Why Promoting Online in a Global Electronic Marketplace Is a Successful Strategy for Small and Medium Sized Enterprises: The Alibaba Group Holding Business Model

Abstract

Alibaba Group is the world biggest global electronic marketplace(GEM) in relation tousers and the main Chinese e-Commerce company operating in B2B. It offers a virtual marketplace and connects medium and small size enterprises (SMEs) in China and around the world. Before the company came along, B2B electronic markets in China were not developed. Some obstacles prevent the company to grow. Business structures were very costly and inadequate for local SME in China, the corporate culture did not promote the innovation of IT and trust and confidence were obstacles to the promotion of e-business in China. Equally, since 1990 the population of internet has raised thanks to ITC. The Chinese economic Reform and the new policy increased foreign direct investments. E-Business was an opportunity to have success. In this scenery, Alibaba looked the necessities of the SMEs and supported them to compete domestically and globally. In this paper, we firstly analyze Alibaba’s development and its Business model. Next, I will show through a qualitative research method, the factors of Alibaba’s success over time and its main business strategies.