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Case Study

Alibaba vs. Ebay: Competing in the Chinese C2C market (A)

By Winter Nie, Katherine Xin and Vladimir Pucik

3 pages

June 2007

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Reference: IMD-3-1842

This four-part case series follows Taobao, part of the Alibaba Group – the leading business-to-business (B2B) e-commerce company in China – from 2003 to 2006. The A-case begins in April 2003 as Jack Ma, the 39-year-old CEO of Alibaba, worries. According to the latest market data, eBay, the global leader in online auctions had reached almost total dominance of the local consumer-to-consumer (C2C) market – only about a year after its entry into China.

While Alibaba was not active in the Chinese C2C market, and eBay’s expansion did not impact its current business, looking forward, there was cause for concern. What if eBay decided to use its C2C power to attack Alibaba in its traditional B2B domain? Jack wondered if anything could be done to prevent this from happening?

The B-case documents how Taobao competes with eBay in China’s C2C market. It describes Taobao’s strategy to increase its market share. The C-case discusses Taobao’s business model. Although they gained market share at the expense of eBay, the question remains—what business model should they adopt so they can make money in the future? The D-case is an update on the competitors’ strategies and the events that took place between 2006 and 2010.

Learning Objective

How to compete in China’s B2C and C2C internet market
How local Chinese companies can compete with multinational corporations
How to build a unique organizational culture

Keywords

Strategy, Corporate Culture, Business to Consumer, Consumer to Consumer, Business Model, Online Business, Online Marketplace, Internet Portal, eBusiness, eRetailing, Internet, General Management

Settings

Taobao, Alibaba Group
2003-2006

Type

Field Research

Available Languages

English, Chinese

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