Alibaba beyond Alibaba.com
Alibaba beyond Alibaba.com
We don’t need to be merchants or importers in order to know that Alibaba has become a worldwide dominant agent in the e-commerce industry. Despite operating differently to other companies involved in this business sector, is not surprising to hear that Alibaba’s empire has overtaken in multiple aspects some of the biggest players in the market, such as Wal-Mart, Amazon, eBay, etc. But, what is behind all this success?
Have you ever heard of “Aliexpress”, “Taobao”, “Tmall”, “1688” and “Juhuasuan”? Did you know that Alibaba does not only runs in the track of e-commerce but also in many other business areas like financial services, innovation, cloud computing, logistics, digital media and entertainment?
If you want to know more about it, we invite you to keep reading to become familiar with some of the companies integrating the great empire of Alibaba.
Alibaba Group (Alibaba Group Holding Limited) is a company comprising more than 10 enterprises, with the purpose of empowering businesses to transform their operations through fundamental technological infrastructure and market reach, helping them to leverage the power of Internet to effectively engage their users and consumers.
Among the various Alibaba’s affiliates, there are mainly five companies operating as e-commerce platforms. Alibaba.com, which most of us know as the website connecting buyers from all over the world with Chinese manufacturers and suppliers for importing all kinds of products, is only one of them. This one is focused on wholesale global trade, thus it serves as a B2B (business to business) marketplace. Nonetheless, there are others which are also devoted to online trade, but through different modalities, which in some cases may result more convenient, depending on our primary goal. Below you will find and introduction to each of these companies and the main features making a difference among them:
- ALIEXPRESS: It is the retail version of alibaba.com. The core activity of this company is basically the same of alibaba.com, except that this one is focused on retail global trade, serving as a B2C (business to consumer) marketplace; hence, it can be a better option when we are buying certain product for our own use or personal consume, or when we only want to buy few pieces or units; because this platform does not require to comply with MOQ’s (Minimum Order Quantity), and it still offers the possibility of shopping directly from the manufacturers or suppliers, giving us access to very attractive prices.
Both alibaba.com and aliexpress.com, are websites available in English, and allow to see the prices in US dollars, make contact with the suppliers in English, use payment methods from all over the world, and arrange shipments to any country.
- TAOBAO: This company conducts a website that, beyond e-commerce, serves as a social and commercial platform allowing users to enjoy a much more personalized and optimized shopping experience by applying big-data analytics. One of its main features is that it is focused on C2C (consumer to consumer) commerce, thus any user can sell one or more products to other users in the platform, without needing to have a registered company or brand.
Taobao has been catalogued as China’s largest mobile commerce destination, since it has been specially developed for the interaction and shopping through mobile devices.
Most of the merchants in Taobao are local individuals and small businesses from China (initially the service was only available for residents in Mainland China, later it also became available for users in Hong Kong, Macau and Taiwan). Unlike Alibaba.com and Aliexpress.com, Taobao.com is addressed exclusively to the Chinese market, since the site only displays its content in Chinese, prices are only shown in yuan, payments can only come out from China, and shipments can only be arranged locally. However, there are many ways to shop in Taobao, even if you don’t understand Chinese and despite residing out of China, considering that a lot of companies offer intermediation services for that purpose. Small merchants abroad wishing to sell their products in Taobao can do it through Taobao Global, being a modality that allow foreign sellers to list their products in the platform, even if they don’t have operations or residence in China.
- TMALL: Is the Alibaba Group platform designed for retail sales of branded products. Unlike Taobao that mainly conducts sales of products supplied by individuals or non-registered small businesses, Tmall only handles products from medium to big size formal companies, especially from local and international recognized brands already holding certain market positioning (such as Disney, Vans, Adidas, Gap, Samsung, Nokia, Maserati, Ray-Ban, Mango, Skechers, P&G, Langsha, etc.); and also offers a premium shopping experience, considering that the requirements to become a supplier are much more higher compared to those of the other platforms studied in this article, and that sellers must additionally pay a security deposit, an annual fee and a commission over sales.
As we saw it for Taobao, Tmall is also addressed exclusively to the Chinese market, so its content is only available in Chinese, its prices only in yuan, and the payments and shipments are limited to the Chinese territory; however, there is always the alternative of shopping through the agencies referred above, being a good way of buying branded or luxury products at reasonable and lower prices compared to those of the mall stores. Tmall also offers Tmall Global, through which foreign companies may sell their products, even if their stock and operations are located abroad, as long as they comply with certain requirements.
- 1688: This platform is probably the less known in the occidental world and one of the most interesting, since it is actually the business source of many of the suppliers earning money in the other e-commerce sites of Alibaba Group. 1688 is the equivalent of Alibaba.com applied exclusively to the Chinese territory, inasmuch as it serves as the first wholesale distribution channel through which the producers of raw material and manufacturers sell to other manufacturers, suppliers and merchants in China, thus this is the marketplace where it is possible to buy raw material or merchandise at the lowest prices, due to the absence of subsequent intermediaries.
Due to the above, many of the suppliers at Alibaba, Aliexpress, Taobao and Tmall, are buyers at 1688, being this platform, in many cases, the marketplace for the first sale of thousands of products and raw materials being afterwards resold all over the world.
- JUHUASUAN: This website is no longer an independent company of Alibaba Group, since in 2016 it was merged with Tmall, through which it currently operates. It is also an e-commerce platform, but only for flash sales and group shopping. Juhuasuan was created as a tool to help Taobao and Tmall merchants to get better results by launching special offers and daily deals to get consumers attention in a faster and more effective way, allowing them to introduce new products, spread trends and encourage certain shopping behavior. In short, we can say that Juhuasuan is the Chinese version of Groupon.
- LAZADA: Unlike all the businesses above mentioned, this enterprise was not founded by Alibaba Group. Lazada is a German e-commerce company, however, around 83% of its total stock is currently owned by Alibaba Group Holding Limited, and it has become Southeast Asia’s number one retail e-commerce website, having presence in Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.
Something interesting for the occidental world, is that Lazada also has an office in Hong Kong as a mean to offer merchants from all over the world the possibility of selling their products directly to an estimate of 550 million consumers in all the Southeast Asia region.
The above lines are only a close-up to the main e-commerce platforms run by Alibaba Group. There is still a lot to learn about the multiple companies of the group in other industries and about the incredible business model that it has built; we hope to go deeper on that topic in the next opportunity.
By Alejandra Rivas Silva
Bc2.mx – Editorial coordinator and analyst
September 1°, 2017.