability and prospects
 Business Strategy - determine business direction, , income requirements, customer or user
acquisition
 Operational Strategy - determine business operations requirements and prerequisite

2. Market Research, Planning and Strategy

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 Market Research - research market landscape and audience demographics
 Design and Usability Research - research audience landscape and brand and usability
requirements
 Competitive Research - research competitive landscape and your competitive approach,
brand and marketting strategy
 Brand Strategy - determine brand direction based on audience and market landscape
 Marketing Research and Strategy - Research and determine available marketing options.
For example: SEO, SEM, Social Networking, PR, Advertising

3. Design, Development, SEO, SEM

 Project Management - Select and assign project manager(s)

 Technology Selection - Technology and platform selection
 SEO, SEM and other marketing strategy implementation - Plan and determine the
marketing options and tailor the site structure and design to accomodate different online
marketing options
 Wireframing - Create site structure, navigation and how it intract with the users or clients
 Design and Development - Hire a design and development firm (or team) to create the
site design and branding and develop (program) the site.

4. e-Business Deployment and Maintenance

 Beta Launch, Bug Fixing and Usability testing - Launch the site in beta mode and have
testers (or volunteer users) to test your site for bugs and usability issues
 Hosting and Security - Select hosting and security componets for your site.

E-business strategy of Alibaba

Alibaba.com

Alibaba Group Holding Limited (also known as Alibaba Group and as Alibaba) is a Chinese
multinational technology company specializing in e-commerce, retail, Internet, and
technology. Founded on 4 April 1999 in Hangzhou, Zhejiang, the company provides
consumer-to-consumer (C2C), business-to-consumer (B2C), and business-to-business (B2B)
sales services via web portals, as well as electronic payment services, shopping search
engines and cloud computing services. It owns and operates a diverse array of businesses

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around the world in numerous sectors, and is named as one of the world's most admired
companies by Fortune.

Alibaba is the world's largest retailer and e-commerce company, is on the list of largest
Internet companies and artificial intelligence companies, is one of the biggest venture capital
firms, and one of the biggest investment corporations in the world. The company hosts the
largest B2B (Alibaba.com), C2C (Taobao), and B2C (T-mall) marketplaces in the world. Its
online sales and profits surpassed all US retailers (including Walmart, Amazon, and eBay)
combined since 2015.It has been expanding into the media industry, with revenues rising by
triple percentage points year after year.

E-business strategy

Alibaba.com is the undisputed leader in e-commerce for small businesses and the flagship
company of Alibaba Group. Alibaba.com offers a wholesale platform for small buyers on the
global site seeking fast shipment of small quantities of goods. Together, these marketplaces
form a symbiotic association of more than 50 million registered users in more than 240
countries and regions. Besides this, it also offers business management software and Internet
infrastructure services targeting businesses across China, and also provides educational
services to nurture enterprise management and e-commerce professionals. Alibaba.com has
offices in more than 60 cities across Greater China, Japan, Korea, Europe and the United
States.

By serving 2 billion consumers and servicing tens of millions of merchants worldwide

Alibaba has emerged as a Global E-commerce player with its footprints in E-Commerce,
Logistics, Payments, Marketing Services, Cloud computing and meta-market businesses.

Alibaba uses a mix of demographic, Psychographic and behavioral segmentation strategies to

fulfill its mission and transforming its business to emerge as a technologically advanced
company which will help customers, merchants and businesses to leverage the vast potential
of the Internet.

Led by Jack Ma, they started Alibaba.com, a global wholesale marketplace connecting buyers
and sellers. In what was to become a spectacular play, Alibaba.com grew big enough for the
whole world to notice, along with its C2C eCommerce site Taobao, as well as B2C retail site
Tmall. Alibaba.com handles billions of dollars a year in transactions, increasingly acting as a
bridge between mainland China, North America, Europe, and the rest of the world. Alibaba

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follows the supplier aggregator model (much like many B2B marketplaces of the 90s)
working to ease the pain of global sourcing. While Alibaba may be a B2B behemoth, it
wasn’t an easy road to growth. As told to Rebecca Fannin of Inc.com, Jack Ma started his
entrepreneurial journey very young. At 12, he showed foreign tourists around Hangzhou’s
West Lake District, making him more outward thinking and entrepreneurial than most. After
finding himself without a job (including a rejection from a KFC restaurant) by 1992, he
borrowed $2000 to start a company that directly competed with China Telecom. Then, he
ushered in a group of friends and convinced them to part with a collective $60,000 to start the
B2B ecommerce site that was to become Alibaba as we know it today.

Focus Is the Core of the Alibaba B2B Strategy

Alibaba’s meteoric rise can be attributed to its focus on growing its enormous supplier base,
which targets Chinese and other Asian sellers that Amazon and other marketplaces don’t. In
other words, Alibaba’s B2B marketplace has acted like a gateway to China and the growing
economy’s enormous capacity to produce goods that the world wants. To cater to this global
demand, Alibaba does everything it can to build more trust, opening the gates wider to the
world. This is evidenced in initiatives like business verification, factory inspections, and
stringent demands on quality of products.

Easy To Do Business Everywhere

Clearly, Alibaba’s Group mission is to make it easy to do business everywhere. Before this
company came along, sales channels are very inadequate for local SMEs in China. Trade
exhibitions that are conducted to introduce and demonstrate the latest products for more
opportunities were very costly. There are very limited customers that the sales team could
reach out at that moment. However, many SMEs are seeking for business opportunities and
growth since the economic reform of Reform and Open policy that opens up the
investment to foreign country . Therefore, the technology provided by Alibaba has
given SMEs in China huge advantages and benefits. First of all, China has no geographical
constraint that gives China SMEs a huge market of e-commerce. Next, the well set up e-
commerce environment helped the transaction cost to go down sharply. On the other hand,
the e-commerce business platform is also incorporate into the regular business cycle and give
suppliers and buyers more accurate and relevant information that ever before. In a
nutshell, Alibaba’s e-commerce technology has made it so much convenient to SMEs to
conduct their business anywhere in the world efficiently. According to BBC, the total value

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of merchandise sold in Alibaba in 2013 was far more than Amazon and eBay combined.
Alibaba has a clear mission which is to make it easier to do business across the world
because it insists that customers come first, company second and shareholder third. Today,
customer is far more powerful than others .Besides providing free of charge online e-
commerce platform to both clients and consumers, Alibaba also brings in pay-per-click (PPC)
ad campaign in order for suppliers to build their business .By adding up together all the
interested suppliers in various Trade Fair, Alibaba has largely reduced the cost of each
supplier. At the same time, Alibaba also helped evaluate market data for suppliers to
better forecast their own business demand. This allows them to charge a small fee to the
suppliers that are more than willing to pay at a discount price as the need for marketing
and sales from millions of suppliers together. This has made Alibaba successfully in capture
the value shaped to the sellers who are price sensitive but less demanding of the service
quality. Alibaba also argues that developing a good strategy is not easy as we think especially
in such a fast changing world.

Credit Worthiness

Alibaba develop a payment instrument named Alipay in China which contributed a part
of the success of Alibaba. Before the emergence of Alipay, many sellers felt insecure to
ship goods to the buyer due to many reasons until the buyers has clear off the payment.
However, when Alipay has been introduced in Alibaba, this credit system has been very
much lessens the risk of e-transactions and ease buyers and sellers concern upon failure of
delivery or delivery of fake and damaged products. Alibaba has not only introduce Alipay
but also focus very much on the sound evaluation system, in which both sellers and
buyers can give feedbacks and comments on the business transactions that will appear on
each other’s website, hence providing a better and clearer references for their next
business partner. Feedbacks are very important in a business world because it helps to reduce
dishonest business behavior and make transaction more transparent and reliable. Alibaba
online payment is secured with Escrow for international SMEs, which protect the privacy of
the buyers and buyers who are able to pay securely without exposing their personal details.

Branding and Image

When it comes to establishing strong image branding, many China companies face the
same problem as foreigner partners find it hard to remember the name. Jack Ma chose the
name Alibaba firstly because it is easily pronounced and spell in many languages.

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Because of its clear-cut syllables, it helped to raise the brand awareness. Secondly, it is
because of the famous fairy tale named Ali Baba, a character from the movie of “One
Thousand and One Nights” that uses the secret code “Open Sesame” to enter the cave
overflowing with hidden treasures and gold. When it comes to business, it associates to
Alibaba Company that opens a gateway for wealth. The success of Alibaba deciding the
right name for one’s enterprise is important.

Services

Alibaba provide services such as establishing forums, blogs, and user groups at its Alibaba
website to offer a platform for customers to communicate and gather feedbacks according to
their interest. Forums are established at ablibaba.com and taobao.com. This service has made
communication more effective and convenient to all consumers. Alibaba also provides its
clients with communication tools such as Alitalk, Taobao Wangwang, and Yahoo Message
for customers to conduct business discussions at anytime among themselves. Moreover, with
these communication tools, clients are able to get hold of updated information of supply and
demand right away. Users in Alibaba can also communicate with trading partners in real time
via Trade Manager in Alibaba. This platform has made communication two-way and more
genuine to consumers. In addition, Alibaba has different membership package which is
appropriate for each users and the features and services they require.

Revenue and Price Strategy

Alibaba provides free membership from the beginning to attract clients its way to e-trade
market that became the core competency and contributing to more business opportunity in
Alibaba. After a big number of registered clients at Alibaba, it began to charge membership
fees. Alibaba earn profits by two major aspects. The primary revenue came from advertising
fees from Alibaba. The second source of revenue comes from customers for value-added
services, listing fees as well as membership fees. Furthemore, Alipay also began to collect
technical service charge from business transaction that take place outside of Taobao and
Alibaba . Alibaba uses a competition pricing in setting the price of a product in comparison
with its competitors. It uses the price that does not have extreme differences with its
competitors and provides the cheapest prices with good quality to attract its target market.
Due to Alibaba's dominant market position in e-commerce, Alipay has emerged as the online
payment-processing leader in China and it clears 80 million transactions per day, including
45 million transactions through its Alipay Wallet mobile app . Next, Alibaba provides

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products within the same range with different prices depending on the suppliers to offer
buyers a wider choice of variety. Penetration pricing is one of the marketing strategies that
Alibaba implies to set a low price in order to increase sales and market share. Furthermore,
Alibaba also bring into play discount to stimulate the sales as well as retaining their
customers. Discounts are given provided that the customers buy products in bulk or during
festival. Buy one free one is the best method used by suppliers to attract customers. Last but
not least, value-added services are applied whereby product is offered at a cheap price but
services such as shipping, instant delivery, guarantees, warranties and many more are added
up to make sure that the total cost of the products with added services is higher than the
production cost in order to make profit.

Target Market

Alibaba target two marketplaces which include the global marketplace based in English
Language that cater to international exporters and importers and the China marketplaces
whose aim is to focus on suppliers and buyers trading locally in China. China is by far the
largest Internet marketplace in the world with double the size of U.S market. There are 560
million Internet users spending 20 hours a week online. Notably, China is skipping with the
traditional retailing and in favor of the e-retailing . These two marketplaces are
collectively the most- visited B2B website on the Internet. Alibaba also target on small and
medium-sized private enterprises and individual businessmen, which have great potential in
succeeding in the e-trade. In order to get a huge portion of market share, Alibaba has
localized the e-trade services by developing websites that locate to different languages and
modify their design and layouts, which suits the local cultural in overseas. For example,
English website is target to buyers from oversea in general while Chinese website targets
China traders and Japanese website aims at the Japanese market. Alibaba has also creates
Korean and Spanish language website in order to expand its market in different regions
and to achieve highest profit and goals. All these play an important role in Alibaba’s
global success.

Promotion strategy

Alibaba expands its new market through freebies. They offer freebies to attract more clients
and customer to use Alibaba as an online marketing platform. For example, Alisoft is giving
out free copies of Shopkeeper TM, a package that consist of accounting, stock management,
and consumer resource management tools for registered users. The company also promotes

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its services via internet promotion strategy such as public relations, direct marketing, and
discounts for certain items during special days such as festivals, media advertising
and sponsoring of events to attract awareness of Alibaba.

Information Technology

In the e-trading marketplace, Alibaba provides a communication platform for trading partner
to communicate in real time through Alibaba’s TradeManager tool. Alibaba also has a
team of dedicated experts that are always motivated to search for better and innovative
technology platforms to catch up with the changing of the generations. Alibaba is
continuously trying to develop highly complex system to improve the online transaction for
the consumers by setting ample security actions. For example, Trustpass has given online
customers a strong trust and security of online transactions. Moreover, Alibaba also has the
latest technology for anti-fraud and anti-spam that is able to detect any fraudulent activities
and filter unwanted messages. Alibaba’s IT team is constantly working on improving the
accuracy and protection of their customer because customers are their main source of the
entire business.

Expected Market Growth

Alibaba is a “Collective Entrepreneurship” between company and thousands of merchants

that join this network. It offers the platform whereas the merchants provide the products. The
Alibaba model, which relies on profits sharing rather than listing fees has attracted many
merchants to participate in the network. The larger the network is, the greater the benefits for
both company and merchants as it draw a large volume of sale. Likewise, Alibaba has a good
relationship with the Chinese government, which is important in China where government
acts as a gatekeeper of the economy. Alibaba has been chosen by the government as one of
the five companies to enter the Internet banking where banks are owned by the government .
Alibaba has also taken over Yahoo in China and thus Yahoo is the largest shareholder of
Alibaba. The two companies will work together in an exclusive partnership to grow Yahoo
brand in China.

Future Strategic Actions

Alibaba’s future strategic actions include sustaining domestic Chinese market. It is

essential for Alibaba to maintain its domestic market first in order to success globally.

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Without China market, Alibaba would not be able to survive without the economic of scale.
Alibaba is attempting to expand its business in developing countries such as India, which is
the second fastest developing country after China. India has significant potential growth and
profit. Besides that, Alibaba is also enhancing its technology and R&D development for
advance Internet infrastructure to give the fastest speed and accuracy for online marketing.
Meanwhile, Alibaba has been trying to invest in smart phone users. Forrester Research
analyst says that there’s high potential of integrating other services into WeChat because
many people are using it to communicate with friends and family in China. It could develop
into a foremost e-commerce rival in the long run.

Conclusion

In conclusion, Alibaba’s e-commerce marketing strategies have made it so successful in just a

short period that there is no other company that can overtake them at the moment. Planning to
be a company like Alibaba is easy but becoming like Alibaba is another thing. In this study,
we learned very much that the determination of the founder, Jack Ma has profoundly
influenced the success of Alibaba. Jack Ma once said it’s not about the list of privilege but
the story of opportunity that has made him a successful person even though he doesn’t know
much about technology. As one of the China pioneer e-trade service platform, Alibaba has
built a strong connection between SMEs in China and oversea buyers with a boundless
marketplace by providing the high-quality services at a reasonable price with various
business marketing channels and promotions. Alibaba has significantly attracted large base of
consumer with the help of the large population in China. Online business is not new to
everyone since years ago, but Jack Ma has created a miracle that gives China a huge impact
until today, the e-marketing in the 21st century has become the largest online e-trade platform
in the world. However, there are still some improvements for the Chinese e-market in terms
of the protection of intellectual property rights in China and the reinforcement of supervision
over e-transaction are still in a hard nut to crack for the China law enforcement and
authorities. Alibaba may be seen as a successful company, but there are also bumpy roads
that Alibaba has gone through such as cultural clash. When Jack Ma started to hire foreigners
into the company to manage the business, the Western cultural of work producing very
detailed and critical analysis was not suitable in the Chinese market because Internet
entrepreneurs would jump into the market and do it without spending much time in analyzing
it. Without doubt, Alibaba is now the leading international Chinese Internet company.
However, it is still struggling in expanding globally as the major revenue still comes from

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suppliers in China. Alibaba has been trying to make its way internationally because of its
biggest threat, which is Baidu who has announced its plan to compete with Alibaba’s Taobao.
All in all, Jack Ma was just an ordinary person that had a vision, and it was the perseverance
and dedication that raise him into his current position in Alibaba.

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