Today, we will be breaking down the world's largest e-commerce company, Alibaba. Alibaba was founded in 1997 by Jack Ma and almost 20 other co-founders as an online bulletin board that allowed small Chinese manufacturers to tell buyers around the world that they were open for business. Today, Alibaba operates a sprawling ecosystem of businesses that includes e-commerce marketplaces, cloud computing, food delivery, logistics, and financial services.
In this breakdown, we discuss the staggering scale Alibaba's business, how Alibaba went from copycat to innovator, the looming threat to Alibaba from the next generation of Chinese juggernauts, and how competition is viewed differently in China versus the West.
For this episode, I'm joined by a special guest host, Claire Cormier Thielke, who many of you will remember from her appearance on Invest Like the Best. Claire is the managing director of Asia Pacific for Hines and brings her first-hand view of what Alibaba has built in China and her daily experience using the company's products.
To help us break down Alibaba, we're joined by Ram Parameswaran, the founder and managing partner of investment firm Octahedron Capital. Ram has invested in some of the biggest Chinese companies of the past decade, including Pinduoduo and Bytedance, and is the first person I thought of when wanting to discuss Alibaba.
For the full show notes, transcript, and links to mentioned content, check out the episode page here.
This episode is brought to you by Tegus. We created Business Breakdowns to uncover the lessons and frameworks behind every business, and that's what makes Tegus our perfect launch partner. Much of the foundational prep for these episodes starts with research on the Tegus platform.
With Tegus, you can learn everything you’d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 15,000 calls on Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.
Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss
[00:03:13] - [First question] - What Alibaba is
[00:04:29] - Tmall and Taobao
[00:06:48] - The many faces of Alibaba as a country-scale business
[00:09:58] - What defines a company as being country-scale
[00:11:29] - Adaptive business models for cities of multiple tiers and mimetic behavior of other large-scale companies
[00:18:15] - Alibaba’s ability influence the physical infrastructure of cities and China as a whole
[00:19:01] - Full stack solution company JD Global
[00:21:03] - Tencent
[00:21:47] - Key players in the monetization of commerce in China: JD, Pinduoduo, Meituan
[00:26:35] - Reducing friction may be the number one reason for internet businesses to scale
[00:31:15] - Is it worth it for Alibaba to explore the social media space?
[00:34:05] - Why Chinese companies are naturally more competitive and aggressive than North American ones
[00:38:46] - How China perceives and adopts language such as the Seven Powers framework
[00:40:23] - What the West can learn from China and Alibaba
[00:43:28] - Adopting Chinese practices for Western brick and mortar stores
[00:45:35] - Connectography: Mapping the Future of Global Civilization
[00:45:51] - Learn