Case Analysis of “Alibaba and the 2,236 cyber thieves

Case Analysis of “Alibaba and the 2,236 cyber thieves
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Case Analysis of “Alibaba and the 2,236 cyber thieves
Electronic commerce, commonly known as e-commerce involves the transaction of information via the internet. This process enables businesses and consumers to comfortably buy and sell goods and services which cannot be possible due to geographical limitation or cost of the middleman. E-commerce has become the most convenient means of trading and one of the leading players in this industry is Alibaba.
Alibaba is an online portal that connects manufacturers to various businesses all over the world which was founded in 1999 by Jack Ma. Alibaba has since become an overnight success as it connects both consumers to consumers through its Taobao.com platform and businesses to the consumer through it Tmail.com platform (Indvik, 2012). Its innovative strategies allow users to register on its online shop using ID and debiting or crediting funds in these accounts on its Alipay program (Indvik, 2012).
Alibaba launched its B2B marketplace in 1999 investing $ 60,000 as a team of 18 people led by Jack Ma. Alibaba was established to assist Chinese companies to connect with other business all over the world. Alibaba platform targeted companies in Europe, the US who wanted to buy from low-cost manufacture in China and other Asian countries (Marinova, 2017). Since buyers were small companies who could not cover for costs of traveling and other manufacturing-related costs, most of them preferred using Alibaba service which was free after using an ID to set up an online shop (Marinova, 2017).
With time, many businesses have turned to Alibaba for their transaction enabling the company to take control of eighty percent of China e-commerce market. However, with all the success, the company has faced several challenges. Having been operating in a country rife with fraud, its growth has stagnated, more than 56 million people using its business to business website Tmail and 370milion using Taobao, it’s online mail was affected by online fraud (Ramzy, 2011). There is an increased prevalence of faking orders known as sales brushing on Taobao. Professional brushers, include those who place fake orders to assist merchants to increase their sales volume. Brushing is a process that involves paying those who pretend to be customers to write positive reviews in order to increase vendor’s online presence in various marketplaces (Ramzy, 2011).
Brushing activities on Alibaba were first noted in 2009 and the company set up a compensation fund paying out buyers, however, more claims became inevitable as it almost damaged the company's reputation to find reliable Chinese suppliers and buyers online. The scandal generated conflicting reactions from stakeholders (Ramzy, 2011). The company has since changed the way of conducting its global business based on its fast growth by developing a unique business model; there are several factors that will contribute to the success of its unique model especially from most western companies as it expands to the rest of the world.
Normally traders using these sites and pay for a fee and submit to third-party checking to ensure that buyers feel secure; hence...