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Alibaba is a Role Model for the Fast-Growing Chinese E-Commerce

November 01, 2013

Prof. Sun Baohong shared her views on major contributing factors to the success of Chinese e-commerce and future challenges.

CKGSB Professor Sun Baohong in Fortune Korea:”Alibaba is the Role Model for the Rising Chinese E-Commerce Industry”

Global leading e-commerce giant retailers including eBay and Amazon are gearing up to enter the promising Chinese e-commerce market. In fact, there have been multiple cases where global retailers entered the Chinese market, yet failed to yield any significant performance. Professor Sun Baohong mentioned that despite eBay’s earlier entry in China’s e-commerce market, it was their mistake to apply the American business model on the Chinese market.

Compared to other global retailers, Professor Sun highly appreciated Alibaba’s innovation in terms of the distribution system to catch up with the trend in the domestic market’s demand while highlighting ‘innovation in the distribution system’ and shortening the delivery time as the major contributors to Alibaba’s success. She explained that online shoppers as well as the major target customers called ‘Balinghou (一後世代, the post-80s)’ are losing their patience on delivery time, which Alibaba is well-aware of.

The Chinese e-commerce market is making a series of expansions and variations. First of all, the online shopping environment has been transformed from the traditional PC to mobile environment. Professor Sun explained that as mobile environment has higher influx rate, appealing to mobile shoppers will further help expand the e-commerce industry. She said that the growth of Chinese e-commerce market is changing China’s distribution channels. Online shopping malls are posing credible threats to the department stores and traditional retailers.

Professor Sun pointed out several challenges as well. The most urgent matter is financial fraud and infringement of intellectual property rights. Regarding the security issue, Professor Sun explained that such problems stem from the characteristics of the e-commerce market where sellers and buyers cannot be separated. She also advised international companies’ that the only way to outperform already existing e-commerce companies in China is to build the ‘brand community’, which means that firms should proactively communicate and form a social consensus with the customers.

Read a PDF of the full article (in Korean).

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