Part I Business Model Essay

Submitted By AndrewWong1
Words: 2134
Pages: 9

Products Right at Your Doorstep
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Products Right at Your Doorstep
Introduction
The online retail industry has experienced tremendous growth in the recent years, thanks to the explosion of the internet, and increasing availability and access to the World Wide Web. Many companies have come up that operate in the industry, with major e-retailers including Amazon.com, eBay and Alibaba. These online retailers revolutionized the way that sellers and consumers interact, providing online platforms through which sellers and buyers could transact with only clicks of computer buttons. The new changes rendered the traditional retail system almost obsolete, due to the former’s convenience and reliability. Online stores enable firms to operate on low inventory, implying law costs. As such, the online retailers are able to offer low prices, without jeopardizing their profitability. As more online retailers venture into the online retail industry, competition has continued to get stiff. As such, each firm has been trying to remain competitive and profitable, by adopting unique business models and offering substitutes that appeal to customers. In light of the foregoing, this paper analyzes Amazon, Alibaba and eBay, focusing on their business models, customers and markets, product portfolios and workflow strategies, with the goal of showing how each one of them can leverage their strategic advantages to remain competitive and profitable in this highly volatile industry.
Alibaba, Amazon and eBay: Surviving the Competitive Nature of the Online Retail Industry
Although the online retail environment provides a better business platform, where players are capable of operating at low costs and offering low prices, it is nevertheless competitive, as increasingly more firms are entering the industry in a move to share in the lucrative business. In this regard, there are giant retail operators in the industry, three of which are discussed here.
Alibaba
To start with, Alibaba is perhaps the world’s largest business to business marketplace that provides a trading platform for sellers and buyers. For Alibaba, sellers typically include small and medium-sized enterprises that register with Alibaba and avail their products to millions of users spread across the globe (Alibaba, 2015). This implies that any seller advertising their product through Alibaba has a wide audience. It is this potentially exponential business opportunity for sellers and buyers that make the firm attractive to traders from all over the world. The Alibaba online retail marketplace has such a varied selection of products and substitutes that virtually everyone can find something, be they individuals or businesses looking for services or products. To this end, business service comprises the largest percentage of product categories, with other categories including agriculture, electronic equipment and products, apparel and fashion, industrial supplies, textile and leather, computer hardware and software, food and beverages, minerals, metals and materials, gifts and crafts, and a wide range of other services and products that suit specific user segments (Julia, n.d)
. This Alibaba’s e-marketplace affords users quality services, variety at low costs, trust and credibility through reputable sellers and secure online shopping system, and customer experience that gives users value for money. Alibaba’s business model is simple: helping sellers to meet buyers, and providing a foolproof platform for secure and reliable business transactions. To this end, Alibaba’s customers are both sellers and buyers who can interact on a global scale. The e-marketplace is global, implying users can use the Alibaba’s platform from any part of the world. To this end, buyers and suppliers post their listings using Alibaba’s powerful servers and software, in which they describe their products or needs. The listings are then searched by the relevant audiences, contacts made…