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  • 24 Aug 2022

  • 24 Aug 2022

Alibaba Business Model: To Build Future Infrastructure of Commerce

Alibaba Group is a company started by Jack Ma who was the most recognized Chinese entrepreneur in the world. It is a massive platform from which people can buy anything. It owns a wide range of platforms, such as, Lozada, Aliexpress, and

Alibaba itself is not a retailer, it is just the engine and the platform that powers these retailers. It is also the largest venture investor in China with a huge investment in other digital businesses, and also startups as well.


To make it easy to do business anywhere.


To build the future infrastructure of commerce.

Founder - Jack Ma

Alibaba, Founder, Jack Ma

Jack Ma has impacted the entire economy and the internet industry of China. Today, he is among the most valued person in the world.

He faced failures several times since his school times. His career too was associated with failures. He always got disappointed in several places. But Mr. Jack was well versed in the English language, so later he got a job as a lecturer in a college. He also worked as a translator for some days.

Once he went to America to meet his friend, where he found the Internet for the first time. He started exploring some general knowledge about China on the internet, but he found that there was no such information available on the internet. So he found a good opportunity on the internet.

He made good research and decided to place the small and big businesses of China on the internet, and made a website, which was China Yellow Page, but still, he did not get any funding from this, due to which he closed the website. But he did not lose hope and again started a new website, which was He has to face some issues in the beginning, but slowly he started getting the fruit of his efforts. Today, he comes on the list of the richest people in the world, who inspires many people.

What is Alibaba?

Alibaba Group was founded in 1999, by Jack Ma with the assistance of 17 other co-founders with the website, which is a (B2B) business-to-business portal to connect Chinese manufacturers with international buyers.

Today, Alibaba Group Holding Limited is one of the biggest companies in China. It provides C2C, B2C, and B2C sales. It also provides other services via e-commerce web as well as offline portals. Electronic payment services, marketplace, and data-centric cloud computing are the major revenue sources.

Business Model

Alibaba Group is the largest retailer in the world and an E-commerce company, which made many businesses and platforms including The first business of the company was founded in 1999 as an online sourcing platform with a directory of mostly Chinese manufacturers.

How Does it Work?

Its business model of Alibaba is different from eBay and Amazon. The company focused more on trade between businesses, and also focuses on serving as a platform for suppliers to sell products to small or medium-sized businesses worldwide at wholesale prices in bulk. The company mainly focuses on B2B trade, and also gives assistance to the other trade through E-Commerce web portals.

Customer Segmentation

The company works through different applications to streamline its business.

It is a B2B website, which connects manufacturers from different countries with buyers around the world. Today, is still the place to go if people need to source materials or develop new products from manufacturers all over the world, but it is also far more.

It has evolved into an end-to-end transaction platform where buyers and sellers from 190 countries trade with one another, and has become an essential ally for small businesses, who need to become digital and go global in order to survive.

In response to the pandemic, has launched B2B services, including online trade shows, and expedited shipping options, helping many small businesses.

How does Alibaba make money? is a marketplace that associates sellers and buyers. It acts as an intermediary which charges commissions from the sellers of mainland China, Hongkong & Taiwan, and offers two types of supplier memberships - Free Supplier Membership, and Premium Gold Supplier Membership.

Free Supplier Membership

The company does not charge anything from its suppliers to list their goods on the online marketplace and makes money through commissions. The suppliers are free to display up to 50 Products online and to get business inquiries.

Premium Gold Supplier Membership

As the suppliers have limitations and can display only upto 50 products on the website, and the suppliers from China cannot list themselves as free suppliers and have to purchase the premium gold supplier membership plan to start a business on the given platform.

It has resonance with eBay or Amazon. Its primary motive is to connect international businesses to consumers or consumers to consumers. It is a Chinese online shopping platform, which is headquartered in Hangzhou and owned by Alibaba.

Its marketplace facilitates consumer-to-consumer (C2C) retail by providing a platform for small businesses, and also for individual entrepreneurs to open online stores. Its stores usually offer an express delivery service. It became a major contender in the Chinese consumer e-commerce market.

How does Taobao make money?

Taobao allows merchants to join the site for free, and there is no transaction fee for conducting trade. It acts like Google and shows the results of the keywords, where merchants pay to stand out from all the other players through advertising, and other marketing strategies. The site is associated with a special rating system that shows the transactions completed by the sellers.

This marketplace caters to the middle class. Furthermore, it lays its focus on large and multinational brands. is a Chinese-language website for business-to-consumer (B2C) online retail, which was first introduced by Taobao in April 2008 as Taobao Mall, which is a B2C platform within its consumer E-Commerce website. It is a platform for local Chinese and international businesses to sell brand-name goods to consumers in Greater China.

How does Tmall make money?

It makes money through commissions as a percentage of the price of goods sold. It also earns through the service fees, and the marketing services provided to the suppliers.

Revenue Model

Alibaba, revenue model

It brings its revenue from core e-commerce business or the online retail business. It is associated with digital space and gets the source of revenue from cloud computing, and also earns from display marketing, membership fees, commissions, and other online services.

It shows its focus on business-to-business trade, and also supports other trade through the E-Commerce web portals. In 2012, the company earned 20,025 million yuan, and 34,517 million yuan in 2013, whereas it earned 52,504 million yuan in 2014, and 76,204 million yuan in 2015.

It earned 101,143 million yuan in 2016, and 158,273 million yuan in 2017, whereas it earned 250,266 million yuan in 2018, and 376,844 million yuan in 2019. The company earned 509,711 million yuan in 2020, 717,289 million yuan in 2021, and 853,062 million yuan in 2022.

[The images are being taken from the registered companies and belong to their respective owners only.]