The causes of Alibaba.com Success

Saturday, January 31, 2009

Alibaba.com is an e-commerce or e-auction company which is specializing in global trading. It was founded in 1999 by Ma Yun（Jack Ma）. In 2008, alibaba.com has attracted at least 23 million visitors of which 65 percent were from China.

The alibaba.com is specializes in Business to business trades, especially for international buyers that trying to contact with sellers. It is an e-commerce ecosystem that allows consumers and businesses to do all aspects of business online. Manufacturer can publish their company profile at the Alibaba.com for free, so it can attract lot of low-cost manufacturer joining to their website and company who looking to partner with a low-cost manufacturer can easily search from Alibaba.com to find the suppliers of everything they need. It can help the new business to save some advertisement cost and easier for them to run their business.

Actually, Alibaba.com is just one unit of Ma's growing empire. Alibaba Group is made up of five sub-companies. His Alibaba Group also includes Taobao, which is an online auction web site for consumers like eBay or lelong.com; Alipay, an online payment system similar to PayPal, processing mainly payments within China; Alisoft, it provide the web services to the Chinese small and medium sized enterprise marketplace and the last sub-company is Alimama, which allows web publishers and advertisers to trade online advertising inventory.

So what cause Alibaba.com Success?
Jack Ma mention that one of the factor cause his company success is because of the company name- ALIBABA. When asked the people about alibaba, they all will answer that Alibaba--open sesame. The word 'Alibaba' is easy to spell, and globally known. So it can attract more people to search for the website as it is a simple word and easy to remember. In Jack Ma's mind Alibaba also can said as the opens sesame for small- to medium-sized companies.

Furthermore, Alibaba.com have their own online payment system. It is more convenience for the seller and buyer. The buyer can directly paid to the seller directly through the Alipay.com which is more secure to both the seller and buyer as the Alibaba.com and the Alipay.com are connected so it can reduce the fraud case happen. For example, once the fraud case had comfirm, the Alipay.com will block the transaction and return the money to the buyer.

By the way, another factor that cause Alibaba success is Jack Ma want his employees to belieave that Alibaba is a small company. So no matter how big the company get , they still need to continue innovate and grow. It only the reason that allow Alibaba to compete with other competitor like ebay, amazon.com and etc. So Alibaba will carfully seek for their employees, and each or them must with strong professional skill and good characteristic.

An example of an E-Commerce failure and its causes - Boo.com

Thursday, January 29, 2009

Boo.com’s history (Nov 1999 - May 18th 2000)

Boo was beaten by technology and the fickle fingers of those who shop for clothes on the web. From the day it launched technology was a problem for the online clothes retailer. Originally it was supposed to launch in May 1999 but technical hitches delayed the unveiling. When Boo.com finally went live last November its ambitious technology was there for all to see - if they could be bothered to wait for it to download. The graphics-heavy site took a notoriously long time to load.

The company stated that ‘their business idea is to become the world-leading Internet-based retailer of prestigious brand leisure and sportswear names’. However, after less than a year it launched, boo.com faced a critical moment. “Unless we raise $20 million by midnight, boo.com is dead”. The CEO of the boo.com Ernst Malmsten said, on May 18th 2000. Half the investment was raised, but this was too little, too late, and at midnight, less than a year after its launch, Boo.com closed because investor funds could not be raised to meet the spiraling marketing, technology and wage bills.

The headlines in the Financial Times, the next day read: “Boo.com collapses as Investors refuse funds. Online Sports retailer becomes Europe’s first big Internet casualty”. Although it happen 9 years ago, the boo.com case still remains as a valuable case study for all types of businesses, since it doesn’t only illustrate the challenges of managing E-commerce for a clothes retailer, but rather highlights failings in E-commerce strategy and management that can be made in any type or organization.

The causes of the e-commerce failure

There are several causes that makes Boo.com fall. Firstly, Boo.com full of technologies that cannot be view by all the internet users by that time. It could not be seen by people who use Macintosh computers which are heavily used by graphics, design and media companies. These companies surely are one of the key markets for a hip online retailer like Boo. Next, it used lots of graphics, pop-up windows and 3-D images that only those with a 56k modem could see it without waiting minutes for it to load. Getting the most out of the site required a high bandwidth internet connection. But according to Therese Torris, technology analyst from Forrester Research, only 1% of home surfers in Europe and 2% in the US have such high-speed connections by that time.

Although Boo.com looked great, anyone visiting it in November 1999 was confronted with a formidable array of windows. In one was Miss Boo, an animated helper who commented on the clothes people were buying. At the same time four other windows were open showing:

- The range of clothes a buyer was choosing from

- A detailed image of one item that could be spun around or magnified

- A Boo bag holding what was being bought

- A mannequin dressed in the clothes a shopper was buying

To do all this Boo used a technology called Flash made by US software company Macromedia that lets web page designers add animations and graphics to sites. But unfortunately at the time Boo launched, few people had installed the software program, called a plug-in, that let them see the funky graphics. Now Flash software is much more widely used.

According to Jim McNiven, chief executive officer of award winning web design company Kerb, he said that many companies stop workers from downloading plug-ins because of potential security risks. He said it was much better to use technologies that need no extra software and that everyone can see. Besides that, he says that Kerb always ensures that at least the last two full versions of browsers can see all parts of webpages designed for clients.

Furthermore, the site was very difficult to navigate around. Shoppers could get lost and find no way back to their starting point. In the web design industry, there is a “three-click rule” for site design, which simply means that the users should not need to click more than three times to find the information they seek. Customers prefer pleasurable, simple and quick browsing experience rather then complicated and full of animation that confusing and wasting their time.

In order to gain customer acceptance, Boo redesigned its website in January to make it easier to navigate and added a version devoid of pop-up windows and graphics. The changes gagged Miss Boo and a paper catalogue was printed for those who want to buy offline. However, the early bad experience scared off many online shoppers who did not go back to Boo.com, preferring to do their buying on the high street or on websites that were easier to use. Online shoppers are notoriously fickle and surveys have shown they are easy to irritate and hard to impress. Irritated shoppers tend to decamp for websites offering better service.

Additional information:

But some of the blame for Boo's demise can be put down to the fact that the e-commerce is in its infancy. Boo launched simultaneously in 18 countries and had to create an international infrastructure that could handle all the different currencies, consolidate orders and deliver clothes and shows across the world.

The history and evolution of E-commerce

Electronic commerce also can call it as E-commerce or ecommerce is the buying and selling of goods and service on the internet throughout the world. It also can define as a modern business methodology that addresses the need of organization, merchant or consumer help to improve the quality of good and service.


History and evolution of E-commerce

Beginning, the term ecommerce meant the process of commercial transactions electronically with the technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s which give an opportunity for user to exchange the business information and do electronic transaction.

After that, internet began to advance popularity in year 1994. It took about 5 year to develop the security protocols (HTTP) and DSL that allowing rapidly access and a persistent connection to the internet. By the end of 2000, many people began to associate a word "ecommerce" with the ability of purchasing various goods through the Internet after many European and American business companies offered their services through the World Wide Web (www).

Below is the development of ecommerce from Wikipedia:-

Year 1990
Tim Berners-Lee writes the first web browser, Worldwide Web, using a NeXT computer.

Year 1992
J.H. Snider and Terra Ziporyn publish Future Shop: How New Technologies Will Change the Way We Shop and What We Buy. St. Martin's Press. ISBN 0312063598.

Year 1994
Netscape releases the Navigator browser in October under the code name Mozilla. Pizza Hut offers pizza ordering on its Web page. The first online bank opens. Attempts to offer flower delivery and magazine subscriptions online. Adult materials also becomes commercially available, as do cars and bikes. Netscape 1.0 is introduced in late 1994 SSL encryption that made transactions secure.

Year 1995
Jeff Bezos launches Amazon.com .and the first commercial-free 24 hour, internet-only radio stations, Radio HK and NetRadio start broadcasting. Dell and Cisco begin to aggressively use Internet for commercial transactions. eBay is founded by computer programmer Pierre Omidyar as AuctionWeb

Year 1998
Electronic postal stamps can be purchased and downloaded for printing from the Web.

Year 1999
Business.com sold for US $7.5 million to eCompanies, which was purchased in1997 for US $149,000. The peer-to-peer file sharing software Napster launches.

Year 2000
The dot-com bust

Year 2002
eBay acquires PayPal for $1.5 billion. Niche retail companies CSN Stores and NetShops are founded with the concept of selling products through several targeted domains, rather than a central portal.

Year 2003
Amazon.com posts first yearly profit.

Year 2007
Business.com acquired by R.H. Donnelley for $345 million

Year 2008
US eCommerce and Online Retail sales projected to reach $204 billion, an increase of 17 percent over 2007.

Besides that, E-commerce also can divide into:-

E-tailing or The Virtual Storefront and the Virtual Mall
That was a place for direct retail shopping such as 24-hour availability, the ability to interact and provide custom information and ordering, and multimedia prospects, the Web is rapidly becoming a multibillion dollar source of revenue for the world's businesses.

E-Mail, Fax, and Internet Telephony
E-commerce also conducts e-mail, fax and the emerging use of telephone calls over the Internet. Most of the Business to business, with some companies attempting to use e-mail and fax for unsolicited ads (usually viewed as online junk mail or spam) to consumers and other business prospects. An increasing number of business Web sites offer e-mail newsletters for subscribers.

Business-to-Business Buying and Selling
A lot of companies sell products to other companies through internet have discovered that the Web provides not only a 24-hour but also a quick way to reach the right people in a company for more information.

The Security of Business Transactions
Security includes authenticating business translators, controlling access to resources such as Web pages for registered or selected users, and, to ensuring the privacy and effectiveness of transactions.

Conclusion, ecommerce existence makes customer shop more convenience because they just sit in front of computer by using the mouse click the thing want to buy and then use electronic payment service to make the payment.