Alibaba, the largest online B to B trading platform

I) Evolution of the Alibaba platform

Launched in 1999, Alibaba.com, a B2B (business to business) platform, is Jack ma first e-commerce product.

Originally it was a platform connecting foreign companies with Chinese manufacturers, at a time when China was primarily a manufacturing country.

Today, Alibaba is mostly considered a consumer e-commerce giant, with a market capitalization of about $480 billion.

Subsequently, the platform developed the Ant Financial interface, which allowed it a stint in global financial services. Ant Financial was recently valued at $150 billion.

Alibaba has also moved into entertainment, along with Alibaba Pictures.

Now, designers are focusing on “new retail.” The new retail trade, in theory, could increase online retailing from 20 to 25% of Chinese retail ings to 30-50%.

 

II) Where is Alibaba today?

Alibaba.com recently announced a new partnership with Office Depot in the United States.

Also, management has traveled the world, meeting with governments and trade organizations.

Today, the new idea of the platform is the digitalization and democratization of world trade.

Indeed, Alibaba seeks to attract more foreign traders to its B2C platforms (which concern transactions between companies and buyers) by developing e-commerce that will digitize and democratize global trade.

 

III) Roles of different platforms

Alibaba is in the field of digital platforms. The platform allows for the formation of markets with data technology tools that empower and connect user groups.

Thus, merchants and consumers are connected with Taobao.

They connect content creators and viewers with Youku.

They connect manufacturers and retailers with Alibaba.com. It’s about connecting different groups of users and, in general, the more users and activities there are on a platform, the more valuable it becomes. The value of a platform increases directly through transactions and indirectly through data produced and new use cases discovered.

 

IV) Transactions on platforms

Platforms are primarily aimed at reducing transaction costs. And generally, the best market platforms connect differentiated small sellers to small buyers in fragmented markets.

So you can see companies like Meituan allowing transactions between Chinese consumers and local restaurants.

Upwork allows transactions between small businesses and international freelancers (paid journalists). Trulio, a real estate market, allows transactions between individual buyers and individual real estate brokers.

Could a platform digitize and democratize world trade?

This is the great opportunity Alibaba.com’re going to be looking for. The goal is to build a platform that reduces transaction costs among all SMEs in the world.

This is an excellent strategy, knowing that much of world trade is now carried out by large companies with large distributors and supply chains. They are the only ones who can overcome cross-border transaction costs.

 

Conclusion:

Alibaba is now the world’s largest online B2B trading platform. It now allows companies to develop their business locally and internationally with ever more interesting ideas such as reduced transaction costs.

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