If you don’t know by now, Alibaba is one of the most successful e-commerce companies in the world. The company IPO share price was prices at $68.00 /share. That opening price placed Alibaba's overall valuation at almost $230 billion, more than Amazon and eBay's valuations combined. The Group consists of 25 business units and its affiliated entities employs some 24,000 people around the world.
The Alibaba Group was founded in 1999 by 18 people led by Jack Ma, a former English teacher from Hangzhou, China who aspired to help make the Internet accessible, trustworthy and beneficial for everyone. Since its inception, it has developed leading businesses in consumer e-commerce, online payment, business-to-business marketplaces and cloud computing, reaching Internet users in more than 240 countries and regions.
I listen to Jack Ma gave a speech to the economic club in New York on 9th June 2015, and during that speech, Jack Ma broke down the success of Alibaba into two simple but powerful business practices.
Purpose and Focus
What made Alibaba this giant in the e-commerce business despite the continued growth of Amazon, who many argued is the trendsetter in the e-commerce world?
The company has a fanatical focus on small and medium size businesses
The company was founded to champion the interest of small businesses, providing access to market not traditionally accessible to small businesses. Jack Ma believed that the Internet would level the playing field by enabling small enterprises to leverage innovation and technology to grow and compete more effectively in the domestic and global economies.
With more than 70 offices in Greater China, India, the United Kingdom and the United States; 10 million small businesses buy and sell every day on Alibaba, and the company manages 10 thousand warehouses for small and medium size businesses all over the world.
Jack Ma and the Alibaba Group is continually working to uphold the mission of the company “To Make it Easy to do Business Anywhere” and are committed to helping small and medium-sized businesses to develop. Despite their success and growth, Alibaba business focus has not changed one bit.
Their global strategy is laser focus on small businesses, as a matter of fact, part of their strategic direction is to target small businesses in the United States and give them an opportunity to gain access to the Chinese market.
Their purpose is the driver of their growth
I watched a video with Jack Ma talking to his co-founders about the purpose of Alibaba, and it is fascinating to listen to Jack Ma talk about the purpose of the company back in 1999 and listening to him talk about the purpose of the business now.
It’s amazing how consistent the company has been throughout the years. Jack Ma made the dream of Alibaba infectious. That purpose has allowed Alibaba to remain incredibly focus on their target market and anyone associated with Alibaba knows what the company was founded to achieved.
Some people think it is simplistic, but having that sense purpose will allow all your employees to become focus on the organization's mission and removes any confusion about the company direction. Alibaba has many businesses in their ecosystem, and every one of them speaks the same language.
Do not underestimate the power of purpose. According to Nick Craig and Scott A. Snook, purpose driven leadership is the key to exceptional organizational performance and Jack Ma, the man who co-founded Alibaba, has a clear and precise vision for the future of Alibaba aligned to the company purpose.
In his speech, Jack Ma indicated that the company has only 2% of their business outside of China and his vision is to have 40% of Alibaba business outside of China. But the driver of that expansion is their continued focus on small and medium size businesses.
The purpose did not change, as a matter of fact, the purpose of the company is the primary driver of their strategic planning. With more than 120 million people visiting their site every day and helping more than 10 million small businesses buy and sell every day and even with the continued growth of Amazon, their purpose and focus is overarching.
Their strategy is to make the company global and give small business all over the world the opportunity to buy and sell their product and services everywhere. Their purpose is the reference point for all their plans and vision.