Led by Jack Ma, the Alibaba Group was established in Hangzhou in 1999 by 18 people. The company’s founders promoted a belief that the Internet would level the playing field by enabling small enterprises to utilize innovation and technology to grow and compete more efficiently in the local and global economies. Several years after its founding, a number of investors including SoftBank were attracted by the growth of the Alibaba Group and began injecting capital. Large funds from these investors were used to develop other companies under the Alibaba Group.

Business Growth
Innovations and ideas from Alibaba were not always fully supported. When Jack Ma wanted to set up his own online payment system, which is now known as AliPay, many people doubted and ridiculed him. However, Jack Ma’s enthusiasm and optimism are exemplary. He finally proved that his online payment business can be successful, and it has since become one of the biggest payment platforms in the world. In 2016, AliPay became the most frequently used payment platform in China. Alibaba Achieved its success through effective marketing strategies (segmentation, targeting, and positioning) augmented by creative marketing tactics such as product development, pricing, distribution, and marketing communications. Through these activities, Alibaba has won a long-term relationship with its suppliers and buyers, which is beneficial to the company. Not stopping there, Alibaba continues to innovate to capture opportunities that arise from technological developments and changes in customers’ behaviour. Interestingly, Alibaba did not only focus on online businesses, but it also began to make acquisitions of conventional retailers. Alibaba realised that now the company must be able to provide integrated experiences for customers, both online and offline.

Omnichannel Marketing Strategy
The group’s e-commerce business continues to show significant growth. The dynamic changes in public spending also pose a challenge to retail entrepreneurs. Many breakthroughs are made by companies. One of these is conducting online-to-offline (O2O) marketing. This means retail entrepreneurs use online channels to encourage consumers to go to offline channels. However, this method poses many challenges, including a difficult-to-track on investment of channels, rising costs, and disjointed customer experience. Meanwhile, businesses that only focus on online strategy also face tough challenges in the future. Jack Ma, said, “In the future, pure e-commerce will be reduced to a traditional business and replaced by a new concept of retail- the integration of online, offline, logistics ad data across a single value chain”.

One of Jack Ma’s innovations to deal with this problem is to use omnichannel marketing in the Alibaba Group. The difference between O2O and omnichannel marketing is that O2O only focuses on marketing, whereas omnichannel marketing covers a broader spectrum of marketing and operational processes, including promotion, channels of distribution, and customer service and fulfilment. Omnichannel strategies are intended to improve operational efficiency, customer experience, and overall profitability. One of the trends is “new retail”, namely the increasing maturity of businesses in using data analytics and omnichannel technologies to create a seamless consumer journey between online and offline channels.

One example of the application of “new retail” in Alibaba is the integration of offline loyalty programs with Tmall, which allows customers to claim benefits wherever they shop and enables brands to capture end-to-end consumer data. Another activity carried out by the Alibaba Group to realise Jack Ma’s hopes for the “new retail” model is the aggressive acquisition spree of numerous types of traditional Chinese retailers., including Bailian Group (the largest brick-and-mortar retailer by store numbers in China), Sun Art Retail Group (china’s top hypermart operator), Yintai Group (high-end retailer), Suning Commercial Group (Electronics retailer), and Hema Xiansheng (high-tech supermarket).

With these acquisitions, Alibaba offers a new shopping experience to its customers. For example, consumers who shop at Hema Xiansheng can make purchases directly in the store using the mobile app. Henceforth, the items will be sent within 2 hours. Various forms of this kind of convenience are offered to consumers to make them more loyal to the company. To maintain its excellence in the digital era, various innovations need to be continued by the company, notably by integrating online and offline initiatives.

Questions: 

Identify and explain the FIVE (5) value-added functions performed by Alibaba to their customers

Discuss ANY TWO (2) brand positioning strategies that Alibaba used in creating brand loyalty. Give justifications in your explanation.

Answer rating: 100% (QA)

ValueAdded Functions by Alibaba 1 Ecommerce Platform Alibaba provides a robust ecommerce platform where customers can access a wide range of products and services This platform connects buyers and sel... View the full answer