Supply chain at Alibaba

 

Hi everyone. I’m Arun R from final year Amrita School of Business. This blog is about the insights I got from supply chain decision at Alibaba.

Alibaba holding group or Alibaba Group is a Chinese multinational technology company started in 1999.  It is one of the biggest online commerce company. They have more than hundreds of millions of users and host millions of merchants and business. They specialize in e-commerce, retail, and technology. They are one of the sought-after destination for one of the fastest growing sector, the e-commerce market. Almost 80% of China’s online shopping market is dominated by Alibaba. They help to connect exporters in China with companies all over the world. Their goal is to build the future of infrastructure of e-commerce. And the success of this is mostly credited to the successful use of their supply chain resources. They are one of the top companies that effectively manage their supply chain.

Some of the lessons that we could gain from Alibaba's supply chain are;

·       They understand the customer behaviour and watch Their customers closely for any change in their behaviour. They found that Chinese like to negotiate while shopping and thus they created a real-life shopping experience for their customers. That developed a chat application that helps the customers to get in touch with the vendors and ask for discounts.

·       Another success factor is their customer service. They have a customer service representative called “Xiaoer”, who helps in mediation. That also manage and control vendors performance and invite top performing vendors to participate in marketing campaigns.

·       In order to serve the whole China, they depend on some third part logistics providers as China is a big country and only some places are developed. So, to meet all the customers demand they use the external logistics providers. They also used the help of China post for countryside delivery.

·       Alibaba uses an escrow system called “Alipay” for smooth financing. It makes sure that the when the customer get the product the vendors get the money.

·       They also have a unique employee rotation policy, where they rotate the work between each business unit and branches frequently. By doing this each employee will get a fair idea of the overall business process.