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  • The traditional marketplace has seen little change over the past few 100 years.

  • You've got a buyer.

  • You've got a seller.

  • Which then leads to a transaction.

  • But over the past couple of decades things have started to change at an unprecedented pace.

  • And perhaps no company is reshaping that experience more than Alibaba.

  • Alibaba is one of the world's largest retailers.

  • The company has more than 500 million people using its shopping apps every month

  • and if you're thinking its scale is limited to China, well think again.

  • It has operations in more than 200 countries.

  • The company was founded by CEO Jack Ma in 1999 with 17 other people.

  • And he knew he was onto something big.

  • When I have a competitor like Google or eBay,

  • as a Chinese local company, we can learn a lot, we can improve ourselves.

  • They should be careful of us.

  • Alibaba set the record for the biggest IPO in history,

  • which took place at the New York Stock Exchange in 2014.

  • And this year, Alibaba was the first company in Asia to exceed the $400 billion valuation mark,

  • an honor that had previously only been held by American companies.

  • Alibaba is amongst other global eCommerce giants transforming the marketplace from this,

  • to this.

  • The company is made up of three main sites, Taobao, Tmall and Alibaba.com.

  • Combined, they have hundreds of millions of users, and host millions of merchants and businesses.

  • Which means they can pretty much be used by anyone, anywhere, for anything.

  • So how does it even work?

  • Meet our fictional character Jane, she lives in Beijing.

  • Jane wants to buy a new blender, so she logs onto Taobao.

  • She finds one she likes, being sold by, let's say Chris.

  • He lives in Shanghai and sells the blenders to individuals at a competitive price.

  • When Jane goes to checkout, she doesn't use her credit card.

  • She uses AliPay to purchase the item. Think of it like using PayPal.

  • Chris then accepts the AliPay payment from Jane.

  • So where did the supplier, Chris, get the blenders from?

  • Well, he bought a supply of 1,000 units on 1688.com, the popular Chinese version of Alibaba.com.

  • It sells bulk orders to suppliers like himself.

  • He bought his batch from a manufacturer named Keith on Tmall which allows businesses to sell wholesale.

  • Keith owns a blender company and production facility in Shenzhen

  • which produces the items and other kitchen appliances.

  • Previously, Chris only sold to individual buyers in China.

  • But recently, he's listed his blenders on AliExpress, which sells to customers outside of China.

  • So now, Laura, who's living in California and found the blender on AliExpress, can also buy it from Chris.

  • And yes, she can even use Alipay too.

  • Of course, importing products from China into the U.S. is nothing new.

  • The difference?

  • Now, anyone in the world can do it from their mobile device and all through the same company.

  • But it's not only eCommerce.

  • Chris has been selling so many blenders lately that he wants to grow his business faster.

  • But he doesn't have the money to buy more units from Keith.

  • So Chris uses AntFinancial, to get financing.

  • The loan helps him order an extra 10,000 units.

  • So, for buying, selling, digital payments, and even financing, you've done it all in Alibaba's platforms.

  • And Alibaba now includes a shipping company, a messaging app,

  • a movie studio named Alibaba Pictures and more.

  • Alibaba's growth is primarily fueled by China's massive population and rising middle class,

  • but Jack Ma wants world domination for the company.

  • That's why Alibaba is investing heavily in companies in other markets as well.

  • Most of which are also being pursued by Amazon.

  • The marketplace as we know it has changed forever.

  • And it's likely going to be companies like Alibaba which continue to lead its evolution.

  • Hey it's Uptin, thanks for watching.

  • For more of our videos check out,

  • Why is Hong Kong housing so expensive, here,

  • and see how China is threatening

  • Asia's financial centre, here.

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The traditional marketplace has seen little change over the past few 100 years.

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What is Alibaba? | CNBC Explains

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    PENG posted on 2019/02/16
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