Give your analysis of Alibaba\'s m-commerce strategy and the transparency of the

Question

Give your analysis of Alibaba's m-commerce strategy and the transparency of their plans for potential investors.

What information should investors have access to through Alibaba's Web site to increase transparency and reduce investor risk?

How should this lack of transparency impact Western investment in the Chinese IT giant?

WEB-BASED CASE Alibaba E-Commerce Strategy and Issues In 2013, retail sales made through mobile devices in the United States increased by 188 percent to roughly $65 billion. Mobile-commerce (m-commerce] is expected to climb at an even faster rate in the developing world, as increasingly available mobile phones provide cheaper, more afford able Internet access to those who cannot afford PCs and wired Internet access. In China, for exam- ple, to remain competitive, the e-commerce giants must target m-commerce Given Alibaba's venture into online payment systems and cloud services, Chinese banks have lobbied their government to limit Alibaba's conquest of markets, such as the financial services market, that the banks feel should be their exclusive territory. A decision by the Chinese government to appease the banks will impact Alibaba's operations and profits Because Alibaba operates in China, under a communist regime, both government decisions and the company's actions are not as transparent as they would be in the West. What infor- mation should investors have access to through Alibaba's Web site to increase transparency and reduce investor risk? How should this lack of transparency impact Western investment in the Chinese IT giant? Source: Smith, Cooper, "Mobile Retail Explodes-Phones and Tablets Are Driving One-Fourth of All E-Commerce," Business Insider, March 18, 2014, www.businessinsider.com/e-commerce -insider-the-mobile-retailboom-2014-3

Explanation / Answer

Answer:

Alibaba's m-commerce strategy and the transparency of their plans for potential investors: Alibaba is a one of the largest online business in the China market. For the online market the fastest way for customer engagement is with the help of internet. The mobile connectivity is even fastest mode for internet based business, as mobile use to be with the consumer whole time in day and night and they can use mobile for online business at any point of time. So the strategy of Alibaba is to have m-commerce i.e. commerce through mobile so that consumers can make quickest and fastest purchase transactions with the help of mobile connectivity.

Transparency plans are such that they can show the business result transparently to their key investors and stakeholders of the Alibaba organization. This will help the Alibaba to develop the positive image among their investors and stakeholder and they can rely on the information shown by the Alibaba website.

The information for which the investors should have access to through Alibaba's website to increase transparency and reduce investor risk are as below

Financial information needed to the investors.

Sales figure on weekly, monthly quarterly basis.

Sales on segment basis, so that investors can review their interest of area.

Revenue figures so that investors can understand the revenue generation at the Alibaba website.

Key costing and expenses information necessary for the investors, so that investors can understand the cost input sides for their better transparency.

Any other information investors needed based on their requirements.

The lack of transparency impacts Western investment in the Chinese IT giant as below

Western investment people thinks that they will not be able to get the required transparency on the Chinese IT giants

Western investments have low confidence on Chine operations and people behavior.

Western investment people needs confirm financial information so that they can rely on the website information and they want to the information to be clear and correct information. This lacks in the China giants hence they will have low confidence.

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