How Does Alibaba Make Money?

"In 2002,

"A good business model must be simple. The current business model of Alibaba is simple, that is, to collect membership fees.

Ma Yun achieved his original goal in 3 years.

According to the data disclosed by Alibaba, in 2004, Alibaba's net profit was 600 million yuan.

However, Ma is still reluctant to talk about its business model, afraid of revealing the real situation of revenue.

The members of the Alibaba are divided into two types, one is a Chinese supplier and the other is a trustworthy member.

The "China supplier" service mainly deals with export oriented enterprises, relying on the online trading community, and recommends China's export suppliers to international buyers through e-commerce, so as to help export suppliers obtain international orders.

Its services include an independent "Chinese supplier" account and password, and the establishment of an English website to enable more than 42 professional buyers in 220 countries to browse the business online.

At present, the membership fee of Chinese suppliers is 60 thousand -8 yuan / year.

"Trustworthiness" is more targeted at domestic trade, through the evaluation of the third parties to the registered members, as well as the paction integrity records in Alibaba, to help "trustworthy" members get the trust of the buyers.

The membership fee of integrity is 2300 yuan / year.

According to Alibaba's own disclosure, as of May 2005, there were 1 Chinese suppliers registered by Alibaba, and nearly 10 registered users were registered through the Alibaba. (by the end of 2004, the number of Chinese suppliers on Alibaba was more than 8000, while Cheng Xin Tong's membership was 6 000).

According to this estimate, the annual revenue of Alibaba should be close to 1 billion yuan (of which the annual membership fee is 230 million yuan, and the annual membership fee of Chinese suppliers is 800 million yuan).

Chinese suppliers and integrity members are not only easy to get buyers' trust, but also have the right of giving priority to corporate information so that customers can find companies faster.

"The key is that Alibaba must ensure that the online identity of the company is in line with its true identity and establish a sound credit evaluation system so that everyone can make money in a mutually trusted environment.

"Ma Yun said.

There are 5 ways to ensure good faith, that is, the third party certification (enterprise credit investigation agencies provide credit certification, including the legal registration records of business departments, business authorization, etc.); certificates and honors under the network; Alibaba activity records; members evaluation; credit reference persons.

"Ma said," the main problem to be solved in China's e-commerce is credit. The whole system is to ensure the integrity of the problem.

"

According to the data provided by Alibaba, in addition to paid Chinese suppliers and trustworthiness members, Alibaba also has 480 000 free Chinese merchants and 1000 overseas merchants. The total value of products exported through Alibaba last year is 10 billion US dollars, taking Yongkang region of Zhejiang as an example (the largest supplier of scooters in the world), and 70% of local enterprises are exported through Alibaba. Many of them export more than ten million dollars.

"When so many people can make money through Alibaba, Alibaba should earn some small money, too.

"In 2002, Alibaba is looking for the future of Ma Yun.

As for whether Alibaba will be listed to melt more money, in 2004, Ma told the * * * that "Alibaba has to earn at least 1 billion yuan a year to go public."

"

"Alibaba's business has no policy risks such as MMS and online games, and exports are industries encouraged by the state. Alibaba listing can get higher price earnings ratio than Sina and Shanda.

Softbank China, a former executive evaluation.

At present, Sina's market profit is about 30 times, and the price earnings ratio between Shanda and NetEase is 35 times.

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Free Taobao enclosure

Alibaba's profits in B2B make it able to afford a "child" who currently spends money, namely Taobao's C2C website.

"Taobao is a child, although there is room for development, what is important now is nurturing.

"Ma Yun said so.

Alibaba founded Taobao in 2003. In July of that year, it injected 100 million yuan into Taobao, and announced another 350 million yuan injection to Taobao in July 2004.

In China's C2C market, Taobao's rival eBay appears to be more wealthy.

In March 2002, eBay injected $30 million into eBay and set up eBay eBay; in July 2003, eBay invested $150 million in eBay eBay again.

The charges of C2C website mainly include paction fee (including registration fee, paction fee, base price setting fee, pre-sale set up fee, extra paction fee, security payment fee, online shop fee), special service charge (including font function fee, picture function fee, recommendation function fee), value-added service fee (information release fee, auxiliary information fee), and network advertisement.

The profit mode of eBay eBay is to charge users for shop fees, goods login fees, paction service fees and so on.

The average monthly rental fee of the general store was 50 yuan / month, which was reduced to 35 yuan / month in May last year. The commodity landing fee is different from the commodity category and the price. The least expensive registration fee is 0.8 yuan, while the more expensive items, such as automobiles, motorcycles, and more than 2000 yuan, are about 8 yuan.

"To compete with world-class competitors can show their strength.

"Ma Yun said.

And his way of showing strength is Taobao's free strategy.

At present, Taobao is free to all merchants. Ma said, "Taobao does not charge for 3 years.

China's C2C market is still in the stage of market cultivation, and free mode is more conducive to horse racing.

"

Can Ma Yun's free strategy circle?

According to iResearch's 2004 annual survey report, 9 million 500 thousand of the registered users of eBay eBay in China's online auction market, the registration fee of Taobao online is 4 million, the number of registered users is about 400 thousand, and the number of registered users of other auction sites is about 100 thousand.

The report also showed that in 2004, China's online auction market had a total turnover of about 42 million 500 thousand commodities, with a turnover rate of about 40%, with a total turnover of about 17 million, with a turnover of 3 billion 400 million yuan.

The turnover of eBay eBay is about 2 billion 200 million yuan, and the turnover of Taobao is about 1 billion yuan.

According to the data provided by Taobao, in the first quarter of 2005, the turnover of Taobao was 1 billion 20 million yuan, and the turnover of eBay was $100 million, and Taobao was defeated for the first time.

"In addition to the localization services provided by Taobao, it is also related to Taobao's free policy.

"Ma Yun explains why Taobao is coming from behind.

"In order to escape the eBay eBay paction fees, some users did not use the eBay eBay express payment after finding the goods needed by eBay eBay, but chose Taobao Alipay, which made some eBay eBay users actually become Taobao users.

"A Alibaba employee said.

Alipay is a secure payment service launched by Alibaba under Alipay's online paction. Alipay as a credit intermediary, temporarily secured the money for the buyer and the seller before the buyer confirmed receipt of the goods.

According to the data provided by Taobao, as of February 24, 2005, 79% of Taobao's online merchandise pactions were accepted through Alipay trading.

Taobao's free mode today is the replication of Alibaba mode.

The Alibaba experienced a 3 year free period before charging.

Ma Yun said: "at that time, Alibaba spent money on investors. In the heart there was only confidence in the bright future. Part of Taobao's money now came from Alibaba's profits, and the other part also came from investors. It was also based on confidence in the future because Alibaba was an example.

"

"Taobao will continue to insist on free. Now it is still time to collect money, or when it is a horse drawn enclosure, Alibaba is not in a hurry.

"Ma Yun said.