Jack Ma, a former English teacher, started Alibaba in 1999 with an investment of US$60,000. His apartment was the firm’s first office. In a little less than two decades, the company has grown into an e-commerce giant. China has the largest number of internet users in the world and online purchases are becoming increasingly popular.
Alibaba’s Taobao and TMall are the world’s largest e-commerce sites. But the company’s activities are not restricted to this segment alone. It has interests in digital media and entertainment and has also made a foray into cloud computing. Alibaba also owns the South China Morning Post, a Hong Kong-based English language newspaper.
Last year, Alibaba Pictures made an investment in Steven Spielberg’s production company, Amblin Partners. Alibaba will collaborate with Amblin in marketing and distributing films in China.
In 2012, Alibaba’s gross merchandise volume (GMV) – the total sales dollar value of goods sold on its various platforms – stood at US$160 billion. By 2016, GMV had risen to US$450 billion, and Ma predicts it will hit US$1 trillion by 2020.
Alibaba currently has 423 million active buyers who use its sites. It plans to raise this number to two billion by 2036.
The company is confident about its continued rapid expansion in the Chinese market. CEO Daniel Zhang explains that there are 600,000 villages in China, a majority of which do not have more than 1,000 families living in them. Manufacturers cannot access these consumers through traditional channels, so e-commerce is the best option for them. In an effort to capture this market, the company has entered into partnerships with local entrepreneurs. Zhang says, “They buy on behalf of others, pay on behalf of others, and receive on behalf of others.”