We come across several E-commerce websites in day to day life. The rate of online market and its buyers and sellers has increased to another level. The major problem that arises for online marketing is pricing the product that you are selling.
Whereas Amazon is housed under one roof, Alibaba is divided into three core businesses: Alibaba, Taobao, and Tmall. It is a business-to-business trading platformconnecting manufacturers from countries such as China, India, Pakistan, the United States, and Thailand with international buyers.
Merchants can list their products for free on Alibaba. Launched inTaobao lists hundreds of millions of products and services from millions of sellers.
Taobao doesn't charge transaction fees and the site is free to join for merchants, a policy which helped the site gain its enormous user base in China. Merchants have the option to buy advertising and other services to help them stand out on the website and boost sales.
Advertisers can choose between pay-for-performance and display marketing. Warehouses Unlike Amazon, Alibaba Group holds no inventory and owns no warehouses. Rather, Alibaba has created software platforms that facilitate the exchange of goods and services.
While Alibaba's revenues are less than Amazon's, it has higher operating margins and profit margins. The reason for this is largely that Amazon has to manage the expensive and complex logistics of developing and maintaining a network of warehouses to ship products directly to shoppers.
In short, software is easier to scale than warehouses. Alibaba actually blocks Baidu's spider from indexing both Taobao and Tmall, meaning that pages from these websites do not appear in Baidu's search results.
Consequently, shoppers must go directly to Taobao and Tmall in order to see what they have to offer. This, in turn, increases the value of search on Taobao and Tmall.
When a customer does a search on Taobao and Tmall, ads from merchants appear alongside search results. Alibaba Group's Ecosystem In addition to its leading e-commerce portals Alibaba Group created an ecosystem of companies to compliment them: It provides payments and escrow services for transactions on Alibaba Group platforms.
Alibaba Group spun off Alipay in Alimama Launched in NovemberAlimama is an online marketing platform that provides sellers on Alibaba Group's marketplaces a range of marketing and advertising services.
China Smart Logistics China Smart Logistics is a proprietary platform that provides real-time access to information for both buyers and sellers with a view to improving the efficiency of e-commerce package deliveries. The Bottom Line Despite Alibaba's wide-ranging investments, its core business remains centered on e-commerce.
Its business model has combined elements of many of the leading technology companies in the US rather than mirroring any one business in particular. Get a free 10 week email series that will teach you how to start investing.
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