- Introduction
September 10, 2019 is the 20th anniversary of the founding of Alibaba. At the close on September 9, Alibaba’s market value was fixed at 462.863 billion U.S. dollars, steadily ranking among the top ten in the world, and being the highest Chinese company by market value. (Du, 2018). So successful Alibaba cannot do without its operating model. The Alibaba Group covers many areas, such as: Taobao, Tmall, JuChu, Alibaba Software, Taohua, Yahoo China. At the same time, it also acquired American e-commerce SaaS provider Vendio Services and Gaode UC, which has the largest digital business model in the world. This article focuses on assessing the tremendous contribution that Alibaba has made under the digital business model. We all know that Alibaba cannot operate without Taobao. Taobao is very familiar to every Chinese. However, how the digital business model creates the Alibaba Group is unknown to us. In the era of digital commerce, Alibaba is the wave of the digital economy, a sample of the development of Chinese enterprises. From an e-commerce company to a digital economy spanning the fields of commerce, finance, logistics, cloud computing, etc., the digital economy model has changed Alibaba tremendously in the past two decades.
2. Content
Alibaba Group has a lot of its own business, and there are many related companies to support the business. In 2003, Alibaba began preparations for the establishment of Taobao.com. Alibaba started with B2B (business-to-business) business, while Taobao is a C2C (person-to-person) model. (Dan, 2019) When the digital economy model was not yet the mainstream of the world’s development, Taobao was launched in May 2003 as the main online retail and commercial area of the Alibaba Group’s Asia-Pacific region. The third-party payment tool “Alipay” was launched in October, enabling consumers to transact online and Taobao through the “guaranteed transaction model.” (Aashish, 2019). After Taobao’s online shopping became more and more popular, physical store shopping was gradually replaced, and more and more digital business models contributed to Alibaba Group. First, when customers shop on Taobao, Alibaba Group can automatically recommend other products that customers may like, need and afford. Customers’ browsing history and purchase records can be analyzed specifically by Alibaba through the Internet and even external networks. Therefore, Alibaba’s promotion of precision marketing is to recommend products that customers may like, which is also one of the contributions of “digital digital business model” to Alibaba. This has, to a certain extent, increased consumer purchase rates and greatly increased Alibaba’s turnover. Second, “decentralization” is also the biggest advantage of the digital economy model block chain! When Alibaba started to launch decentralized digital business model QR code payment, Alibaba’s Alipay shopping quickly became the mainstream consumer payment tool in China. Customers only need to scan the QR code to have their favorite items. There is no need to bring cash, and a mobile phone can go out or travel. Consumers can now buy essentials at home. The promotion of Alipay allows consumers to buy anytime, anywhere. Mobile payment can more specifically use big data to track customer information and make reasonable improvements to its products based on this information. You can also develop corresponding marketing activities through the analysis of these big data. Finally, Alibaba proposed intelligent logistics, which is artificial intelligence for the digital economy model. Parcels can now be sorted automatically. They enter and leave the warehouse by themselves. No one needs to drive a vehicle. They can also use drones to other distribution locations and use smart express cabinets to pick up goods. These are controlled by warehouse robots. The “smart, unmanned, one-stop” logistics model of the digital business model has greatly helped save talent costs and optimize talent utilization. The big wave of digital business models is accelerating across every corner of every industry, reshaping business, and changing society. Innovative digital business models such as big data, cloud computing and mobile internet have all contributed to the success of the Alibaba Group. Thanks to Alibaba’s pioneering work, the digitalization of Chinese consumers can be said to have led the world. Alibaba has formed a commercial operating system, and it is also a digital business model system. Alibaba’s commercial operating system is designed to make it easier and more efficient for businesses to do business in the digital economy. “
3. Conclusion
The digital business model has helped Alibaba gradually create miracles in the history of world enterprise development. The digital economic model has brought great changes to human beings. Alibaba Group no longer chooses to shop in physical stores. The changes in payment methods brought by online shopping are all digital economic models, which is a testimony of the success of Alibaba Group. (Ming, 2018) All major decisions in Ali’s history have nothing to do with money and have to do with the concept of business model. It is precisely because of this unique model that drives the development of Alibaba and provides more references for the development of enterprises in the digital economy era.
4. Reference
Du, M. (2018).What is digital commerce.Brighton:Havard Business articles Journal.
Dan, B. (2019). Understanding the Alibaba Business Model. Retrieved from: https://www.investopedia.com/articles/investing/062315/understanding-alibabas-business-model.asp
Aashish, P. (2019). Alibaba Business Model | How Does Alibaba Make Money? Retrieved from: https://www.feedough.com/alibaba-business-model-how-does-alibaba-make-money/
Ming, Z. (2018). Alibaba and the Future of Business.Retrieved from:https://hbr.org/2018/09/alibaba-and-the-future-of-business
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