Alibaba started its operations in 1999 and considered as one of the largest and top firm in e-commerce, which offer business to consumer, consumer to consumer and business to business products and services by its website. Alibaba offers variety of products and services in diverse and broad ranges which include machinery, consumer electronics, textiles, agriculture, beauty and health. Alibaba is employing 10,000 employees currently in the company. Its main competitors are Flipkart which has more than 10,000 employees, Amazon which has more than 300,000 employees and Walmart which employee more than one million people (Alibaba, 2017).
Alibaba is the biggest name in the e-commerce industry in China, and it is able to gain a competitive advantage because of its location. China is considered to have largest market of Internet users, of about 560 million people who spend 20 hours every week on internet, it is twice as the size of United States market. And China is also involve in skipping all the traditional retailing in e-tailing’s favor. It brought a great opportunity for all Internet retailers, mostly for the early movers, such as Alibaba, who is gaining the advantage by every seconds of minutes. China is jumping directly on wireless communication, and Alibaba is able to provide all the services and products through e-commerce (Tan, Pan, Lu, and Huang, 2009).
Alibaba is also having a competitive advantage of economies of scale, it can save its costs which are associated with all the offerings for the sale of multiple and different goods by single corporation from same channels of sales. Alibaba is having two sites of retailing – Tmall features all the branded products and Taobao features all non-branded products, mostly from small merchants. The products offer in Taobao is amazing and mostly people shop from it because of large variety (Qing, 2008).
It is also taking advantage from its operations on large scale, which is cost saving because of large volume of buying and selling products. It has been observed that Tmall and Taobao accounts for over half of the deliveries of parcel in all over China. In 2012, the combine transaction is more than one trillion Yuan which is more than eBay and Amazon. It has the strongest networking which benefits arises by expanding the users’ network of goods and services. Larger and stronger the network is, the more valuable its product will be for the users. It is the type of collective entrepreneurship among many merchants and company which join networks. Merchants provide goods and Alibaba provide them a platform for selling their products (Mourdoukoutas, 2014).
Alibaba is also gaining a competitive advantage in the area of political factors by maintain the good relations with the government of China. Because government in China act as a gatekeeper of an economy who will decide about the operations of the businesses and their durations. Among the top five companies, Alibaba was one of them who has provided by the government, an opportunity for entering in Internet Banking (Qing, 2008).
References
Alibaba, 2017. About us. [Online], Available at: https://www.alibaba.com/showroom/alibaba-china.html, [Accessed on: 18th December, 2017].
Mourdoukoutas, P. 2014. Five advantages of Alibaba. [Online], Available at: https://www.forbes.com/sites/panosmourdoukoutas/2014/04/15/alibabas-five-advantages/#248585f870a6, [Accessed on: 18th December, 2017].
Tan, B., Pan, S.L., Lu, X. and Huang, L., 2009. Leveraging digital business ecosystems for enterprise agility: The tri-logic development strategy of Alibaba. com. ICIS 2009 Proceedings, p.171.
Qing, H., 2008, December. A model for value-added e-market provisioning: Case Study from Alibaba. com. In Future Generation Communication and Networking Symposia, 2008. FGCNS’08. Second International Conference on (Vol. 1, pp. 47-52). IEEE.