Ma Yun’s Internet World

Original B2B Mode

As a pioneer of China’s Internet, Ma Yun is also an unconventional innovator in the industry. Though knowing little about Internet technology, he boldly created a distinctive Internet business. Before him there were no success stories in the global business-to-business market and no Chinese Internet company able to create a business model.

Alibaba’s B2B (business-to-business) model is to provide services like information, finance, management, talent and logistics to SMEs. Unlike other models popular in the West that focus on large enterprises, Alibaba favors small entrepreneurs, matching millions of buyers and sellers worldwide without geographic restrictions. Since the Internet was not yet prevalent in China, there were no competitors.

In May 2003, Alibaba launched its personal e-commerce website – Taobao. In order to compete with eBay, a strong opponent, Taobao adopted a free pattern combined with functions and services tailored to Chinese users. As a result, eBay was forced to withdraw from the Chinese market. Data from analysis company Alexa shows that Taobao has become one of the top 20 most frequently visited websites in the world.

As Taobao developed, the question of payment security became more problematic, hampering its further development. In December 2004, Alipay, a third-party payment platform which provides a fund supervision service between buyers and sellers, came into operation. Alipay has become China’s largest third-party payment platform, with 600 million users and daily transactions of over RMB 2.6 billion.

Currently, Alibaba trades more than eBay and Amazon combined, accounting for two percent of China’s GDP. Alibaba commerce generates 70 percent of China’s express delivery shipments and takes up 80 percent of the country’s online transactions. Perhaps this is just a beginning, as more than half of China’s sales are still offline. China now has more than 600 million netizens, which will soon help China’s e-commerce market surpass the U.S. and become the largest in the world. According to its IPO document, Alibaba’s net profits in 2013 were US $3.592 billion, second only to Google among global Internet enterprises.

Ma Yun’s Commercial Empire

“Just as the Internet is changing the retail industry, we believe it will finally change information-driven industries, such as finance, education, and health care. Once it happens and once we achieve comprehensive interconnection, I believe that equality and transparency, the core Internet spirits, will help China to leap towards a more powerful system and social infrastructure,” Ma Yun said. Ma believes that the Internet is not just about technologies and industries, but conveys a spirit.

On November 11, 2013 the big screen at Alibaba headquarters displays the total volume of payments through Alipay during the “Singles Day” shopping spree.