3 Discussion activities-to reply- DUE: 2/12/2017
Topic 2. Technology's Impact on Importing & Exporting (Alibaba.com)
Student’s post:
Entering Alibaba’s site, I chose to search textiles and leather products, narrowed down to fabrics. To utilize this site one would need to know exactly what they are looking for. This site is a bit overwhelming with the amount of choices there are to choose from. The help/community section is useful. The ability to search by region is very helpful to narrow down products.
Importers using Alibaba are faced with both advantages and disadvantages. The advantages include lower unit costs and ability to customize your quantities which can produce higher company profits. Another advantage is the amount of options available, which can make it easier to choose the best product. One disadvantage to using Alibaba is the standards placed on some products may not match other countries standards, which could cut into profits. Another disadvantage is custom rules and regulations this may delay product delivery. Another disadvantage could be a language barrier, which could lead to miscommunications regarding price, product and delivery.
I use Amazon a lot, Amazon seems to be a more user friendly site. The Amazon search engine promotes ease of finding/narrowing products and sellers. While the Alibaba search engine does not offer such ease. However, Alibaba region search feature does make it easier when you know where you want your products to come from. Alibaba is more structured around foreign market sellers, while Amazon seems to be more focused to U.S. deliverables.
Alibaba has been able to rise to the top of the e-commerce chain and could even bypass the regulations set in place by other governments (Stone, 2014). While browsing Alibaba’s site, I see a great amount of goods that could be defined as counterfeit. Alibaba’s own site promotes a intellectual property rights policy, however they do not seem to be upholding their own policy. Owning up to this fact would fracture Ma’s reputation and his earnings. Closing Ma’s site would affect the e-commerce world that has come to rely heavily on this site. Since imported goods into the U.S. are treated the same as goods produced here, overlooking counterfeit products can result in breaching WTO regulations (James & Watson, 2013).
Since BRIC countries are identified to be weak in regulatory nature (it may take a lot of effort to reclaim creditability (Holtbrügge & Baron, 2013). For Alibaba to dominate the global market they should revamp their strategy to include solid global partners to better source material and products, overall build value. This will enable Alibaba to maximize profits, increase the quality and reliability of products sold on the site and improve the service. Another global partner can assist Alibaba in trade agreements as well as custom regulations and exchanges (Michalski, 2015).
Another step Alibaba can take can be is the adherence of intellectual property rights. This not only builds trust between vendors, buyers and other countries but it adds value to the company. Another way to dominate the market would be to change logistics, meaning research better options for supply chain management and distribution. This can open up new avenues of expansion, increase competitive advantage and could even reduce costs associated with distribution (Jakada, 2014).
References
Holtbrügge, D., & Baron, A. (2013). Market entry strategies in emerging markets: An institutional study in the BRIC countries. Thunderbird International Business Review, 55(3), 237-252. doi:10.1002/tie.21541
Jakada, B. A. (2014). Building Global Strategic Alliances and Coalitions for Foreign Investment Opportunities. International Journal Of Global Business, 7(1), 77.
James, S., & Watson, K. W. (2013, April). Regulatory Protectionism - A Hidden Threat to Free Trade |Policy Analysis. Retrieved from http://www.cato.org
Michalski, E. (2015). FOREIGN MARKET ENTRY STRATEGY. Acta Scientiarum Polonorum. Oeconomia, 14(2), 107-117.
Stone, B. (2014). The Alibaba Invasion. Bloomberg Business Week.
