What is the Success Secret of Alibaba Company?

The Alibaba Company is the brainchild of Jack Ma. He originally started this company in his apartment in 1999 and was launched the same year. After which, its market share on the online market has continued to skyrocket. One can often wonder what the success secret of Alibaba Company is. Below, we highlight a few factors that have led to the company being the number one online retail market in China and beyond.

1. Unique business approach

The Alibaba Company provides services mainly to small businesses and people. The company identified an opportunity and need among consumers, thus offering consumers diversified choices. The site offers a variety of consumer goods that one can select. This is one way of ensuring that a person can get anything they want without going to another site. This top success secret has led to Alibaba having over 230 million active users.

2. Benefits from the profits

The main aim of any business is acquiring profits. The Alibaba Company charges marketing services and technical support. Alibaba Company uses advertisements and keyword bidding to earn profits. This alone represents 57% of the total profits. Another source of profit is big data. Profits contribute to the success of the Alibaba Company.

3. Attracting sellers by eliminating a listing fee

The company has gained a vast and robust market share. In order to lure more sellers to their platform, Alibaba has eliminated any intermediate fee. Alibaba allows sellers to register for free. This has resulted in attracting more buyers to the platform to check out what sellers have to offer.  Currently, the site has more than 500 million users who conduct their business. The annual orders exceed 11 billion.

4. Great customer support system

Most online companies make sure they have a great customer support system to stay relevant. The Alibaba Company hasn’t been left behind. In fact, this is one of their success secrets. It provides buyers with an opportunity to review sellers. This saves time for other buyers while purchasing items and in the decision-making process. The site also awards clients coupons for leaving reviews, thus more reviews equal more coupons. This is a way of enticing buyers to comment more and buy more via the site.

5. Trustworthy transaction system

Online transactions are tricky. Some sites consist of scammers. However, Alibaba has ensured that both buyers and sellers get the real deal. Sellers are required to pass an online certification trust to verify their identity information. This has reduced illegal transactions. Sellers are supervised constantly.  

Alibaba ensures that records of transactions can be traced back to both seller and buyer. This ensures there is legitimacy in each transaction. Thus, buyers are able to choose reliable sellers and carry out a trustworthy deal.

6. Effective payment system

The Alibaba platform ensures that payment is transferred through Alipay. It’s only to be released when the buyer has received the products in good condition. This is a chance to cut the chances of being duped into a fake product. This method has ensured that Alibaba continues to thrive in the e-commerce industry.

7. Improved stock performance

The Alibaba Company stock performance has continued to improve over the years. As of 2018, the company has recorded revenue of 250.3 billion Yuan, which translates to 39.9 billion US dollars. Alibaba stock predictions show that the company will continue cornering the market after Amazon’s departure from China. Alibaba has major investments in cloud computing and a Netflix type of video streaming. Alibaba stock predictions indicate future growth to be through the roof.

8. Sophisticated transaction patterns

The Alibaba Company has new and advanced transaction patterns compared to traditional patterns. This creates value for customers depending on their needs. The transaction patterns include:

Consumer to a business pattern – Here, the supply chain is made short and the time required for product turnover is minimal. This increases the clients’ satisfaction. The company gathers scattered customers who have common needs to form a purchasing group that can buy products at wholesale.

Alibaba focuses on online clients behavior via the data they collect and develop products suited to consumer habits.

Online-to-offline transaction pattern – This is a situation where a client can buy a product by scanning a two-dimensional code and indicate receipt with another code.

To speed online-to-offline services, the company employs the use of mobile terminal domains through the Alipay Wallet. The company partners with banks to offer code scanning and cash transfer for payment

These two transaction service systems have contributed to the success of Alibaba.  

Conclusion

The success of Alibaba Company didn’t happen overnight. Sacrifice and strategic planning played a major role. By looking at its success secrets, one is motivated to apply the skills to their business. With time, a person can grow their small online shop to the largest online retail within their region.