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Background of Alibaba

Alibaba background

This site has an interesting history of creation. Its founder Ma Yun, better known as Jack Ma, only got acquainted with computers and the Internet in 1995. An ambitious English teacher decided to give it a try. He raised the capital for the first software with a friend and wife. This is how Ma Yun created the Chinese Yellow Pages.
Success came to software after three years. The app earned its creator about $ 800,000.
For his success in this industry, Ma Yun became the head of China International Electronic Commerce Center. However, after only one year in office, Ma Yun decided to pursue a more ambitious idea.
Together with 17 friends, Jack Ma raised a start-up capital in the region of $ 60,000 and in 1999 the Alibaba.com web application appeared in the world.
The original purpose of the app is to facilitate procurement for small and medium businesses But seeing the potential of the software he created, Ma Yun soon set a more ambitious mission for the company:
Create conditions to simplify doing business anywhere in the world.
Further development of the software allowed Alibaba.com to not only become one of the serious competitors for the US eBay application. Alibaba.com was also able to expand the sphere of interaction not only with all types of business (from small to multinational), but also to sell goods at retail to everyone.
This expansion became possible due to the creation of additional platforms that are known to every lover of online shopping:
  • Tmall
  • AliExpress.com
  • Lingshoutong
And many more applications. The founder of Alibaba.com didn't stop at creating online selling apps. Alibaba.com's software creation allowed him to earn and establish other regional applications:
  • food delivery;
  • payment for goods;
  • electronic cards;
  • tourism;
  • browser for mobile devices.
And other applications that made the information and electronic market of China and neighboring countries of the East independent subjects of the economy. Alibaba.com continues to be the global leader in wholesale and retail sales today. Thanks to constant updates and additions, the application created in 1999 continues to be convenient for users around the world. The app's total profit in 2019 was $ 853 billion.

How an app like Alibaba makes money

How an app like alibaba makes money

Alibaba.com over the years of its existence was able to become a software that provides trade in almost all the necessary marketing interaction systems: B2B, B2C, C2C, C2B, O2O. This gives it a wide audience of buyers and sellers. Thus, the monetization of Alibaba.com is built from the following elements:
  • Retail. Buyers pay through Alipay (a payment system designed to facilitate and transparent transactions on the Alibaba.com site system). For retail purchases, the buyer must agree with the seller. In order to sell goods at retail, an application was created based on Alibaba.com, which cooperates with many brands - Aliexpress.
  • Wholesale. This function is carried out by the B2B system. Any entrepreneur can order goods and receive wholesale delivery to their store.
  • Logistic delivery. Since the application specializes in delivery, its creators have expanded this function and established delivery between suppliers. Two sellers registered on Alibaba.com can send goods to each other using the company's logistics routes.
  • Supplier membership. The difference between Alibaba.com and the competition is the free opportunity to post up to 50 product cards to sellers. When this opportunity ends, the seller is invited to switch to the membership of gold suppliers. Gold membership contains three types of subscription: basic, standard, premium. The more expensive the subscription, the more benefits and marketing tools the seller gets.
  • Tools for sellers. A new app created for Alibaba.com, Wangpu, is a set of tools that help merchants improve their storefront. This toolkit is paid for, however, it has availability levels depending on the type of subscription.
  • Marketing. At the time of 2020, there are about 10 million active sellers based on the application. This creates intense competition. To help sellers, Alibaba.com includes in-app search auctions (that is, sellers can participate in an auction to be in the top spot when using elastic or category searches). Sellers can also buy in-app ads (banners, inserts, etc.).
  • Advanced statistics and analytics. Alibaba.com software keeps track of statistics for various categories. If a seller wants to get more data about their products, interactions with them, trends in their category of products, etc. - all this he can purchase for an additional fee.
This monetization scheme allows Alibaba.com to remain one of the progressive and sought-after online selling apps in the world.

How does Alibaba app work

How the alibaba app works

Alibaba.com is a wholesale service that works directly with manufacturers.
This allows the resource to offer the lowest prices for wholesale purchases (or retail) for entrepreneurs and individuals. Therefore, the review of the operation of the software should be done from two positions: the seller and the buyer.
Seller:
  • When registering, the seller must confirm his identity, provide contacts and provide the business address of his office.
  • When registering, the seller must provide information about his company: upload identity documents or provide information about the location and method of deposit.
  • When registering in the application, the seller needs to determine his niche of goods by choosing one of 40 categories.
  • When adding a new item, the seller must follow a clear listing structure so that it is easier for buyers to find the item and study it to make a purchasing decision. This list consists of the following items:
  1. Name of product;
  2. Product photos (preferably several from different angles);
  3. Detailed product description;
  4. Keywords for search by category and flexible search settings;
  5. Description of the terms of payment.
  • Product management. Sellers can indicate products that they do not yet have in stock (for example, they make a product to order). This feature helps sellers keep track of demand.
  • Sellers manage orders, collect information about them, set a delivery status (in assembly, in transit, delivered). They can cancel the order if necessary.
  • Thanks to the chat system, buyers and sellers communicate with each other and can send each other photos and other files to facilitate the delivery of goods;
  • Every seller receives reports. The level of detail in the reports depends on the type of merchant subscription;
  • After filling in 50 free product cards, the seller must switch to a gold membership and choose the type of subscription by which he can interact with the platform and buyers (more features, customer coverage, statistics, etc.).
Customer:
  • Registration is faster and easier. All the software requires from the buyer is to confirm the email address and come up with a password.
  • Buyers can change passwords and maintain account management. They can also hide their personal information from sellers. Buyers can open information about themselves for those entrepreneurs with whom they have already cooperated.
  • Buying a product is a process that looks like a set of tools for the buyer, allowing him to search for the desired product, study it and place orders.
  • Before buying, the seller and the buyer always start a dialogue. This is necessary to clarify the details, discuss the nuances of the transaction and reduce cases of cancellation of the transaction.
  • The buyer can add items to the “wish list”. Within this list, the user can manage the quantity of goods, track price changes and buy at once all the goods that are on the “wish list”.
  • Payment for the buyer is possible in several ways: by credit and debit card, through an internal payment system, through other payment systems. The buyer can take a loan from the application to purchase goods (up to $ 150,000).
  • The buyer can see the seller's rating and reviews of other buyers about the goods and the seller;
  • A notification system informs buyers about Alibaba.com hot news, purchase notifications, price changes, shipping, and more.
  • The dispute function is the protection of the buyer in the event that the goods arrived damaged, defective or defective. Buyer and Seller have 30 days to negotiate without Alibaba.com intervention. However, on day 4, the buyer can already contact the platform.
  • The technical support service serves both buyers and sellers. Starting from possible problems with the site, ending with disputes that may arise between buyers and sellers.
Such technical equipment allows the application to be close to its audience.

Core features of the Alibaba app

Main functions of alibaba app

The functions of the Alibaba.com app can be divided into several categories:
Basic functions - found in most applications like Alibaba.com:
  • Registration algorithm;
  • The presence of a registered profile and its status (buyer or seller);
  • Product catalog (product database with a template field);
  • Cloud storage;
  • Search by software;
  • In-app payment (payment gateway);
  • Checkout (template questionnaires);
  • Reviews under the product card from buyers.
These functions are already basic by 2020. Consumers are expected to meet them in any online store.
Advanced features are added to the application gradually. Their availability largely depends on the budget of the software being developed:
  • Live chat. It can be done in two ways: chat with the help of a support employee and with the participation of AI (Artificial Intelligence). AI is useful when users ask standard questions. When AI answers standardized questions, it takes the workload off humans and allows them to work more closely with the original queries.
  • Notifications. Remind buyers of the platform and tell the most relevant app news - these actions increase the likelihood of earning for the platform and stimulate audience interest.
  • Integration with social networks. Often, people do not want to remember a lot of passwords and create the same type of accounts everywhere. Integration with social networks solves this problem. It allows not only to remove the need for registration, but also gives more information about a person and his needs;
  • Search filters. The better the in-app search is configured, the more chances the customer will find the item they need and make a purchase. Elastic search together with a system of filters by categories will help the user to find what he wants faster. And the introduction of keywords will make the search process even easier.
  • Recommendations system. It is formed thanks to AI and collected statistics about the movement of a particular account on the site. This allows you to form recommendations for the product and increase the chance of a deal.
  • Loyalty program. Marketing tools that promote the brand idea and increase the number of sales. They inspire confidence in the app brand and guarantee a customer return.
  • Monitoring the delivery of goods. Buyers have more confidence in the application when they can understand exactly where the ordered and paid goods are located and when they will be with them. Such a system requires established logistics and the creation of a code system, which is noted at different stages of delivery. The marked code automatically reflects information about the product to the user's account.
  • SEO. An optimization tool that allows the application to appear among the first in search queries in various browsers. It is based on elastic search, as well as the use of keywords and their consolidation in search engines.
These functions are not the limit of software development in the field of sales of goods. Oftentimes, a just-created application can become competitive with unique features and a new approach to the business model.

Success factors of Alibaba's business model

Alibaba business model success factors

Much of the success factor for Alibaba.com is its unique business model. The following elements of the business model are unique:
  • Alibaba.com's main cooperation is small and medium business. This allows a variety of products to be provided to buyers and frees up production forces for entrepreneurs (finding a buyer, marketing, logistics, etc. become functions that Alibaba.com helps). It also supports small and medium-sized businesses, allowing everyone to compete with each other and implementing a government program to support entrepreneurship in a number of countries (which allowed Alibaba.com to become a cross-regional application);
  • Unconventional profit model. Alibaba.com charges fees for marketing tools and technical support. Alibaba.com derives most of its profits from in-house ad inserts, category and keyword auctions. Another equally profitable service is the paid provision of data on customer behavior to sellers and extended statistical information.
  • Security. This criterion applies both to the control and monitoring of sellers, and the creation of a transparent transaction system. The application does not charge interest for transactions between buyers and sellers (only in exceptional cases). This allows you to set minimum prices for the goods and get the maximum benefit for both buyers and sellers. Such a system became possible with the creation of the Alipay payment system.
  • The responsiveness of the support team. For any questions, Alibaba.com support is ready to answer users, which builds trust in the platform.
  • Responding to business opportunities. Alibaba.com has a reputation for being an app that is constantly looking for the best solutions for its users. At the moment, there are about 29 applications, which provide easy integration with each other and make the process of shopping for various goods and services easier, better quality and more reliable.
  • Projects of new transaction models. The software is famous for the wide range of payment options it offers. However, Alibaba.com strives to create even more payment options between the seller and the buyer by creating various projects. For example, the Online-to-Offline (O2O) project - sales are carried out through the collaboration of online and offline sales.
  • Integration into various business areas. As already pointed out, Alibaba.com has about 29 applications in various business areas. They are designed to make it easier for as many entrepreneurs as possible to do business and create a positive experience for buyers from cooperation with different firms.
All these key points have made Alibaba.com not only a market leader, but also an application in which investors are ready to invest and support the government.

Top KPIs for Alibaba

Best KPIs for alibaba

The company's CEO Daniel Zhang Yong says KPIs are not Alibaba.com's goal (and if it were, the app has long since lost its leading position). However, statistics and data collection is one of the key revenues of the company. KPIs for software like Alibaba.com include:
  • Visit traffic - measuring application traffic at a certain time, gives information about: on which tab the concentration of users; at what point was the exit from the software; what was most often viewed before buying, etc.;
  • Conversion rate and conversion in sales - these indicators reflect the percentage of visitors who made a purchase to the total number of all visitors;
  • Segmentation of demanded and unnecessary goods. Required for shops, both online and offline. It is calculated in order to understand which products are the most popular and are in consumer demand, and which ones have not been bought for a long time. This allows you to increase the number of in-demand goods and reduce unnecessary ones, easing the logistical burden on storage and removing the need for unjustified purchases;
  • ROI is a financial indicator of the return on investment in advertising. If it is covered by the incoming profit and attracts a new audience, then investment in advertising is effective;
  • Refusals from the product - the indicator gives an understanding of how many people leave the product card when all indicators indicated that a purchase should have been made;
  • Abandoned cart is an indicator of how many items the customer added to the cart for a subsequent purchase, but never bought. Often, such an action indicates that the customer is waiting for discounts on the item saved in the cart. Or the product is thrown in the cart because the customer found a better / better option. This indicator is important in that it reflects how many customers postpone their purchase, which categories of goods find themselves in an abandoned cart most often, etc .;
  • Average check is an indicator reflecting the average amount of money spent on a purchase. This information gives an understanding of what price is acceptable for consumers and allows you to build an up-to-date pricing policy;
  • Customer returns - statistics of those customers who returned again and made repeated purchases;
  • LTV - the value of each customer, reflects the total amount that the buyer spent for all purchases in the online store;
  • CTR - the ratio of the number of ad impressions with clicks on it.
All of the listed indicators are key, however, different applications for the sale of goods and services may have their own set of KPIs.

How to start an app like Alibaba

How to run an app like alibaba

What sets Alibaba.com apart from its competitors is that it cares more about the functionality of the app rather than enabling sellers and buyers to find each other.
The benchmark for Alibaba.com is web-based business transactions.
Considering the entire review of Alibaba.com's working methods, it can be concluded that an application is similar in functionality, should begin its development by defining the following criteria:
  • Hosting an application on multiple platforms: web application, mobile, Android, iOS. The choice on which platform to stop is for the person who decided to launch such an application. However, according to the data collected by Alibaba.com, the largest number of users visited them using the Android-based application.
  • Collecting a technology stack. It is necessary to decide on a set of tools that will interact with users and carry out the work of the site: chats, product cards, cloud storage, etc.
  • Support. Online selling software needs to take care of support in the event of a large number of customers arriving and starting a stream of comments, questions in chats and technical service. This entire system requires reliable technological equipment for full operation.
  • Search for goods. Alibaba.com acts as a marketplace for sellers to populate the site with products. This makes it easier for software to find and populate an application, freeing up team time to improve the platform itself. However, this is a concept of how Alibaba.com works, and similar applications can use other methods of finding and populating software products.
  • Design. The design should be simple and intuitive.
All of these criteria are basic components that must be met and involve many technical stack tools. If the application being created contains a unique idea, then the person who wants to create this application must follow the following steps:
  • Answer questions about the mission of the application and for whom it is being created;
  • Collect business information;
  • Form the desired functionality and type of application;
  • Find an experienced development team who is able to offer a unique solution for the development proposal.

Alibaba's target audience

Alibaba target audience

The target audience of Alibaba.com is formed from interaction with the B2B system. This means that they support the turnover of business for business. Less often they cooperate with B2C (interaction between a business and an individual).
The first question anyone who wants to create such an application should ask is the question of the mission and for whom it is being created.
If a person decides to create software for the same target audience, he must think over a system of interaction that is beneficial primarily to both sides of the business.
If a person is more attracted to the B2C system, then buyers and their comfort become a key element in his application.
There are a number of other systems that can be applied to the application. The correctly formulated mission of the application will help to determine which system is needed.

Technology stack for an app like Alibaba

A technology stack for an application like alibaba

Alibaba.com contains about 29 applications that work on various systems (B2B, B2C, C2C, etc.). To establish such work, you need a huge toolkit used when programming the application.
If we focus only on the stack overview for the first two systems, for example, Alibaba.com and AliExpress, we get the following set:
  • Model-View-Controller - A scheme for dividing application data into three categories: model, view, and controller. This division allows you to sort the information that buyers, sellers and administrators can see.
  • Electronic portfolio - allows you to create an account and track its progress within the application. Watch account reviews, information replenishment, avatar change, etc.
  • Payment gateways. This is a generalized concept of different payment methods and systems that can be applied on the site for the convenience of the buyer paying without leaving the site.
  • Elastic search. Allows you to navigate the application and quickly find the necessary information for any user. An addition to this tool can be a system for selecting the desired category (settings for an accurate search by category, popularity of products, etc.).
  • Cloud services. These services store all the information that happens in the software and support its operation in terms of exchanging, managing and retrieving data.
  • API is an application integration tool (the way one program interacts with another).
  • Content Delivery Network - allows you to support communication and file sharing between users.
  • AI (artificial intelligence). Facilitates the collection of statistical data, maintains and implements the work of chat bots, pushes the necessary advertising to a certain user, forms ratings, etc.
The main technical stacks for online selling software are application support, information storage, account communication, and tracking of actions during use.

Other apps like apps like Alibaba

Other apps like alibaba

In order to form a unique application, it is necessary to study the features of other applications. It is worth referring to the two compiled tops of applications:
  • Popular applications of wholesale and retail trade:
  1. Alibaba.com - Allows merchants to sign up for free with no transaction fees. Receives payment from advertising, marketing tools and subscriptions.
  2. Amazon - The main income comes from retail, subscriptions and web services contained in the application.
  3. eBay - takes a fee for using the platform, conducts auctions for goods, carries out paid promotion of categories of goods within the platform.
  • Popular B2B applications:
  1. Alibaba.com
  2. Bizbilla
  3. Chinabrands
  4. EC21
  5. eWorldTrade
And many other applications that sell in their own country.
Voice purchases. This technology is already known, but only now it is starting to gain popularity. Its essence is that a person tells the application what goods he needs, places and pays for the order. The buyer only has to wait for delivery. This feature is popular among smart speaker owners. This reflects the need for online sales applications to think through a mechanism for integrating with voice devices.
Tight integration with social networks. With the advent of the “buy” button in a number of popular social networks, stores can now find their audience in crowded places. Therefore, if you do not create integration of the software with social networks, then the application may receive less profit;
Augmented reality technologies. The ability to see a thing before buying in augmented reality mode was massively introduced by such a brand as IKEA. However, the use of augmented reality plans to introduce many other multinational trading companies so that a person has the opportunity not only to see photographs of the product, but also to view it from all sides.
After the first wave of the COVID-2019 virus, these trends are becoming increasingly relevant and popular among those platforms that are already using the described technologies.

How to build custom app like Alibaba

How to create custom apps like alibaba

There are two ways to create an app like Alibaba.com:
  • use a ready-made solution;
  • find a development team and build an app from scratch.
A ready-made solution is in many ways suitable for those who want to try their hand and test the idea for viability. Also, applications with ready-made solutions charge a fee for using their system and do not allow them to make necessary updates (after all, you need updates, not their site).
An individual site will allow you to realize any idea. The Exceed Team's experience in developing a custom website with an experienced development team will keep your idea safe. Also, the involvement of an experienced team will allow you to smoothly implement all the stages necessary to create a website:
  1. Planning software architecture. This function is built by specialists based on business data, which was selected by a client who wants to create an application. This is where the formation of what functions are needed in the application and which will be superfluous; what wishes the client has for the program developers, etc.
  2. Early scheduling of the application. The development team of the program describes exactly what manipulations they need to do to establish the work of the described project and in what time frame.
  3. Development of the first version of the application. You can call this stage “pen breakdown”, when the work of the already created application features is being studied, but the general plan has not yet been completed.
  4. Quality assurance and application test. This point is pre-final, when the application passes various tests and all possible problems are identified before putting it into operation.
  5. Delivery of the application and launching its work. The application is ready and able to withstand the influx of users and easily carry out all the functions created in it.

Cost to build app like Alibaba

The cost of building apps like alibaba

The cost of building software like Alibaba.com is made up of the following factors:
  • Country of the development team. This factor affects the value for money. There are teams from different countries that are ready to take on your application, but before that, study the team's portfolio and reviews of products produced by programmers;
  • Platform selection. Web applications, mobile applications, Android and iOS - the choice on which basis to create an application is up to you. However, following market research, a popular choice is to create such a duo: web app and Android.
  • The volume of technological stacks. The more you want to put tooling in your application, the more expensive it will be.
  • Development time. This factor can be important if you decide to create a project in part or contact freelancers. It is possible to pay in full for all the nuances of development, meet deadlines and not be afraid of additional payment requirements if you have contacted the development teams.
Teams from China and Russia are considered the most budgetary and high-quality software developers. Teams from the United States are considered the highest quality in existence, but they ask for their services the most in the world (from $ 30,000 to $ 200,000).
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Igor Teterevlyov
Igor TeterevlyovHead of Sales Department
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