oikosPublicationsCasesAlibaba.com between Economic Success and Corporate Responsibility

Alibaba.com between Economic Success and Corporate Responsibility

27 June 2016 | Cases | Management, Marketing, Strategy

Abstract

The Alibaba Group was one of the biggest and fastest growing businesses in China for about ten years. Among many other companies under the holding’s umbrella, Alibaba.com had become the world’s most frequented market place in the Business to Business segment. The company provided an internet platform for especially small and medium sized companies, where western demands meet Asian supply.

Although the platform opened the door for many firms to the international markets, there was room for improvement. Due to the increasing access to information through the World Wide Web, customers had become more and more sensitive to what is known as corporate responsibility. Sustainable business models and fair working conditions were more than ever of huge importance for the customer. In order to respond to this trend, companies on the demand side had to make sure that their suppliers fulfill not only European standards.

This trend of corporate responsibility recently caused many complaints about the listing and transparency of the Alibaba platform. On the supply side, suppliers missed a tool for signaling their working and quality standards to their customers. There was hardly a way to differentiate from competitors on the webpage. On the demand side companies suffered the same problem vice versa. There was barely a way for small western companies to control and check quality and labor issues for their supply chain without long lasting selection and arrangement processes.

But not only direct users of Alibaba.com drew the attention to the Alibaba system. Years ago many NGOs (Non-Governmental Organizations) claimed for more transparency and social standards on the Alibaba.com homepage.

Jack Ma, the CEO of Alibaba, knew about these problems. However, he also knew that many firms that once started with poor standards were nowadays great companies with well-known products all over the world. With a higher entry barrier, these corporations would not have had the chance to enter the market at all. Developing from a small company with low standards to a firm with high standards was often a long and time-consuming process.

Triggered by the recent complaints Ma was challenged by several self-imposed questions. Ma knew that the listing and policy on his platform were deeply connected with those questions and that there would be no easy solution. Whatever he decided should be the best answer for all parties: The Company, the customers and society.

Authors Kannika Leelapanyalert, David Beschorner, Kim Nadine Reckmann and Marie Aslanian
Institution College of Management, Mahidol University, Thailand
Competition Year 2016
Place Runner up
Track Corporate Sustainability
Key Words Alibaba, corporate sustainability, supplier, NGO, B2B
Courses International marketing
Target Audience MBAs
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