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Connecting China To The World

April 3, 2012

Alibaba.com is one innovative company that has been able to leverage internet technology to create marketplaces for small businesses in China and around the world to do business.

China is a manufacturing goliath. More recently the world has come to know that many of the things sold by well-known brand companies may be designed somewhere else but it’s manufactured in China. This can be as low-end as baseball caps to more technologically sophisticated items like iPhones.

Whether it’s domestic or international trade, the challenge has been how to connect people who have something to those who want to buy something. It may be direct producer to consumer or one business entity to another transaction.  For large companies they may have the established connections already or can do it through their banks and other means. For small companies it may be a little more difficult.

Alibaba. com is a company that has successfully leveraged the technology of the internet to connect small businesses to one another, sometimes known as B2B. It has segmented its business in three areas:   for exporters and importers there is a global platform (www.alibaba.com); for domestic Chinese trade there is a Chinese platform (www.1688.com); and for smaller buyers looking for quick shipment of small number of goods, there is a global transaction-based wholesale platform (www.aliexpress.com).

This company was established in 1999, in Hangzhou, China. The company states that it now has around 76.3 million users in 240 countries and regions.  These numbers shows that it has helped shape a new way of doing business over the internet. The markets have agreed with Alibaba.com’s business model and success.  In 2007, it held its IPO in the Hong Kong Stock Exchange raising $1.7 billion. It was the 2nd largest IPO for an internet company at that time after Google’s 2004, IPO.

Alibaba.com is the flagship company of the Alibaba Group which is 40% owned by Yahoo!. Yahoo has been struggling as of late and the Alibaba Group is in the process of buying itself out of Yahoo!. It is now clearly one of the big boys in the internet industry.

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