Please read attached text “The Rise of Alibaba”
Answer the three questions below. The submission should be submitted in APA format (Times New Roman, 12-point, double-spacing with margins of one inch, citations and references.) In addition to the text, you should use at least 3 external sources (articles or books). Ensure that you back up your answers using your sources. Cite your sources/references.

What are the characteristics of Alibaba’s growth, innovation, and financing strategies that are typical of successful entrepreneurial firms? What is unusual about Alibaba?
Why has Alibaba become globally famous by focusing on its domestic market?
Sometimes the IPO of widely successful firms flops—Facebook’s disappointing IPO comes to mind. Does Alibaba deserve to be one of the world’s most valuable companies?

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Chapter 9: Growing and Internationalizing the Entrepreneurial Firm Closing Case Emerging Markets: The Rise of Alibaba
Book Title: Global Business
Printed By: Morten Brante (
© 2015 Cengage Learning, Cengage Learning

Chapter Review

Closing Case Emerging Markets: The Rise of Alibaba

Founded in 1999 by a former English teacher Jack Ma, Alibaba has risen to become the
largest e-commerce firm not only in China, but also in the world—the value of goods sold on
its platforms (US$170 billion in 2013) are more than Amazon and eBay combined. Alibaba
started as a business-to-business (B2B) portal connecting overseas buyers and small
Chinese manufacturers. Inspired by eBay, Alibaba next launched Taobao, a consumer-to-
consumer (C2C) portal that now features nearly a billion products and is the one of the 20
most-visited websites worldwide. Finally, with Tmall, Alibaba offers an Amazon-like
business-to-consumer (B2C) portal that assists global brands such as Levi’s and Disney to
reach the middle class in China.

© 360b/

The rise of Alibaba has been breathtaking. As China becomes the largest e-commerce
market (already bigger than the United States), Alibaba controls four-fifths of all e-
commerce in China. In 2013, on Single’s Day (November 11, a marketing invention created
to encourage singles to “be nice” to themselves), Alibaba sold more than US$5.7 billion.
Preparing to initiate an initial public offering (IPO) in New York, Alibaba had been predicted
by the Economist to have the potential “to be among the world’s most valuable companies.”
On September 19, 2014, Alibaba’s initial public offering (IPO) on the New York Stock
Exchange was indeed the world’s largest, raising US$25 billion.

Behind the rise of Alibaba is a story of focus and innovation. “eBay may be a shark in the
ocean,” Ma once said, “but I am a crocodile in the Yangtze River. If we fight in the ocean, I
lose; but if we fight in the river, I win.” The Crocodile of Yangtze, as Ma became known, has
largely focused on China to avoid head-on competition with eBays of the world elsewhere.

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In China, eBay has been forced to retreat. In a low-trust society such as China, where
people generally shy away from buying from strangers online and where people hesitate to
use credit cards, Alibaba has pioneered an Alipay system. This is a novel online-payments
system that relies an escrow (releasing money to sellers only once their buyers are happy
with the goods received). This not only facilitates transactions for Alibaba as well as its
buyers and sellers, but also helps build trust at the societal level.

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