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Alibaba: The Chinese platform for online trading

2021-04-22T15:52:38.740Z


Alibaba is Jack Ma's success story and the Chinese answer to Jeff Bezos and Amazon. With its platform AliExpress, the group wants to compete with the Americans in Europe soon.


Alibaba is Jack Ma's success story and the Chinese answer to Jeff Bezos and Amazon.

With its platform AliExpress, the group wants to compete with the Americans in Europe soon.

Hangzhou - The Alibaba e-commerce platform is one of the great success stories in China.

Founder Jack Ma managed to rise from a simple tourist guide and English teacher to one of the richest people in the world.

His private wealth is estimated at the equivalent of over 22 billion euros.

Alibaba operates multiple platforms for online shopping.

AliPay from Alibaba's financial subsidiary Ant Group is one of the two dominant online and mobile payment services in China.

Alibaba and founder Jack Ma

Jack Ma was born in 1964 in the Chinese city of Hangzhou, about 150 kilometers southwest of Shanghai. The historic city is famous for the picturesque West Lake with its pagodas and gardens, which also attracted western tourists at the time of the communist isolation of China. The young Jack, who at that time still had the Chinese name Ma Yun, took advantage of this by working as a tourist guide for nine years and learning English in the process. One of his new western friends nicknamed him Jack, which he would later adopt as the founder of Alibaba.

Jack Ma failed his math entrance exam for the Hangzhou Teacher's Institute three times before he was able to start studying English.

After graduation, Ma worked as a lecturer in English and International Trade at Hangzhou Dianzi University.

According to his own statements, he applied for 30 different part-time jobs and was rejected everywhere.

Alibaba: Establishment and Early History

In the 1990s, the Chinese Communist Party under Deng Xiaoping initiated major economic reforms in China. These gradually opened up China to private business and world trade. In this favorable environment, Jack Ma was one of the first to recognize the potential of the fledgling Internet - and founded his first company, the Hangzhou Haibo Translation Agency. During a trip to the USA, he discovered that there was little knowledge about China abroad. So after his return home he programmed chinapages.com with his friend He Yibing. Chinese investors soon knocked on his door, and they gave him his first major business success.

After a short stint for the China International Electronic Commerce Center in Beijing, Jack Ma returned to Hangzhou in 1999 and founded a new company with 18 friends: Alibaba.

The e-commerce platform initially focused on the B2B area and established business relationships between Chinese SMEs (small and medium-sized enterprises).

The founders were able to make profits for the first time within three years.

Alibaba becomes a world power

The great success of the B2B platform Alibaba allowed Jack Ma to expand his power in Chinese e-commerce.

In the first years of the new millennium, several other large platforms emerged in China:

  • Taobao (2003) started as an auction platform on which private households can offer and buy or auction things (comparable to eBay).

    Small shops now also sell there.

  • AliExpress (2010) is a global retail platform through which customers from all over the world can order Chinese products.

    AliExpress only acts as an intermediary between seller and buyer (comparable to Amazon Marketplace).

  • AliPay (2004) is an online payment system that initially allowed customers to pay online at Taobao and Alibaba.

    Today all types of payments are possible (comparable to PayPal).

  • Tmall.com (2008) is an online department store that is currently focused on the Chinese-speaking countries (PR China, Hong Kong, Macau and Taiwan) and is one of the most visited websites in the world (comparable to Amazon).

Numerous other services were developed around these platforms, such as the AliWangwang instant messenger, which customers can use to chat with salespeople and customer service, and the eTao shopping search engine.

Alibaba is penetrating other business areas

Jack Ma then developed further services in the area of ​​e-commerce - such as the Aliyun OS web service and the financial services provider Ant Group, which emerged from AliPay and Ant Financial.

In 2014, Alibaba bought the online map service AutoNavi and offers route planners for China on the amap.com website.

In the same year, Jack Ma acquired the film production company ChinaVision Media and renamed it the Alibaba Pictures Group.

The company not only finances and produces films in China, but is also involved as an investor or co-producer in Hollywood films such as “Star Trek Beyond”, “Once upon a time” and the “Mission Impossible” series.

The founder has been heavily involved in the charity sector through the Jack Ma Foundation since 2014.

During the first phase of the corona pandemic, he donated medical supplies to over 150 countries around the world.

Jack Ma retired from active business at Alibaba in 2018, but remained associated with the company.

Jack Ma also owns the Hong Kong newspaper

South China Morning Post

.

Alibaba in Europe

After Alibaba had been represented in German-speaking countries with the B2B platform Alibaba.com for a long time, there is now also a German-language version of the B2C platform Aliexpress.com.

Private end customers from Germany can use this to order goods, most of which are sent directly from China.

Alibaba established a logistics hub at the airport in Liège, Belgium, from which the entire Benelux region, France and Germany can be supplied quickly and easily.

For the logistics subsidiary Cainiao, Liège is the fifth major hub alongside Moscow, Dubai, Hong Kong and Kuala Lumpur.

In 2019, AliExpress opened a flagship store in Madrid with a range of global, Chinese and Spanish brands.

If Alibaba has its way, Spain should become the gateway to Europe for AliExpress.

Alibaba and AliExpress in Germany: advantages and disadvantages of ordering

AliExpress does not act as a seller in e-commerce itself, but rather establishes contacts between sellers in China and global buyers.

It is more like Amazon Marketplace.

The range is huge, but for most products there are only machine-generated, difficult-to-understand translations.

In the case of expensive branded products, it is not always clear whether they are original goods.

A big advantage of Alibaba and AliExpress is the payment processing: The money is only paid out to the merchant when the customer has actually received his package.

Payment is made either by credit card or AliPay.

The customs modalities are important for direct delivery from China.

From a purchase amount of 22 euros, 19 percent import sales tax applies.

These correspond to the 19 percent VAT that buyers in Germany would also have to pay.

In real terms, the limit is EUR 26.30, as German customs authorities do not bother with the administrative effort for small amounts of up to EUR 5.

If the consignment is declared as a private consignment or a gift, the import tax is only levied from a goods value of 45 euros.

Tip for consumers: inside: Customs for goods shipments from China

Customs must only be paid for many products with a goods value of 150 euros or more.

The tariff rates in e-commerce are very different.

Some important product groups:

Product group

inch

Electronics (smartphones, notebooks, etc.)

0% (duty free)

Navigation devices, e-readers

3.7%

Cosmetics

0 - 6.5%

Gold and silver jewelry

2.5-4%

Handbags

3 - 9.7%

clothing

12%

Shoes

8% (leather), 16.8 - 17% (not made of leather)

In other words: for German end customers, Chinese smartphones from brands such as Huawei and Xiaomi can be a real bargain when ordering due to the lack of customs fees.

The latest sneakers from the USA, on which up to 17 percent tariffs are levied, tend not to be.

Alibaba: share and future outlook

The Alibaba Group is listed on the New York Stock Exchange.

The share has only known one way in recent years: steeply upwards.

However, he gave in around the turmoil of the failed IPO of the Ant Group in October 2020.

Allegedly, President Xi Jinping himself was responsible for the cancellation of the Ant IPO in Shanghai.

The government is currently fighting monopoly in the platform industry - and has several of the big tech companies in its sights.

One of them is Alibaba.

In spring 2021, the Ant Group tried to restructure in order to go public this year.

In connection with the cancellation of the Ant IPO, Jack Ma disappeared from the scene for a while in October 2020 after a speech in which he criticized the tax authorities - which sparked speculation that the government was taking action against him.

In January 2021, Ma reappeared.

Although officially a member of the Communist Party, the entrepreneur is considered to be intellectually independent, and thus offends the government from time to time.

Source: merkur

All news articles on 2021-04-22

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