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20 Facts You Didn't Know About Alibaba's Business

Jack Ma

Alibaba is the Chinese version of Amazon in the opinions of many. The last year brought in an increase of 56% in the company's revenue for the last quarter. Shares are trading at an astronomical level and the e-commerce wonder has made headlines in financial circles across the globe. A little research shows that there is much more to Alibaba than being a ridiculously successful e-commerce business. Here are 20 facts that you didn't know about Alibaba.

Alibaba extends into the high tech warehousing and shipping industry

Many people know that Alibaba is a large and powerful e-commerce retail company that originated in the country of China, but few are aware that they are also part owner of a delivery logistics company. They own 47% of the stock in a logistics affiliate named Cainiao. The company has only been in existence since 2013, and is a valuable resource for Alibaba because its main thrust is in the connection of merchants with warehouses and delivery partners for the fast delivery of goods and services.The Cainiao company utilizes smart robots within their intelligent warehouse for the handling of packages that weigh up to 500 kg.

Alibaba is courting small businesses in the US

The Chinese super-giant is encouraging United States based small businesses to begin selling their products through the Alibaba platforms. They are currently working on deals that would make it profitable for both small businesses and the company. This has the potential for increasing sales for the businesses as well as creating new jobs. Alibaba would see yet another spurt of growth as the selection of goods available on their e-commerce site would become more diversified. It would be a win-win situation for everybody involved, including the customers who would have a broader selection of goods to choose from. Selling products on the site would benefit US businesses by giving them a platform for offering their goods to a new population of 1.4 billion potential customers in China.

Alibaba is changing the way department stores and grocery stores in China operate

The large corporation is so much more than an e-commerce platform offering Amazon-like services. Alibaba is involved in bricks and mortar operations as well. The company has a 32% interest in Sanjiang Shopping Club Ltd, and in addition, an 18% interest in the Lianhua Supermarket chain. The companies are influenced by Alibaba and have been updating their checkout processes in ways that streamline them adding greater efficiency and convenience for both customer and the businesses in China. 85% of sales revenue in China come from these brick and mortar establishments with just 15% arising from online sales. Just a little research shows that the company is heavily involved in commercial activities that go far beyond what is apparent to most customers.

Alibaba is the founder of the Hema Supermarket chain

The massive corporation set out to show the world that technology has its place in the supermarket sector of the sales industry. The world around us is changing rapidly with customer demand for higher efficiency and greater shopping convenience. Alibaba launched Hema supermarket in 2015. If their intent was to conduct an experiment, it is a highly successful one. The company has infused the latest technology to create the ultimate shopping experience for Hema customers. The proof of their success is seen in the statistics that show that when compared to more traditional supermarkets, per unit sales are between 3 and 5 times higher at Hema stores.

Alibaba is surging ahead of Amazon in growth

When compared with the US based Amazon, Alibaba's Taobao platform is reaching higher percentages in revenue growth. The latest figures show that while Amazon has seen a 25% increase in revenue over the past year, Alibaba's has soared to a 56% growth rate. This could be directly related to the higher population within the country as there are 4.1 billion online shoppers within China who are taking advantage of the convenience that the platform offers them for shopping and other services.

Alibaba is catching the tech wave

Careful analysis of customer preferences and market demand are a few of the strategies that Alibaba execs are employing to give customers a fully rounded experience. In addition to offering a range of products for sale, they also offer services that keep online shoppers on the site for longer periods of time. The longer people stay on the site, the more money they will spend. In a brilliant move, the company has adapted the Taobao Marketplace platform to include a highly functioning miniaturized social platform that mobile users can easily access. Alibaba offers product review sections where customers share their experiences and opinions, along with live streams and webisodes that are dedicated to topics such as cooking tutorials and the application of makeup, among others. This creates an additional draw that keeps people on the site longer, and actively engages them. The Mobile App Use for Alibaba has gone from reaching 507 million last summer to more than 529 million, which is an increase of 22 million users in a little over a half of a year.

The company is being investigated by the SEC

The Securities and Exchange Commission has been conducting an ongoing investigation of the company. With great success, also comes questions about a businesses accounting practices. This doesn't necessarily mean that Alibaba has done anything wrong, but their success rate has been so high that the SEC is obligated to conduct an inspection to ensure that the figures coming out of the company are accurate. When asked about the investigation, analysts don't see it as a big deal. More than questioning the legitimacy of the claims or the honesty and integrity of the company, the SEC simply wants to understand the business model under which the company operates. This could actually be viewed as a compliment under certain conditions. Any time a company soars to such unbelievable heights of success there are questions about how they accomplished this feat. There is also speculation that the model that the company is using could be replicated in other sectors of business. There is always a potential for discovery of new systems that could be beneficial for others. What is spurring the tremendous growth and is the model transferable? What can we learn from Alibaba? They could be onto a few ideas with the potential for revolutionizing the e-commerce industry.

Alibaba tried to hide the fact that they were Chinese

In the early days of the company, Alibaba staff who were excited about getting the new platform off the ground, solicited to customers throughout the world. They sent out emails to Americans whom they viewed as potential customers. The staff pretended that they were not Chinese. This is an old marketing ploy because within each country in the world, there is a segment of the population that prefers to shop with establishments that are housed within the countries of their origin. It is a type of loyalty that helps to keep the financial support of the populace within the economy of their own countries. This is yet another interesting fact about Alibaba that many people didn't know. It was a smart strategy and it shows how dedicated the folks at Alibaba were to the success of the company. In the beginning, no stone was left un-turned when it came to marketing.

Jack Ma started Alibaba on a shoe string

Jack Ma wasn't born with a silver spoon in his mouth. As recently as 1998, he was an English teacher who lived in Hangzhou, Zhejiang province in a one bedroom apartment. He is responsible for founding and launching the Alibaba site from his tiny and modest home. Who could have possibly predicted that the once English teacher would become a magnate in the e-commerce business? He has shown the world that all it really takes is one good idea, the confidence to see your idea through, and connecting with the right people that can help you to bring your dreams to life. He is a person who serves as a role model for common people throughout the world who have dreams and a few good ideas. His company that was started on a shoe string just a few short years ago has reached levels of mind-boggling success.

Alibaba is plagued with hackers

Since the giant has gained such success and notoriety as a hot spot for getting good deals and shopping conveniently from home, the criminal element has also taken advantage of an opportunity. On many Alibaba sites, fake goods have also been discovered. The corporation is well aware of this and they have dedicated millions to rooting out the con artists and removing them as quickly as possible. This doesn't mean that it is unsafe to shop Alibaba, it just means that you need to be extra careful to confirm that you're not getting taken. The odds of this happening are slim because of the vigilance of the company, but it is worth mentioning as there are those out there who are trying to piggyback on the sites to bilk the public.

Jack Ma's first internet search was "Beer."

It is a well-known fact that Jack Ma, the founder of Alibaba is not a whiz when it comes to computers or the internet. He only discovered the web in 1995 as he was on a trip to Seattle, Washington. His first ever internet search was on the topic of "Beer." We thought that this was a novel bit of trivia about the e-commerce mogul that people would enjoy learning about.

Ma borrowed a small amount of money to start the company

Jack Ma didn't start his mega billion dollar business with a large bank loan initially. He was actually very smart about thee way he launched the startup. He began Alibaba with a total sum of $60,000. This was borrowed from a group of 18 people. Ma knew how to make every cent of the investment dollars he amassed work for the benefit of the company. He grew Alibaba from its humble beginnings in his apartment to the massive success that it has become today. This just goes to show you that anything is possible in the world of marketing if you start with a good idea, a few good friends willing to take a chance on your plan, and the vision to see it through to completion.

Ma chose the name "Alibaba" in a novel way

This now famous name wasn't borne from long brainstorming sessions behind boardroom doors. Rather, Ma came up with it in a very simple way. One day, he was sitting in a San Francisco coffee shop. He was musing about Ali Baba. He asked the waitress who was serving him that day if she knew anything about Ali Baba. The waitress answered with the phrase "Open Sesame." Asking a total stranger what the name made her think about was all that Jack needed to confirm the name of his new company. There is so much power in a name. It evokes thoughts and feelings in potential customers and "Open sesame" is the sentiment that he was looking for. This would be perfect for the business that would create opportunities for the smaller businesses who would use the platform to sell their goods. Here, we see genius in the simplicity of a single name, and we also see how Ma uses a simple strategy to go about determining this very important step in establishing the business early on. It is nothing short of brilliance without complication.

The founder of Alibaba is a talented public speaker and showman

Ma has a great talent for connecting with an audience, and he comes by it honestly. Both of his parents were performers in the art of ping tan, which is in the genre of traditional storytelling. Ma has earned a reputation for entertaining his staff with his singing and his flamboyant personality. In particular, he enjoys singing songs from "The Lion King." Working on his team must be quite entertaining. When Ma is feeling a little dry on ideas, he goes back to the very flat where he started his company and here is where he gains new inspiration. He goes back to the simple beginnings from which his empire was born.

Alibaba is a dominating force on the internet in China

This should come as no real surprise for those who are familiar with Alibaba and its success. The company is currently responsible for powering eighty percent of all online commerce in China. It has been a godsend for small companies that are in the process of establishing themselves and growing their own empires. In addition to becoming such a large internet presence, the company has created a wave that is similar to the domino effect for other businesses including the warehousing and delivery operations in the country. Over fifty percent of the parcels that are sent in China are associated with Alibaba. When you consider the size and population density of the entire country this is nothing short of phenomenal.

Alibaba is immersed in technological ingenuity, yet the founder has little expertise

This is perhaps one of the most interesting facts about the sensational company that is taking the country of China, and other parts of the globe by storm. Alibaba has entered the e-commerce scene and is now embracing some of the most high tech innovations in the presentation of its platform, but this is just the tip of the iceberg. They have also branched into high technology warehousing, using the latest advances in smart tech for their warehouses, transport and even in subsidiary branches which include the grocery and department store industries. Having said all of this, Ma has been the first to admit that he has very limited expertise in technology. His knowledge and skills in this are has largely been limited to sending emails and surfing the web. He has been savvy enough to surround himself with experts in the areas where his proficiency and knowledge is limited.

Alibaba's corporate structure allows Jack Ma and his senior staff board control

It is common knowledge that a large corporation can easily slip out of the control of its original founder. Although Ma only holds 8.9% of interest in the company, he has set up the corporate structure in a manner that allows he along with the other senior staff members full control over the nomination of over fifty percent of the board members. This allows them to have a say in who will be set in place to control the affairs and direction that the company takes. It's a type of insurance that is perfectly legal and ethical, but it also gives Jack the ability to ensure that the company stays on track with his ultimate vision and goals.

Alibaba's direction is stable with three major mandates

One of the reasons that Jack Ma sought to retain control over the direction of the company is that he understands what it takes for a company to be successful. There are three main principles that he insists the business will follow. They are quite simply that the customers will always remain first, the employees will come second and the shareholders will come in third. While not all investors share this philosophy, there is little that they can do to change it because of the distribution of power when it comes to the influence of the board of directors. In all fairness, shareholders understand these rules up front and by investing, they understand that this is the established order and it is not negotiable. It seems at this point that there is little worry on the part of the investors because the business model has proven its worth.

Alibaba is the little known giant that is bigger than Amazon

Recent polls taken show that Alibaba is a new company that people outside of China know very little about. While this is likely to change rapidly, as of now, there is very low recognition of the brand in the United States. An overwhelming 88% of all those polled had never heard of Alibaba and had no idea where it was from, nor what it is all about. When you ask people if they have heard of Amazon in the US, most are not only familiar with the e-commerce giant, they have also used it frequently. It is believed that Alibaba is preparing to target European and US markets in the near future. When compared with Amazon which currently has a value estimated at $150 billion. Alibaba is currently valued at $162.7 billion. Market shares for Alibaba are on the increase and as of now, there is a strong demand for the shares. The business currently employs over 25,000 people and Jack Ma has a net worth of $10.3 billion, making him the third riches man in the world. The Taobao company falls under the umbrella of Alibaba, providing the e-commerce platform under which more than seven million merchants are active selling their products and services.

New York was chosen over the Hong Kong stock exchange by Ma and senior staff

Although Alibaba is based in China, Ma and his execs made the decision to go with the New York Stock Exchange over the Hong Kong Stock Exchange. The decision was made because New York supported Ma's policies and corporate guidelines for board member nominations. It is no secret that Ma is fulfilling the goal of dominating the Chinese e-commerce industry through Alibaba. He continues to retain control of the company with the current structure in place. After the IPO, a 29 person partnership will hold power over the direction of the company with Ma retaining the right to nominate over half of the members, giving him greater influence over the vote. The Hong Kong Stock Exchange officials denied his request to maintain this structure. Jack Ma was unwilling to bend an inch on his resolve and found a more amicable agreement with NYSE officials who were happy to accommodate his request. Now expanding yet further with an estimate of 600 million internet users in China, Alibaba is adding a new line of financial services for more convenient payment options, called the Alipay app. They're forward looking and expanding rapidly.

Garrett Parker

Written by Garrett Parker

Garrett by trade is a personal finance freelance writer and journalist. With over 10 years experience he's covered businesses, CEOs, and investments. However he does like to take on other topics involving some of his personal interests like automobiles, future technologies, and anything else that could change the world.

Read more posts by Garrett Parker

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