Case Study: Alibaba as a conglomerate?

Question 1

Why does Alibaba look like a conglomerate?

Answer 1

• Mobile commerce: Taobao marketplace
• Logistics: Cainiao network
• Finance: ANT financial services group

Question 2

Why is Alibaba not a conglomerate?

Answer 2

it’s all about platforms
Alibaba operates in a “two-sided” market (trading platform attracts buyers and sellers)
• Both buyers and sellers pay (usually different amounts, depending on the exact platform)

Question 3

Why so many unrelated businesses?

Answer 3

Mutually reinforcing, almost like total ownership of the value chain without making/owning (most) of the “goods”.
• It’s one giant ecosystem system (the payments, the logistics etc)
• Increasing the “network effect”