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Alibaba 's Dominant Business Model Essay

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Alibaba’s dominant business model is an exchange. Piccoli, in his textbook, defines exchanges as “Exchanges are organizations that create a marketplace for buyers and sellers to come together and transact. Thus, an exchange does not take control of inventory or worry about fulfillment. Rather the exchange provides a “market making” service and is compensated with fees, commission on sales, or consulting fees on more complex business-to-business transactions. The prototypical example of an exchange is eBay. Others include Alibaba.com and Ariba—both mainly targeting the business-to-business domain.” (Piccoli, pg 170)
Principally, Alibaba is a Chinese business to business e-commerce company. Alibaba focuses on suppliers and buyers trading both domestically and internationally. The business to business marketplaces provide a platform to facilitate e-commerce between business sellers, whom Alibaba refers to as “suppliers”, and wholesale buyers. Suppliers and buyers would use the marketplaces to establish their presence online, identify potential trading partners and conduct business with each other. Suppliers and some buyers would use the marketplaces to host their company profiles and catalogs in standardized formats known as “storefronts” and post “listings” such as products, services and trade leads. Users could view storefronts and listings in over 30 industry categories and nearly 5,000 product categories by either searching for keywords or browse through the

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