As a free number I have been using Alibaba for two years. Alibaba is unique B2B portal and no wonder it has emerged into Global marketplace and #1 ranked site on search engines. This could not have happened without the excellent service provided by the technical staff and customer service, It has nice user interface , excellent product listing system, businessman friendly trade manager, IP notification for email etc. There are issues as well e.g. scams, lots of people losing their money due to fraudsters disguised as legitimate members, very high fees for Gold membership, it’s Chinese centric and others sometimes feel left out. Challenge for Alibaba is how to stick to its **** business but still grow at reasonable rate while tapping into vast opportunities at internet commerce.
However Alibaba can evolve and take it to next level.
· Introduce a Silver, Bronze membership
Right now difference between free and paid membership is 0$ and 3000$. That’s huge difference! There is need for few intermediate membership types (let’s us call it Silver membership,10-20$/month) where members has few more privileges than free members but still significantly less than Gold members. Services like Escrow and Verified member status can be provided to Silver members.
· Introduce a robust Fraud Detection System
Although Alibaba has done very good job of informing new buyers in this regard . It can never be over emphasized that there is big room for improvement in this area. The more Alibaba works in this direction, the less it is. Let us say for a modest fee of 10-15$, any member of Alibaba can initiate a inquiry checking the status of seller.
In Alibaba Fraud Detection System each seller will be associated with unique set of verified metrics. The metrics should include age of the account with Alibaba, number of escrow and non-escrow transactions, certifications, number of reviews, verified physical address, company hierarchy, telephone numbers, domain name and age etc, visible as a report at buyers dashboard.
In order to perform these verifications Alibaba can deploy a representative/agent in all major trading nations and regions for example in China, USA, India, UK, Thailand, Germany, Korea, Singapore , Japan, Brazil, Turkey, Pakistan, Russia, Africa and other.
Designate a single verification company to verify sellers as well as buyers in that country(if Alibaba doesn’t want to get involved in that business). This will brings the cost of verification down and volume of the service users will make up for the revenues.
Create a searchable database of fraudulent companies and individuals. Right now there is no centralized searchable database based upon name, country, city, type of business, website, email and phone numbers etc.
· Build user’s review system
Lots of Alibaba users have suggested this and it is probably already in the works!
Important is a review system where authenticity of the reviewers’ can be determined, by their IP, website, business address by Alibaba but not disclosed to general public due to confidentiality.
· Increase Escrow coverage Even though escrow system is not perfect but it still has worth. Right now only , Hong Kong and are covered by Escrow service from Alibaba. This is detrimental for suppliers from other countries which left out from competition when buyers prefer escrow, There is need to cover additional countries as well that will boost Alibaba penetration in international markets.
· Take care of small Guy There are significant number of small and medium size enterprises (SMB) who want to do business with suppliers in and other countries using Alibaba. These are also the biggest victims of fraud. Improving and extending safety net to these buyers and charging a fee based on transactions Alibaba can tap into market which has great potential for growth even if it comes down to outsource supplier verification, payment handling, pre-shipment product inspection and dispute resolution.
· Improve Email client Currently Email client embedded within Alibaba’s user account is at best primitive. It does not group emails on the same topics (like Google). Doesn’t have regular features like email forwarding, CC and BCC. User interface is cumbersome. Most of customers I speak to ask for personal email address. This causes two problems, customer deal between themselves outside the Alibaba and thus lose email tracking which is needed for dispute resolution. Second customers tend to use services like western union and PayPal losing potential revenue had they used Alipay/Escrow.
Future of B2B online commerce companies like Alibaba lies in minimizing the fraud and scam and may lead to establishment of big Amazon like warehouses from coast to coast, in all major countries and cities which act as shippers and quality inspectors for SME. That in conjunction with better fraud detection system deployed in host countries with law enforcement authorities on board will shape the industry in years to come.
I agree with you, focusing on the revenue today and disregarding what will come down revenue stream tomorrow is not smart. Keep aside B2B and B2C ecommerce for a moment and look at the revenue numbers of major companies ( I may be off little bit of exact numbers).
Amazon –2011 Annual revenue 48 Billion USD
Ebay-2011 Annual revenue 11 Billion USD
Alibaba-2011 Annual revenue less than 1billion USD
Alibaba-Annual revenue from Gold members(122,000) 366 million USD
Alibaba is far behind other companies when it comes to revenue. There is so much limited room to grow when you are in the B2B market. Granted Amazon and Ebay are active in very mature market of North America and Europe but mainly they have succeeded due to excellent credit reporting databases ( credit reporting bureaus) and blacklisting fraudulent individuals and companies and better fraud prevention mechanism. Alibaba has launched Aliexpress- a B2C venture but I doubt it will succeed due to reasons above.