A CROCODILE IN YANGTZE RIVER PART-II

The story continues from the part-I , if you have not read the part-I story. Read the story to know completely about Jack Ma and Alibaba.
A Crocodile in Yangtze River Part-I

In March 2000, the Dot com crash happened and investors started to dump technology stocks. Then the Alibaba team also recruited 100 new people and also moved out of the apartment. But Alibaba hasn’t brought even a $1 revenue. The company was going in the wrong direction. Jack was forced to have team meeting for the going turmoil. Then moved his operation to united states. But the move only worsened chaos in the company. US and china fought for territory and Alibaba became a two headed monster and within a couple of months jack reversed the decision. By 2001 the internet companies were burning in flames and many companies started to lay off staffs. In Alibaba the situation were the same as other companies they stopped their operation in other countries and brought back its operation to china and they also ran out of money which was raised from investors.

ALIBABA REVENUE

Customers were ready for paying a paid membership for keeping their company name at top of the list in Alibaba website. So after a year Alibaba started to make revenue. Then after it was not the old Alibaba team but was a new confident and re-energized team. As everyone were happy there occurs a new problem, a person in Alibaba was diagnosed with SARS. So the headquarters were shut down. To keep the website running 400 staffs took the computer home and set up a virtual operation. After some weeks the staff was cured from the hospital. So Alibaba can open its headquarters. But the real problem occurs now only which make the other problems seem minor and Alibaba has to face the biggest challenge.

ALIBABA VS EBAY

Now they have to go against a competitor with immense size and unlimited resources. Now they have to fight against eBay. EBay was a global market place and it was operated in 150 countries. EBay has bought a large stake in eachnet.com which is a clone of eBay in china which worried jack a lot. EBay will pose a major threat to the Alibaba’s core business. Jack has thought of new idea, he created a team and sent it to the apartment and others were in the headquarters. After a few months of hard work, they launched their new company called TAOBAO which means search for treasures. As jack feared eBay came to china by buying rest of the shares of eachnet and also invested $150 million in the company. At that time eBay had a 95% share in the market. So jack didn’t charge anything to the customers for 3 years because the market was just developing. Jack got an idea to beat eBay by using gorilla strategy which to declare war publically on eBay so that media coverage would go for Taobao which would destroy the eBay’s idea of advertising campaign. But there some ground rules for that there should be no personal attacks on eBay’s CEO and should not bring the nationalism kind of things in arguing. At the same time they have to argue that eBay is not correct for the china’s market. So both companies were concentrating on developing their websites. EBay thought of linking with china websites to their global platform which were discontinuing features among Chinese while Taobao was concentrating on customized website for the china market. The website included some features such as live chat and message boards which would encourage users to build relationships among members. As the battle entered the 2005 these two companies were in neck to neck, at that time eBay made another $100 million investment in the company but the company stock continues to fall down. Now yahoo has announced to pay a billion dollars in cash for 40% stake in company which was a real challenge to eBay. Alibaba also took yahoo china’s operation. Then the yahoo’s china team came to visit the alibaba’s team but both the teams were not mixing well. With yahoo’s money they made advertising campaign which made taobao numbers surpass eBay. In 2006 there was news which said eBay is expected to close its auction site in china. On September 2014 Alibaba went for the IPO which was the biggest IPO in US history. 

  What can we learn from this story?

1. Use the resources which we have.

2. Wait for the correct time and it will be worthfull.
3. Believe in yourself.