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What makes the Alibaba Group so successful?

Many rural communities have started using Alibaba’s consumer and small business portal, known as Taobao, to start their own small enterprises. It has led to the phenomenon known as the “Taobao village”

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Chinese e-commerce website Alibaba has had a transformative effect on the lives of many of its users.

Alibaba Group, which matches buyers with sellers in the same way as eBay, has grown into an internet behemoth. Founded in 1999 by Jack Ma, it has a market capitalisation of US$233 billion on the New York Stock Exchange and had sales of more than 100 billion Chinese yuan ($19.5 billion) in its most recent financial year.

The company’s websites facilitate business-to-business sales, business-to-consumer sales and consumer-to-consumer sales and sell more than US e-commerce giants eBay and Amazon combined.

As impressive as those numbers are, for many Chinese Alibaba has meant something different – a way out of poverty and into business ownership.

Many rural communities have started using Alibaba’s consumer and small business portal, known as Taobao, to start their own small enterprises.

It has led to the phenomenon known as the “Taobao village” – largely agrarian communities transformed thanks to new job opportunities created by the site.

“We hear stories of empowerment about how 71-year-old grandfathers no longer need to plough the fields. They could be sitting behind a laptop that the whole village pitched in and bought for him to sell produce from the village,” says Felix Tan, a lecturer in the school of information systems and technology management at UNSW Business School.

There are between 300 and 400 Taobao villages in China and Tan says the site has brought them a new level of prosperity.

“We went into the villages in 2012 and 2013 and many of the villagers were driving cars and motorcycles, which was brilliant to see,” he says.

“Part of the reason why Alibaba is so successful is because it is one platform that is able to connect with the people; it gives normal people the opportunity to participate. It’s really about social inclusion and financial participation that Alibaba does extremely well.”

Source: Leader of the pack: What makes the Alibaba Group so successful?

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