35

A Case Study of Alibaba: “Control Your

Destiny or Someone Else Will”
Jeongsoo Han1, Miyea Kim, Woo-Hun Rhee, & Minah Lee

Founded in China, Alibaba has emerged as one of the leading e-commerce

companies in the world. The gross merchandise volume of Alibaba is greater
than those of Amazon and eBay combined. Jack Ma, the founder of Alibaba, has
become one of the most respected Chinese business leaders. How did Alibaba
turn its humble start into such great success? The main objective of this case
study is to examine key success factors of Alibaba and to provide valuable
implications. To make the analysis more formal and objective, the five stages of
competition model (Kim 2005, 2011) was adopted for the study. The great
success of Alibaba can be mainly attributed to its foresight and preparation for
future opportunities from paradigm shift and its strategic intent to seize the
opportunities. Jack Ma foresaw the impact of internet development and the
flourishing potential for SMEs (small and medium-sized enterprises) in China
and developed core competence with strategic intent before he launched
Alibaba. This case study of Alibaba provides significant implications for
companies and business leaders who seek to turn their small starts or hardships
into successes or turning points.

Keywords: Alibaba, Jack Ma, Foresight, New power preparation, Strategic intent

“Never give up. Today is hard, tomorrow will be worse, but the day after tomorrow
will be sunshine.” --Jack Ma

Alibaba Group is described as a mixture of ―retailers like Amazon and eBay,

financial services like PayPal and search engine giants like Google.‖ Founded in
China, Alibaba has emerged as one of the leading e-commerce companies in the

1
Jeongsoo Han is Researcher, School of Business, Yonsei University (e-mail: js3916@gmail.com).
Miyae Kim (corresponding author) is Researcher, School of Business, Sungkyunkwan University
(e-mail: cally0615@skku.edu).
Woo-Hun Rhee is Adjunct Professor, School of Business, Sungkyunkwan University (e-mail:
whr24@hanmail.net)
Minah Lee is Graduate Student, School of Business, Sungkyunkwan University
(e-mail: saymina1007@naver.com).

ACADEMY OF ASIAN BUSINESS REVIEW ISSN: 2384-3454 / 15 / $10.00

Vol. 1, No. 1. June 2015 ⓒ Academy of Asian Business 2015
36 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2015

world. Alibaba Group‘s two most successful businesses, Taobao and Tmall, are
now the most popular C2C and B2C online shopping sites, respectively. More
specifically, Gross Merchandise Volume (GMV) of Taobao and Tmall accounted
for more than 80 percent of the entire C2C and B2C e-commerce in China ($204
billion in 2012). This was much greater than the GMV of Amazon ($86 billion) and
eBay ($67.8 billion) combined. Even after its great success in China in 2012,
Alibaba has shown steady growth of businesses as shown in Figure 1. In 2014,
Alibaba even had the biggest IPO ever at nearly $25 billion in US dollars.

FIGURE 1
Alibaba Global Revenue Growth (unit: billion)

Source: Business Insider

In contrast to the tremendous success Alibaba currently enjoys, its start was very
small. Jack Ma, the founder of Alibaba Group, started Alibaba in his home by
convincing 18 people to offer up their life savings of $60,000 in US dollars. How
did Alibaba manage to turn its humble start into such a great success? Alibaba‘s
success is especially noteworthy because it is rare for companies of developing
nations such as China to become world leading companies in the online business
industry.

The main objective of this case study is to examine key success factors of Alibaba
and to provide valuable implications. To make the analysis more formal and
 A Case Study of Alibaba: Control Your Destiny 37

objective, five stages of competition model (Kim 2005, 2011) was adopted to
analyze Alibaba.

The great success of Alibaba can be mainly attributed to its foresight and
preparation for future opportunities resulting from a coming paradigm shift in the
industry and its strategic intent to make future imaginations real. Jack Ma foresaw
the impact of internet development and the flourishing potential for SMEs (small
and medium-sized enterprises) in China and developed core competence with
strategic intent before he launched Alibaba. When eBay entered the C2C e-
commerce market in China, Alibaba foresaw that eBay would become a big threat
even if the two companies were in different markets. Alibaba then launched Taobao,
an online C2C marketplace, to compete with eBay, which served as a critical
turning point for Alibaba to achieve great success. Alibaba's foresight and
preparation with strategic intent created new markets and enabled it to lead the new
markets.

Alibaba has launched a variety of businesses to help it become the world's leading
e-commerce company based on its foresight for future opportunities as shown in
Figure 2. Among Alibaba's many businesses, its major affiliated entities,
Alibaba.com, Taobao, Alipay, and Tmall.com, are introduced as the milestones of
Alibaba.

Alibaba.com

Alibaba.com, a primary company of Alibaba, is the world‘s largest online B2B

trading platform for SMEs. It provides three main services. First, Alibaba.com, the
company‘s English language portal, handles sales between importers and exporters
from more than 240 countries and regions. Second, 1688.com, the Chinese portal,
handles domestic B2B trade in China. Third, AliExpress.com, a transaction-based
retail website, allows smaller buyers to buy small quantities of goods at wholesale
prices.

Alipay

Launched in 2004, Alipay is a third-party online payment platform with no

transaction fees. Alipay also provides an escrow service, in which buyers can verify
the receipt and quality of the goods they bought before releasing money to the
seller.
38 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2015

FIGURE 2
Milestones of Alibaba Group

Source: U.S. News based on Alibaba and Manhattan Venture Partners

Taobao

Taobao is China's largest C2C online shopping platform. Founded in 2003, it

offers a variety of products for retail sale. In January, 2015, it was the second most
visited website in China. Since Taobao offers free registration and commission-free
transactions using a free third-party payment platform, Alipay, advertising makes
up most of the company's total revenue.

Tmall.com

Introduced in 2008, Tmall.com is an online retail platform to complement the

Taobao C2C marketplace and became a separate business in 2011. Tmall.com
offers global brands to an increasingly affluent Chinese consumer base. As of
October, 2013, it was the eighth most visited web site in China,

This case study of Alibaba will provide significant implications for companies
and business leaders who seek to turn their small starts or hardships into great
successes or turning points.
 A Case Study of Alibaba: Control Your Destiny 39

Framework for Case Analysis- The Five Stages of

Competition Model
In order to more formally analyze the case of Alibaba, the Kim (2005, 2011)‘s
five stages of competition model is brought as a framework for this study. Kim‘s
model shows how world leading companies or leaders turned their humble starts
into great successes with five competition stages which are (1) foresight
competition, (2) new power preparation competition, (3) early market competition,
(4) mainstream market competition, and (5) competition at the top as shown in
Figure 3. The model has been successfully used to provide a strategic guidance to
Asian companies in terms of finding new market opportunities and also to analyze
the cases of great successes in terms of how they go about the major stages of
competition (Kim 2012, 2013).

FIGURE 3
Five Stages of Competition Model

Source: Kim 2005, 2011

The most unique feature of Kim‘s framework is that it emphasizes invisible

competition, foresight competition and new power preparation competition, which
occurs before the launch of a new company or a new product. For example, the
world leading companies or brands such as Apple, Samsung, Nike, Google,
Amazon, etc. were excellent at foreseeing the paradigm shift that could change
40 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2015

everything about the current market in their respective industry and prepare new
power, i.e. core competence, for the new paradigm. On the contrary, Nokia, once
the biggest player in the mobile industry, was not able to successfully foresee the
paradigm shift in the mobile phone industry and prepare accordingly for it. As a
result, Nokia floundered in the new smartphone market and ultimately failed.

As the real business cases show, the foresight and new power preparation
competition are critical stages for companies or leader to soar in (Christensen,
Anthony, and Roth 2004). This case study focuses on how Alibaba used the
foresight and new power preparation competition, the two stages of Kim‘s
framework, to transform its small start into an incredible success.

Jack Ma, the Man of Foresight for Alibaba

Ma rose from humble beginnings to become one of the most respected Chinese
business leaders in less than 20 years. How did a former English teacher who had
not even been exposed to the internet until the end of the 1990s become the
founder of the world's leading e-commerce company, Alibaba? What about Jack
Ma was so special that he became one of the most respected business leaders in the
world? To name a few, vision, foresight, strategic intent, and breakthrough spirits
of leaders are critical factors for companies to succeed. Jack Ma excelled in all of
these essential categories.

Jack Ma’s Vision and Strategic Intent for Future

Alibaba started in Jack Ma‘s home. He gathered 18 people and shared his vision
and strategic intent to conquer the world B2B business in a meeting lasting two
hours. Jack Ma‘s enthusiastic vision for the future motivated them to offer up their
life savings of $60,000 in US dollars. From the start, Jack Ma‘s vision and strategic
intent was future-oriented. From the start, he named the company Alibaba because
he wanted to create a global company. It's easy to spell and people everywhere
recognize it as the ―Open Sesame‖ command to unlock doors to hidden treasures.

Although Alibaba faced considerable difficulties, Jack Ma‘s vision and strategic
intent remained strong as Tina Ju, an investor in Alibaba, stated that ―sentiment
changed at the company by Jack Ma‘s vision of conquering the world in B2B from
 A Case Study of Alibaba: Control Your Destiny 41

nearly going bankrupt. It couldn‘t have been done without the visionary and
spiritual leadership of Jack Ma…Everyone in Alibaba believed in him.‖

Jack Ma‘s vision remained future-oriented and unique even after Alibaba achieved
great success. He said, ―Most companies, when they're doing good, they enjoy
today's wonderful life. They don't worry about five years later—but I worry about
five years later.‖ To further prove this point, when Alibaba had the biggest IPO
ever at nearly US $25 billion, he said, ―We got successful today not because we did
a great job today—we had a dream 15 years ago.‖

When it comes to corporate social responsibility, Jack Ma also had a different

vision. When a group of Chinese people criticized Jack Ma for not donating money
to a devastating earthquake in Sichuan, even when he had already personally
donated over US $100,000, he responded, that ―The major social responsibility of
entrepreneurs in China is not to donate money, but to put their enterprises on the
right track Even if one is rich, one should not be too keen to make a donation …
One should always invest more with more money, snowballing the enterprise into a
much larger corporation and creating a lot more employment opportunities. He
then added,…I am not the sort of person who goes after fame. Money will do.
Without money you cannot assume your social responsibility, cannot pay taxes,
cannot create, and society will not progress.‖ Jack Ma‘s future-oriented vision and
strong strategic intent clearly enabled Alibaba to become the leading e-commerce
company in the world.

Foresight and New Power Preparation

for the Start of Alibaba
Foresight for China’s Internet Development

Jack Ma, a former English teacher, was first exposed to the internet in the mid-
1990s when he was in the U.S. as an interpreter for a Chinese economic delegation.
He searched the word ―China‖ in the portal‘s search engine which gave no results.
Although the internet was not popular in China at that time, he glimpsed the power
of the internet and foresaw the development of the internet in China.
42 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2015

It turned out that Jack Ma‘s foresight for internet development in China was
correct. As shown in Table 1, the number of internet users in China has been
rapidly increasing. In 2000, the number of internet users was about 22 million and
the internet penetration rate in China was only about 1%. In 2014, however, the
number of internet users was about 640 million and the penetration rate was about
46%.

TABLE 1
Growth in Number of Internet User in China

Number of Growth Penetration Country's Share of Global

Year
Internet Users Rate Rate World Internet Users Rank
2014 641,601,070 4% 46.03% 21.97% 1
2013 617,580,000 10% 44.57% 22.77% 1
2012 564,000,000 8% 40.96% 22.39% 1
2011 524,112,635 12% 38.30% 22.96% 1
2010 466,418,762 19% 34.30% 22.80% 1
2009 390,510,543 29% 28.90% 22.11% 1
2008 303,457,569 42% 22.60% 19.31% 1
2007 213,494,961 53% 16.00% 15.55% 2
2006 139,552,413 24% 10.52% 12.03% 2
2005 112,351,599 17% 8.52% 10.93% 2
2004 95,660,250 18% 7.30% 10.51% 2
2003 80,774,236 36% 6.20% 10.37% 2
2002 59,529,170 75% 4.60% 8.98% 2
2001 33,995,803 50% 2.64% 6.79% 3
2000 22,739,300 152% 1.78% 5.50% 4
Source: Internet Live Stats

As the number of internet users in China has been increasing, the size of China's
online shopping market has also been rapidly increasing. As shown in Figure 4, the
size increased by almost 500% in the past five years. The Alibaba Group predicted
the internet development in China and prepared for it. Not only that, the internet
penetration rate in China is only at less than 50%. That is, there is still bigger
potential for the Alibaba Group to soar.
 A Case Study of Alibaba: Control Your Destiny 43

Figure 4
Growth of Online Shopping Market in China

Source: KOTRA and iResearch

Foresight for the Flourish of SMEs in China

After 19 years as China‘s paramount leader, Deng Xiaopeng passed away in 1997.
After over two decades of economic and political reforms by Deng Xiaopeing,
China has developed in many ways. China‘s GDP grew at a 9.5% annual rate and
its economy became the world‘s third largest. Per capita income more than
quadrupled, foreign direct investment boomed and trade also increased. The World
Bank referred to China‘s achievements as ―a tremendous success.‖

Jack Ma foresaw the emergence of SMEs (small and medium-sized enterprises) as

the economy of China developed and the future opportunity of B2B market for the
SMEs. It turned out that small businesses flourished as ideological barriers fell and
the economy of China grew. Registered SMEs in China exceeded 4 million and
contributed to about 60 percent of GDP.
44 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2015

New Power Preparation for Start of Alibaba

After Jack Ma foresaw the future opportunity from the ICT business development
and the flourishing of SMEs in China, he prepared and tried to seize the
opportunity. After he was first exposed to the internet in the U.S. and saw the
power of internet, he left the Chinese economic delegation. Jack Ma then returned
to China, borrowed US $2000, and set up a company called China Pages. The
company was created to help Chinese companies list on the internet and to help
foreigners find the listed Chinese companies. Although Jack Ma felt that China
Pages' vision was on point, the infrastructure in China was not yet ready for online
commerce. He focused on building core competence of helping Chinese SMEs
expand abroad in online B2B industry during the time he was running China Pages.

In 1998, Jack Ma began working for a Chinese government-owned company to

help Chinese companies take up ―electronic commerce.‖ He foresaw the great
opportunity again in Chinese online business and developed core competence in
helping Chinese SMEs connect with buyers. Hamel and Prahald (1991, p81) said,
―Early and consistent investment in what we have called core competencies is one
prerequisite for creating new markets. Corporate imagination and expeditionary
marketing are the keys that unlock these new markets.‖ Jack Ma‘s early and
consistent investment in his core competence created a new market, the online B2B
commerce.

In 1999, to realize his foresightful vision, Jack Ma left the government-owned

company and started his own company, Alibaba, a simple online trading platform
to help Chinese SMEs connect with business buyers. As he envisioned, market
demand grew fast. Alibaba was able to soar and lay a strong basis for the bigger
turning point in the future of Alibaba. Taobao was one of the most critical turning
points for Alibaba‘s tremendous success, not only in China but also in the world
market.
 A Case Study of Alibaba: Control Your Destiny 45

Alibaba’s Turning Point, Foresight and New Power

Preparation for Taobao
With the number of Chinese internet users estimated to be more than 600 million
in 2014, the users have become increasingly tech-savvy and are proactive in using
C2C e-commerce. Taobao of Alibaba has more than 90% of market shares in the
C2C market in China. In addition, Taobao‘s rapid growth displaced once dominant
eBay, the world's largest C2C player. This tremendous success of Taobao was a
major turning point that enabled Alibaba to become the world's leading e-
commerce company. According to Joe Tsai, CFO of Alibaba, ―The B2B business
makes the majority of Alibaba Group‘s revenues, but we see Taobao contributing
significantly going forward.‖ How did Alibaba‘s Taobao achieve such great success
in the face of a powerful competitor, eBay, the strongest global player in the
market? There are two main factors, foresight and new power preparation, as
discussed in detail.

Foresight and Strategic Intent for Launching Taobao

eBay, the world largest C2C marketplace, entered China by investing US $30
million in EachNet in 2002. With eBay‘s investment, EachNet grew in terms of its
market share and revenue. More importantly, with the rapid increase in number of
internet users in China, the market size of C2C e-commerce was getting bigger. In
2003, eBay actively promoted its business in China by rebranding EachNet as eBay
EachNet. At that time, Alibaba was a local Chinese company focusing on B2B to
help small and medium-sized enterprises (SMEs) conduct business online. At that
point, if Alibaba hadn‘t cared about the impact of eBay's entry into C2C on its
business, success could not have been possible. When eBay entered the China
market, Jack Ma foresaw not only the threat of eBay by stating that ―someday,
eBay would come in our direction‖ but also the opportunity in C2C e-commerce at
the same time. Jack Ma showed strong strategic intent to fight eBay. ―eBay grew
strongly. At that time, there were only two companies in China that understood
online marketplaces, eBay and Alibaba. I was particularly concerned that eBay‘s
power sellers would grow their business to compete in the B2B space. In China, the
line between individuals and small businesses is blurry. There are many people
with entrepreneurial ambitions. I needed to stop eBay to protect Alibaba
(Oberholzer-Gee and Wulf 2009, 3p).‖ Finally, the foresight and strategic intent of
Jack Ma led Alibaba to launch Taobao- meaning ―hunting for treasures‖ in Chinese.
46 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2015

New Power Preparation for Taobao to Fight eBay

Alibaba added hard work to the foresight for Taobao‘s launching. In addition,
Taobao focused on preparing new power to differentiate itself from eBay in many
ways. As a part of new power preparation, Taobao built its differentiated core
competences based on two major points, cost-consciousness and importance of
trust between vendors and customers.

Free fees for cost consciousness. According to Porter Erisman, Vice President of
International Corporate Affairs at Alibaba, ―E-commerce was new in China. People
were wary of scams. Chinese consumers were not familiar with online
marketplaces, and merchants were reluctant to sell online without significant
incentives. They wanted the marketplace to be free so they could dip their toes in
the water.‖ Taobao, unlike eBay, did not charge any listing and transaction fees for
sellers. Most interested parties were suspicious about Taobao‘s future. For example,
its competitor eBay criticized that ―Free is not a business model. It speaks volumes
about the strength of eBay‘s business in China that Taobao is unable to charge for
its products.‖ Some people nicknamed Jack Ma as ―Crazy Ma.‖ However, it turned
out that they were wrong; Taobao‘s foresight was right. Taobao started to change
the game. Taobao showed rapid growth with its free listing and transaction fees. As
more and more sellers and customers switched to Taobao from eBay, Taobao
gained momentum to outpace eBay in terms of market shares only two years after
its launch.

Creating trust by introducing Alipay. Since E-commerce was new in China and
Chinese consumers were not familiar with online marketplaces, people were
worried about online scams. Accordingly, creating trust between sellers and
customers was challenging in China. To solve the problem, Taobao introduced
Alipay (meaning ―payment treasure‖ in Chinese), an escrow service.

Alipay was designed to eliminate settlement risk. Using Alipay, customers deposit
payment for an outstanding order in an Alipay account; Alipay informs the seller
when the payment is deposited, and then the seller ships the products. When the
customers inform Alipay about arrival of the products, it releases the payment to
sellers. Figure 5 shows how the system of Alipay works. This Alipay system played
a significant role in creating trust between sellers and customers, which in turn led
to increased transactions in Taobao.
 A Case Study of Alibaba: Control Your Destiny 47

FIGURE 5
System of Alipay

Source: Alipay Webpage

Porter Erisman, Vice President of International Corporate Affairs, once

emphasized the significant role of Alipay in Taobao‘s success. ―Alipay was critical
to Taobao‘s development. Even when buyers see a seller with high ratings, the lack
of trust still creates a big challenge. Alipay eliminates the settlement risk. The
payment mechanism itself is not important. Payment is easy in China. People are
used to wiring money; they can even do it online. But banks cannot address the
settlement risk. This is where Alipay comes in. Now more than 80% of Taobao
transactions rely on Alipay.‖

In 2005, only two years after Taobao‘s start, the winner between Taobao and eBay
was decided. Taobao outpaced eBay in terms of market share as shown in Figure 6.
At the end of 2006, eBay closed its site and entered into a joint venture with Hong
Kong-based Tom Online. After Taobao won the competition with eBay, Jack Ma
revealed his new vision for Taobao. ―The retail infrastructure in China is terrible,
extremely inefficient. Taobao will replace these traditional channels. We are now
building the new Wal-Mart online,‖ he declared. This is the new foresight and
strategic intent for future direction of Taobao.
48 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2015

FIGURE 6
Market Shares of Taobao and eBay in China

*TOM Eachnet was a joint venture that was established between eBay and TOM online in 2006
Source: Company Document

Discussion and Implications

This case study reviewed how Alibaba became a leading e-commerce company in
the world. In order to more formally analyze the case, the Kim‘s five stages of
competition model was borrowed. Our study emphasized the invisible competition,
foresight and new power preparation competition for Alibaba to turn its humble
start into great success. The success story of Alibaba is especially noteworthy since
the start of Alibaba was very meager. How did Alibaba achieve such tremendous
success? The key success factors of Alibaba can be summarized in (1) foresight for
the future opportunities from paradigm shift and (2) preparation for core
competence with strategic intent to seize the opportunities.

Prior to the start of Alibaba, Jack Ma foresaw the paradigm shift of internet
development and the flourishing of SMEs (small and medium-sized enterprises) in
China. Hence, he prepared new power by building core competence and helping
Chinese SMEs connect with buyers online. Without having prepared for the core
 A Case Study of Alibaba: Control Your Destiny 49

competence, the future opportunities identified through his foresight would have
gone into the hands of others. He also showed strong strategic intent to create and
conquer the online B2B commerce industry. This foresight and new power
preparation with strong strategic intent enabled Alibaba to become a leading e-
commerce in the world.

Alibaba showed excellent foresight and new power preparation with strategic
intent even after the start of Alibaba. The foresight and new power preparation
enabled Alibaba to achieve even greater success when eBay, the biggest C2C e-
commerce player, entered the C2C e-commerce market in China. Although eBay
and Alibaba were in different markets, Alibaba foresaw that eBay would become a
big threat. Alibaba then launched Taobao, an online C2C marketplace, in direct
competition with eBay, which became a critical turning point for Alibaba.

This case study of Alibaba reveals the significance of foreseeing and preparing for
a paradigm shift that can change everything in a given industry. Kim et al. (2012,
2014) also claimed that seeing what comes next is one of the most important
factors for companies in turning their humble starts into great successes. Therefore,
this case study of Alibaba will provide significant implications and lessons for
companies and business leaders who seek to turn their small starts or hardships into
successes or turning points. Perhaps the most important lesson is that an ordinary
person can turn his or her destiny into great success by exercising foresight and
preparing for the future.

Future Challenges of Alibaba

As reviewed in this case study, Alibaba has emerged as a leading e-commerce
company in the world through its excellence in foresight and new power
preparation for future opportunities. Despite Alibaba‘s great success, however,
there is some evidence that indicates Alibaba is facing challenges. For example, the
stock price of Alibaba, an obvious indicator of a company's situation, has declined
and become stagnated over time. As shown in Figure 7, although the stock price of
Alibaba increased momentarily after its biggest IPO to US $119.15 in November,
2014, it declined to about US $86 in May 2015.
50 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2015

FIGURE 7
Alibaba’s Stock Price Change

Source: Google Finance

The notable challenges Alibaba is facing now include new competitors with
foresight, Alibaba‘s absence in the global market, and a slowing of Chinese
economic development among many others. As for new competitors, for example,
JD.com which is a Chinese e-commerce company grew sharply while Alibaba still
has been a market leader. Using its own foresight and core competences, JD.com
made strategic alliance with Chinese internet group Tencent in 2014 and rapidly
expanded its business by focusing on small cities. If Alibaba neglects foresightful
competitors like JD.com, even if it is currently a small company, Alibaba may face
big threats in the near future. JD.com may be just one of many small companies
that will have the potential to pose threats to Alibaba‘s future growth.

Another challenge for Alibaba is its absence in the global marketplace. Although
Alibaba has grown quickly into the world‘s largest e-commerce platform, its focus
has remained largely on the Chinese market. China is one of the biggest markets in
the world and Alibaba is the biggest player in the market, but focusing mainly on
the Chinese market may make Alibaba vulnerable to threats such as changes in
business environment and the presence of global competitors. In addition, a
slowdown of Chinese economy is also a challenge for Alibaba. As shown in Figure
8, GDP growth rate shows that economic development in China has been slowing
down than when Alibaba grew its businesses. This will result in decrease of
consumer spending, which would create an unfavorable external environment for
Alibaba.
 A Case Study of Alibaba: Control Your Destiny 51

FIGURE 8
GDP Growth Rate of China (%)

Source: The World Bank

Challenges and hardships come to every company. The crucial matter is how they
work the challenges or hardships into turning points for future growth. As
suggested by the five stages of competition model (Kim 2005, 2011), even the
leading companies that achieved great success should not be complacent, but rather
be vigilant about what‘s coming next in terms of both threats and opportunities;
they should refresh themselves in terms of foresight and new power preparation to
turn challenges or hardships into greater success. Historically, the leading
companies such as Apple, Samsung, Nike, etc. showed excellence at making
turning points from challenges. Now is the time for Alibaba, as the leading e-
commerce company, to predict the unseen challenges in the future and prepare for
them. If Alibaba continuously builds foresight and new power, the future of
Alibaba will be bright even against coming challenges. As Jack Ma once said,
―Never give up. Today is hard, tomorrow will be worse, but the day after tomorrow
will be sunshine,‖ we believe that Alibaba will control their destiny.

(Received June 3, 2015; Revised June 17, 2015; Accepted June 19, 2015)
52 ACADEMY OF ASIAN BUSINESS REVIEW, JUNE 2015

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