Alibaba Group

Impact of Alibaba.com On The Value Chain And Trade Barriers Effect On This Website

Introduction

The basic tool for understanding the influence of information technology on companies is the value chain — the set of activities through which a product or service is created and delivered to customers. When a company competes in any industry, it performs a number of discrete but interconnected value-creating activities, such as operating a sales force, fabricating a component, or delivering products, and these activities have points of connection with the activities of suppliers, channels, and customers. The value chain is a framework for identifying all these activities and analyzing how they affect both a company's costs and the value delivered to buyers (Lei, 2007).

Alibaba Group is a private organization by Hangzhou based family who owns businesses based on internet which is inclusive of online market places for the facilitation of domestic Chinese trade and business-to-business international trade. It also includes payment and retail platforms along with data-centric cloud computing services and shopping search engines.

The Alibaba Group also operates through its affiliated entities. It operates in more than 70 cities, employing more than 22,000 employees. The region of Alibaba group operating includes Japan, China, Taiwan, Hong Kong, the United Kingdom, India, Jack Ma, and the United States. The first commercial website was launched in China by the founder of Alibaba. This term paper aims to discuss the trade barriers of Alibaba.com and how it has created its value chain in the marketplace (Fan, 2008).

As mentioned above, Alibaba was founded in Hangzhou which is eastern China. The website has four marketplaces altogether. Alibaba.com used English language since its origin which helps the website and the company to bring the exporters and importers together from around more than 240 regions and countries. The marketplace of China is specifically designed for the domestic business-to-business trade. Alibaba.com also has Japanese marketplace which mainly aims for the trade facilitation and even from the associated company of Japan as well. Alibaba.com has also offered its consumers with a transaction-based wholesale platform known as AliExpress. This platform allows the users to purchase goods in small quantities on the wholesale rates. According to the company, the total number of the registered users accounts to be 65 million people (Fu & Guo, 2008).

The company was founded by Jack Ma (Jack Ma) in 1999 with 17 companions in the city of Hangzhou, where he was registered with the website Alibaba.com. From the beginning, Alibaba considered as a platform for trading of small and medium-sized enterprises, as well as a network of online sales. In November 2007, has been exhibited in Hong Kong.

Alibaba Group operates five subsidiaries:

Alibaba.com - Public trading company (the company whose shares and securities are admitted for free trade on stock exchanges, that is publicly traded on the stock market), the main activity of which is an online B2B trade

Taobao.com - the online retail market, an online shop and online auction

Alipay - platform for online electronic payments

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