Alibaba’s copy and paste strategy
There’s little to say about the size and importance of China’s Alibaba, an empire built by copying successful US models such as eBay, Amazon, PayPal, Groupon, etc., and adapting them to a market that aside from being the world’s largest, is conveniently protected from international competition.
Following its highly successful IPO in the United States, the company now has the resources to pretty much do what it wants. And one of the things it has done, albeit largely unnoticed in the West because it is taking place in rural China, is to develop low-cost smartphones, with starting prices of $49, that are adapted to the needs of the Chinese market with access to a suite of Alibaba applications, as well as its own operating system, Yun OS, developed as an Android fork.
The operating system has already been the subject of court action after it was launched in 2011: Google threatened to deprive manufactures like Acer of access to Android if they developed phones using the Alibaba operating system. Now that Google’s market share has grown, Alibaba has decided on its most ambitious strategy ever, risking part of an ecosystem that it effectively controls: it has asked less-well-known Chinese manufacturers, the same companies that use Alibaba as a B2B market every day, to make its low-cost terminals using Yun OS. Along with the investment the company made in February in Meizu, one of the best-known makers for the Chinese domestic market, the idea is to sell some 30 million units in the first year, which would give Yun OS around 10 percent of the Chinese smartphone market.
The company is now China’s Amazon, as well as its eBay, its Groupon, and its PayPal: now it wants to be China’s Android. An example of innovation based on adapting to the limits of a market with many entry barriers that has allowed Alibaba to become a global giant.
(En español, aquí)
