Alibaba.com is a china based e-commerce website that offers wholesale trade to customers all over the globe. Before working on the SWOT Analysis of Alibaba, let’s have a small introduction to the group. Alibaba is a multinational brand name that deals in retail, technology, and the internet as well. Over the last two decades, Alibaba has transformed the whole online purchasing scenario. The group is a trendsetting enterprise that is currently sharing more than 80% of China’s online business. With more than 103,699 employees in 100 franchises, Alibaba is a company with the largest sales and operational network. The headquarter of Alibaba group is located at the Xixi District of Hangzhou, China. The net worth of the brand is 150 billion US dollars.
SWOT Analysis of Alibaba
Strengths
Highest Sales Graph
First of all, Alibaba.com is an online retailer industry with the highest sales indicators. The business model adopted by the brand makes it different from its competitors. Alibaba is an enterprise that offers a wide variety of products under a single online channel. Alibaba is a leading eCommerce business that has established its business in multiple countries including the USA. During the first quarter of 2019, the estimated revenue of the company has increased by up to 51%. The total revenue generated by the company is approximately 13,932 million USD.
Annual Active Consumers
Alibaba is the biggest online shopping portal. Since 1999, the annual active customers are consistently increasing. Alibaba is providing quality services to all types of customers. With the satisfactory services, first of all, Alibaba has now reached to 654 million consumers all over the globe. Above all, in the year 2018, there is an increase of 18 million customers. Hence, this growth indicates a stronger connection between customers and the brand.
Business Operation Abilities:
Alibaba has a unique operational model. The company has consistently improved its operational abilities in order to provide effective dealing. This particular eCommerce website has a diverse management system that allows customers to enjoy the freedom of online shopping.
Futuristic Approach:
Furthermore, Alibaba has strongly built a loyalty-based relationship with employees. The management style adopted by the company CEO has changed the whole marketing concept. Therefore, a futuristic approach implemented by the company that makes it different. The design and the workflow offered by the brand are simpler. Consequently, Alibaba is a target-oriented company that deals in a persuasive style of marketing and sales. Due to a visionary approach of Jack Ma, Alibaba Group is now leading the eCommerce market.
Flexible Business Approach towards Partners
Alibaba has expanded its business with the help of third-party partners. Partnerships have a huge role in achieving targeted sales. The enterprise believes in collective efforts in order to generate profits. For the same reasons, the brand has flexible offers for third parties. There are scalable platforms available for dealers and consumers. Moreover, for convenience, there is a cloud storage provided to all kinds of partners.
SWOT Analysis of Alibaba
Weaknesses
Competition between the Sellers:
Alibaba always welcomes upcoming companies for registration. There are unlimited numbers of partners that Alibaba has already listed. For the time being, it may seem good for the business, but in the long run, it can create problems. With too many partners, the competition will be ultimately higher. From the partner’s perspective, it can decrease the chances of growth with increased competition and reduced profits.
Decline in Operational Income:
Operational income is a directive indication for any company. Recently, there is a decrease of 5% in the operational income. The decline is due to the fact that Alibaba had to face a lawsuit worth of US 250 million.
Fake Goods and Applications:
Alibaba is criticized a lot about fake goods and items. There are many complaints registered against the company for allowing fake goods sales and purchases. However, the enterprise has denied all the allegations. The mobile application designed by Alibaba is not impressive at all. Moreover, the online stores offered by Alibaba have unlicensed applications available.
Less Secure:
Online eCommerce website like Alibaba offers a predefined purchasing process. There are a series of steps involved in order to buy an item. Customers have to share the details considering the payment modes. In some cases, there are complaints registered about the scams. Alibaba has a less secure platform for customers.
Profit of Margin for Partners:
Alibaba is known for its budget-friendly offers. There is a number of cheap deals offered to customers. Likewise, there are promotional codes given to online buyers. With such a budget-friendly platform, it is difficult for the partners to generate profitable business. With this approach, the profit of margin shrinks. As a result, the number of sellers can decrease eventually.
Conventional Business Model:
Alibaba is currently following the conventional business model. Right now, the enterprise is not investing wisely in the research and development domain. As a result, Alibaba might not be able to compete with the biggest competitors in the market.
SWOT Analysis of Alibaba
Opportunities
Newer Product Categories:
While doing the SWOT Analysis Alibaba is a stable online market place with impressive cash flow. Once there is huge cash flow, it allows enterprises to invest in products. There are multiple opportunities available for Alibaba in new product segments. With this approach, the brand can create a new opportunity for business expansion.
Economic Growth and Purchasing Power:
Due to economic growth, the purchasing power of the customer gradually increases. With the economy getting stronger, Alibaba can take advantage of introducing new services for the clients. There is always a margin for improvement in any business. Alibaba can capture new customers with innovative marketing techniques.
Accessibility outside China:
First of all, Alibaba has primarily focused on Chinese markets. Therefore, they have millions of customers that use Alibaba as a shopping platform. As a world-known selling enterprise, Alibaba.com can concentrate on the potential market outside China. These markets are already dominated by the world’s best sellers.
Value-Oriented Proposals:
Alibaba is a company that is well aware of pricing strategies. These strategies are defined by the experts in order to maintain connectivity between customers and the company. Alibaba can add value-oriented proposals to consumers. In this way, more buyers can be attracted to the business.
SWOT Analysis of Alibaba
Threats
International Competitors:
Alibaba is a company that is dealing with local competitors. Globally, there are multinational organizations offering the same sort of services like Alibaba. As an online retailer, Alibaba must have to deal with competitors internationally.
Value of Money and its Fluctuation:
Alibaba has an established business in most of the countries. But the political and economic stability may not always be the same. Both of these factors can cause significant fluctuation in sales and company operational activities.
Negative Imaging of Online Portals:
Competitors are creating a negative image in the market. This particular image can create lots of problems for industries like Alibaba. Customer trends and behaviors are also one of the factors that can decline sales. Alibaba must have to keep on branding a good image with interactive marketing strategies.
Decline in Profit Percentage:
Online purchasing trend is increasing day by day. In order to meet the requirements, there are multiple online sellers available in the market. The eCommerce portals like Alibaba rely upon the number of customers. The margin of profit can decrease in order to stay in competition with economical pricing.