The Entrepreneur's Dilemma: Alibaba, Tencent and Amazon as e-Commerce Platforms

Description

A nascent women’s apparel online store on Tmall, China's largest business-to-consumer retail platform operated by Alibaba Group, was just beginning to establish itself on the online market utilizing the tools and services provided by Tmall to develop and operate its business. Within four months after the business was launched, Tmall unexpectedly released a new policy which significantly increased the annual service fee and cash deposit for individual stores. This new policy, which was to come into effect in less than three months following the announcement, could render the business of small- and medium-sized e-commerce stores, such as the new women’s apparel start-up, on Tmall unprofitable. The management team of the fledgling clothing business had to reconsider whether to renew their contract with Tmall or transfer their store to one of the alternative online platforms, such as Alibaba Group's Taobao Marketplace, Tencent Group’s Shop.QQ or Amazon.com’s Amazon.cn.

Learning Objective

·To introduce the concept of how e-commerce platforms support the development and operation of small and medium-sized online enterprises. ·To illustrate how entrepreneurs can leverage diverse services provided by e-commerce platforms to create business opportunities online. ·To investigate the different strategies of major e-commerce platforms and their impact on the decisions of different types of online stores.

Keywords

China e-marketplace