HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES -
INFORMATION TECHNOLOGY
FACULTY OF INTERNATIONAL BUSINESS ADMINISTRATION
---------***--------
FINAL REPORT
HOW TO OBTAIN COMPETITIVE ADVANTAGE USING SERVICE
IN MOBILE COMMERCE: ALIBABA CASE
Group’s name: 8
Group’s members:
1. Đỗ Nguyễn Anh Thư – 22DH122723
2. Mai Phạm Bích Tuyền – 22DH123223
3. Nguyễn Đinh Hà Phú – 22DH484032
4. Hoàng Thị Yến Nhi – 22DH121868
5. Nguyễn Ngọc Bảo Duy – 22DH120416
6. Phạm Thị Huỳnh Như – 22DH122054
7. Phương Lan – 22DH
HCMC, 7/2024
Table of Contents
1. Introduction............................................................................................................ 4
1.1. History of Alibaba company................................................................................4
1.2. Culture and Value............................................................................................. 4
1.2.1. Mission....................................................................................................... 4
1.2.2. Vision......................................................................................................... 4
1.2.3. Value.......................................................................................................... 4
1.3. Bussiness model................................................................................................ 4
1.3.1. Choose a suitable business model......................................................................4
2. The company........................................................................................................... 5
2.1. Analysis of the Alibaba’s strategic position............................................................5
2.1.1. Internal Analysis........................................................................................... 5
2.1.2. External Analysis.......................................................................................... 6
2.1.3. PESTLE analysis.......................................................................................... 7
2.2. Determination of their competitive strategy...........................................................8
2.2.1. General strategy (Porter)................................................................................ 8
2.2.2. Positioning................................................................................................... 8
2.2.3. Core competencies......................................................................................... 9
2.3. Critique of their current marketing mix................................................................9
2.3.1. Product strategy and integration in Alibaba's marketing mix.................................9
2.3.2. Pricing strategy in Alibaba's marketing strategy.................................................9
2.3.3. Place in Alibaba's marketing strategy................................................................9
2.3.4. Promotion in Alibaba's marketing strategy.......................................................10
3. Market selection.................................................................................................... 10
3.1. Ranking the attractiveness of the market.............................................................12
3.2. The rationale behind Alibaba's greatest market share in India.................................12
4. Selection of relevant segmentation criteria..................................................................12
5. Marketing plan for the country/region.......................................................................12
5.1. Key product/Service decisions...........................................................................12
5.1.1. Product range............................................................................................. 12
5.1.2. Payment options......................................................................................... 13
5.1.3. Customer service......................................................................................... 13
5.2. Specific e-commerce strategies..........................................................................14
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6. Conclusion and recommendations.............................................................................15
References................................................................................................................ 16
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1. Introduction
1.1. History of Alibaba company
Alibaba, a renowned Chinese electronic commerce platform, was founded in 1999 by
Jack Ma and 17 associates. The platform improves communication between different
companies by utilizing its business-to-business (B2B) capabilities. Alibaba provides a
vast and varied range of products, including household appliances, technology
equipment, cosmetics, fashion items, leisure products, entertainment goods, healthcare
supplies, motorbikes, and bicycles. Alibaba mainly caters to major corporations,
distributors, and store owners involved in significant wholesale transactions. Hence, the
pricing strategy on Alibaba is designed to encourage competition and can be likened to
the pricing strategy on 1688.
The name Alibaba is inspired by the character Ali Baba in the Persian literary
masterpiece "One Thousand and One Nights" because of its wide appeal. Jack asserted
that Alibaba enjoys widespread recognition among individuals in India, Germany, Tokyo,
and China. Alibaba, kindly grant permission to access the premises. Alibaba is a
philanthropist with exceptional entrepreneurial skills who actively contributes to
improving the community. It is generally acknowledged and easy to spell. Alibaba
expands the market prospects for small and medium-sized enterprises.
1.2. Culture and Value
1.2.1. Mission
To make it easy to do business anywhere
1.2.2. Vision
We aspire to be a good company that will last for 102 years. We envision our customers
meeting, working, and living at Alibaba.
1.2.3. Value
Customers should be the primary focus, with workers and stockholders of secondary
importance. Trust simplifies all aspects. The user did not provide any text. Change is the
only consistent factor. The current level of performance will act as the benchmark or
point of reference for future performance. If not now, when would be a suitable time to
apply? If I am not the chosen individual, then who else would be an appropriate
candidate? Adopt a structured lifestyle while deriving satisfaction from your career.
1.3. Business model
Choose a suitable business model
Following Alibaba's entrance into the market, Amazon adopted a customer-to-customer
(C2C) business approach. Both corporate and retail customers have the opportunity to
access the consumer base of the market in this paradigm. Alibaba has chosen the B2B
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business strategy as the most effective global corporate architecture. Alibaba has derived
numerous advantages from implementing this technique.
Over the past two decades, China has emerged as the predominant power in worldwide
manufacturing, earning the moniker "world factory" and playing a pivotal role in the
production of many commodities. Chinese small and medium-sized firms can promote
their products on a worldwide scale, regardless of any potential constraints in their supply
chain. As a result, they serve as potential customers for Alibaba. Alibaba has derived
substantial advantages from this strategy, as it effectively facilitates the global expansion
of Chinese manufacturing businesses' consumer base. Examine the complex process of
assessing and confirming the dependability of stall proprietors. By resolving intricate
problems concerning international logistics.
2. The company
2.1. Analysis of the Alibaba’s strategic position
2.1.1. Internal Analysis
Strength
Alibaba's first and most obvious strength is its large-scale market operations. Unlike
other B2B businesses, Alibaba creates a link between product suppliers and customers
and large and small businesses. Thanks to that, items from small suppliers are sold at
wholesale prices, depending on the number of buyers or businesses that want to be
supplied, bringing significant profits to suppliers and businesses.
Alibaba's second strength is its strong capabilities in the field of technology, especially AI
and big data. On November 6, Alibaba Group launched Aidge - a suite of e-commerce
programming applications based on artificial intelligence (AI) to serve businesses
globally.
Weaknesses
The e-commerce industry is an industry with great competition. Alibaba faces many other
strong competitors such as Amazon and other e-commerce platforms in the international
market, as well as domestic competitors such as Tencent. This competition is not only in
goods but also in services, prices, and user experience. That high level of competition
causes suppliers to turn their backs on the group. It also affects suppliers' income when
they must continuously reduce product prices to compete with other suppliers.
In the early stages, Alibaba's website owned more than 27 industry classifications and
800-900 business categories, and such a large amount of information became the biggest
barrier for them in optimizing the platform of your business. All this information comes
from registered members, which is both an advantage and a disadvantage for Alibaba.
Visitors can browse huge commercial information on the website, while low-quality of
information will be detrimental to improvement, even bringing some unnecessary
problems on business reputation. Unfortunately, their competitors have considered this,
Global Resource Network has promoted message authentication to address low-quality
information and Alibaba should take note of that.
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Opportunities
In an era where the world is constantly progressing and developing, people's need to use
computers and the Internet is also increasing. More and more people are using technology
regardless of age or class, and people's understanding of the Internet is increasing,
causing people's shopping needs to increase as well. This is a great opportunity for all
businesses, including Alibaba.
Large market development potential of the B2B market. Access to a wider, more
developed market in the world market. This helps Alibaba find and establish business
relationships with partners all over the world.
Threats
The e-commerce industry is one of the industries with the fiercest competition. Alibaba
faces competition from major players such as Amazon and strong local rivals such as
Amazon.com. These competitors all have strong resources and clear strategies in
dominating the e-commerce market. The toughest competition with Alibaba is Tencent
Holdings - a social management company with WeChat.
Threats to user privacy are increasing. Misuse of data or denial of personal rights issues
can lead to loss of trust on the part of users, and stricter government regulations on data
management can also be a factor worrying problem with Alibaba.
2.1.2. External Analysis
Porter's Five Forces
Alibaba operates in a highly competitive market with low barriers to entry, unlike
established enterprises. Unlike other businesses, creating and launching a mobile
application does not require a large financial commitment or vast technological
knowledge.
Substitute product threat
Alibaba operates in a highly competitive business, facing strong competition from
Amazon, JD.com, eBay, and other powerful local e-commerce platforms. Alibaba's rivals
may offer items and services that are similar to Alibaba's, and they may have advantages
such as exceptional customer service, competitive pricing tactics, or extensive
distribution networks.
Impacts of suppliers
Alibaba heavily relies on technology partners to supply the necessary goods, solutions,
and technical services to support and improve its e-commerce platform and take
advantage of its technological knowledge.
Alibaba's ability to negotiate is limited, especially when dealing with suppliers who have
gained a strong market position due to their advanced technology and services.
Purchasers' capacity to bargain for favorable pricing and conditions.
Alibaba's e-commerce platform offers a wide range of products sourced from various
global suppliers. Customers get convenient access to a diverse range of products across
several industries, including technology, fashion, domestic appliances, and food.
Alibaba offers an extensive array of e-commerce services, including technical assistance,
advertising solutions, online payment methods, and shipping services, in addition to its
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merchandise. Customers are provided with a diverse selection of customized services that
are specifically designed to meet the unique requirements of their businesses, irrespective
of their scale.
Inter-industry rivalry
A wide range of well-known and up-and-coming enterprises, including established
technology giants and ambitious entrepreneurs, are actively involved in the global e-
commerce industry. The competitors are located in several countries, including China,
and offer a wide range of products, services, and business models.
Intense competition revolves around the quality and cost of products. Competitive firms
often strive to enhance the quality of their products and services while simultaneously
lowering their prices in order to attract and retain consumers. To sustain or bolster its
market position, Alibaba must continuously improve the quality of its products and
services in light of the fiercely competitive business landscape.
2.2. Determination of their competitive strategy
2.2.1. General strategy (Porter)
Alibaba is not just an e-commerce platform; it also invests heavily in research and
development to create unique and differentiated value in its services and products. This
includes adopting new technologies such as artificial intelligence, blockchain solutions,
and IoT to enhance user experience and optimize business operations.
Alibaba also focuses on providing optimal services in mobile commerce. They are not
simply an e-commerce platform but also build a global business ecosystem with services
ranging from e-commerce, and e-payment to financial investment and cloud.
2.2.2. Positioning
Alibaba defines itself as the world's largest and fastest-growing e-commerce platform,
putting customers at the center of everything it does. They provide services and products
that are not only diverse but also focus on personalization and user experience.
Alibaba defines itself by the diversity and richness of the services and products they
provide. In addition to the main e-commerce platforms such as Alibaba.com, Taobao, and
Tmall, they have also expanded into other areas such as electronic payment (Alipay),
financial investment (Ant Group), cloud (Alibaba Cloud), and other technology services.
This helps them create a comprehensive ecosystem and provide high value to users and
business partners.
2.2.3. Core competencies
Alibaba has invested heavily in developing mobile applications to meet the growing
needs of mobile phone users.
By using big data and AI technology, Alibaba provides personalized experiences for each
user, from advertising to product recommendations.
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Alibaba focuses on building an efficient and attentive customer support system, helping
to enhance customer relationships and reduce price-based competition
2.3. Critique of their current marketing mix
2.3.1. Product strategy and integration in Alibaba's marketing mix
Alibaba is owned by Chinese businessman Jack Ma one of the world's leading e-
commerce companies. This company has a lot of different services and products added to
the marketing mix like Alibaba.com, This is the world's largest B2B online sales platform
for small and medium businesses or agents like Aliexpress, an online retail store. Besides,
there are many new applications such as Autonavi provides maps that play an important
role in navigation in China. Taobao application, an online shopping platform, has a huge
number of users in many parts of the world. Along with many other platforms and
services.
2.3.2. Pricing strategy in Alibaba's marketing strategy
Alibaba uses a penetration pricing strategy and they find ways to enter many new markets
today. Therefore, Alibaba provides and offers discounts and cashbacks to buyers on its
platform to minimize the cut of transactions.
There are a small number of service types that do not involve any transaction costs, such
as Aliexpress which also has no registration fees. Profits earned from advertisements
cooperated with the company. The second profit comes from the large number of
customers who are members of the platform. Occasionally, it also uses competitive
pricing to offer products at nearly the same price as competitors in the market to boost
sales. In short, it can be seen that it is much more economical for consumers
2.3.3. Place in Alibaba's marketing strategy
Alibaba uses the Internet as an intermediary. Its services are online and are therefore
provided through the website. This way, they can reach a more diverse customer base for
their niche products. Nearly 80% of China's e-commerce activity takes place on Alibaba.
By conducting business with the help of digital platforms, many costs have been
optimized and distribution costs reduced. They recently entered the US market with an
initial public offering, one of the largest in history
The warehouse is equipped with advanced technology that is always updated quickly to
process orders.
2.3.4. Promotion in Alibaba's marketing strategy
Alibaba promotes its brand through many channels. It advertises through traditional
channels such as print newspapers, radio, and television advertisements. It advertises
through catchy slogans. Since most services are offered online, Alibaba also promotes
through digital media. They are also sponsors of international events such as the Beijing
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Olympics. It also sponsors the Australia-China Business Week, one of the popular events
in the business community. Other promotional methods include incentives, discounts,
festival sales, double-day big sales and refunds, and vouchers when purchasing on e-
commerce platforms.
Since this is a service marketing brand, the remaining three Ps will form Alibaba's 7P
marketing mix.
3. Market selection
Alibaba has chosen the online market to create a corporation based on considering e-
commerce factors that fit the company's strategy. Political, Economic, Social,
Technological, Legal, and Environmental. PESTLE Analysis offers a comprehensive
framework for this evaluation. Below is the PESTEL study table that Alibaba Group
produced following its global market segmentation.
India Indonesia Brazil Russia Vietnam
Political Has a stable The current There have The political Stable with
model and economic been recent landscape is growth-
adequate and climate has efforts to complex but promoting
stable improved, consolidate stable. policies.
domestic and the economy
business additional to a moderate
regulations foreign level of
investment is stability.
needed.
There are
programs to
promote the
domestic
economy,
and the
political
climate is
rather stable.
Economic An expanding The Sizable Although As consumer
rapidly, with economy and economy with growing spending
a growing middle class sizable slowly, there increases, the
middle class are consumer is still a economy is
and expanding base and sizable expanding
increasing quickly. expanding market with rapidly.
disposable middle class. significant
income. purchasing
power.
Social The younger The The number High internet Most young
generation population is of people usage rate, people use
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uses e- young, tech- using the increasing the internet
commerce savvy and internet and acceptance of and shop
more and popular shopping e-commerce. online.
more, and about e- online is
internet and commerce. increasing.
phone
penetration
rates are
increasing.
Technological New Building the expanding e- Developing Upgrade
developments framework commerce logistics and applications
in digital for online market, infrastructure. and
payments and commerce building infrastructure.
better and the rapid infrastructure.
infrastructure.development
of the digital
economy.
Legal Development Continuousl Strengthen E-commerce Build a legal
an e- y improve the legal regulations framework
commerce laws related framework are evolving specifically
laws and to e- for e- along with for e-
strengthen commerce commerce. strong commerce.
intellectual and intellectual
property intellectual property laws.
rights property
protection. protection.
Environmental Emphasis on Logistics is Pay attention Improving Emphasis on
sustainability developing to minimizing environmental strengthening
and taking but not environmental sustainability logistics and
steps to cut strong and impact and in the sustainable
carbon long-term, enhancing logistics growth.
emissions and infrastructure logistics. sector is a top
enhance is worrying. priority.
logistics.
The rationale behind Alibaba's greatest market share in India
Based on comprehensive PESTLE research, Alibaba Group's most popular market is
India. First and foremost, the Indian economy's size and growth rate must be considered.
With a sizable consumer market and a quickly developing middle class, it has one of the
largest and fastest growing economies in the world. As a result, Alibaba now has a large
pool of prospective customers. Second, as most Indians shop online via smartphones, the
country's strong mobile penetration rate and expanding mobile Internet user base play a
significant role in mobile commerce. Third, a significant contributing aspect is the
younger, tech-savvy Indian generation. India has a sizable consumer base eager to
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embrace and use e-commerce platforms because of its youthful and technologically
sophisticated populace. Fourth, the completion of the technology infrastructure fosters the
development and deployment of services by expanding 4G and 5G networks and offering
digital payment solutions online e-commerce platforms. Finally, the Indian government's
enabling laws and regulations that promote trade, e-commerce, technology, digital
technology, and chemistry have made it easier and easier for international businesses to
enter and grow this market.
4. Selection of relevant segmentation criteria
5. Marketing plan for the country/region
5.1. Key product/Service decisions
5.1.1. Product range
Alibaba should carefully diversify its range of products in a manner that specifically
appeals to the Indian market taking into perspective the unique customer demands and
cultural preferences of the country in general. By providing such items as electronics,
fashion, home appliances, and local handicrafts among many others, Alibaba will be able
to cater to the needs of different tastes and preferences of Indian consumers. The
electronic category must include smartphones, laptops, air pods, apple watches, and the
latest smart home devices such as smart speakers, smart light bulbs, smart security
cameras, etc. addressing the technologically inclined consumers. India’s fashion
promotion needs to include both traditional and modern clothing combined with
accessories to capture the dynamism and diversity of Indian fashion. For instance, home
appliances should include kitchen utensils and other household essentials from simple to
high-end to keep up with emerging lifestyle changes. Furthermore, including local
handicrafts may enable Alibaba to promote India’s rich cultural heritage and take
advantage of the growing trend of promoting local craftsmanship. Additionally, this wide
range of products will not only make Alibaba more attractive to a larger audience but also
help it build a strong foundation in several market segments thereby fostering customer
retention and long-term market growth in India.
5.1.2. Payment options
Alibaba should make sure that it offers various payment options to suit the diverse
payment preferences of Indian consumers. In India, where digital payments are widely
used, Alibaba can integrate the Unified Payments Interface (UPI), which is now a
common and trusted means of effecting immediate and safe transactions. Moreover,
integrating digital wallets such as Paytm and PhonePe, which are popular all over the
country will allow clients to use their favorite and well-known payment methods.
Considering that many Indians still prefer the traditional modes of making payments,
COD must be provided. Not only does this feature support people who have no means of
accessing electronic money, but it also instills confidence in those buyers who are
skeptical about online remittances. If Alibaba provides multiple ways for customers to
pay for products or services, they will do more business with them because they will feel
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more comfortable purchasing from them online; eventually leading to an easier shopping
process in general.
5.1.3. Customer service
To efficiently manage the linguistically diverse and multicultural Indian markets, Alibaba
will have to establish a robust customer care infrastructure with multilingual support.
This campaign enables Indian customers to increase customer satisfaction, trust-building
as well as loyalty. Thus, by providing support in Hindi, Bengali, Tamil, Telugu, Marathi,
and Kannada dialects among other regional languages, Alibaba can cater to varied
customers’ communication preferences. This allows them to enjoy more personalized and
fulfilling shopping experiences. Many customer care channels should be available at any
moment that can be contacted through various ways such as phone calls live chat or email
with a multilingual support system regardless of the way they choose to reach them.
Moreover, this would be enhanced further if local support staff who understand cultural
peculiarities were used for assistance purposes. To enhance its relationship with Indian
customers, Alibaba should focus on customer service and effective communication in
local languages.
5.2. Specific e-commerce strategies
Alibaba is the "giant" of the global e-commerce market. Its cutting-edge and creative
business model has allowed it to expand rapidly and leave its imprint on the world stage.
Alibaba has been using targeted and successful e-commerce tactics to reach better and
satisfy the demands of local consumers in various countries to sustain and grow its
position in the global market. By using these tactics, Alibaba gains a competitive edge
and improves the online buying experience for customers worldwide. Alibaba's business
strategy, which is B2B, caters to a worldwide clientele. To aid in the purchasing process,
the company has translated its website and mobile app into regional tongues and included
local customs in its design. Making a favorable impression on customers may be
achieved through interface design, thorough product descriptions, reviews, and customer
assistance. The user interface plays a crucial role in drawing in clients. Features like
navigation bars, UPI payment options, Paytm, and other e-wallets help streamline the
payment process. This makes it simple for customers to search and make purchases on
the system. Enhancing usability and overall happiness may also be achieved by offering a
user-friendly interface that is easy to use and understand for both tech-savvy and non-
tech-savvy people.
India is a multilingual nation where several languages are spoken in various parts of the
country. Alibaba has optimized the website for search engines and local keywords in
prominent Indian languages including Hindi, Tamil, Telugu, Bengali, and Marathi using
digital marketing approaches to accommodate this variety. Included in this are both off-
page SEO strategies like backlinks from nearby websites and on-page SEO strategies like
meta tags, titles, and content. By utilising well-known regional social media networks,
Alibaba produces interesting content, places tailored advertisements, and interacts with
users to foster a sense of community around the brand. Alibaba also works with regional
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influencers that have substantial fan bases and sway over the intended demographic.
Influencers may provide genuine material to advertise Alibaba goods and services,
improving the company's image.
Using a combination of sales and promotions, local occasions in line with major Indian
festivals and holidays like Diwali, Holi, Eid, and Independence Day will offer special
offers and discounts that will help merchants on the Alibaba e-commerce platform
increase revenue and retain first-time and returning customers. Additionally, because
consumers always put their interests first, flash discounts and limited-time deals will
generate a sense of urgency and excitement. This will be made possible by extensive
digital marketing channel promotion of these events, which will boost traffic and sales.
Customers may browse with ease and simplicity thanks to Alibaba's mobile app, which
combines speed and simplicity. Alibaba's e-commerce marketing plan involves
optimizing graphics, cutting down on code bloat, and employing efficient memory
buffering techniques to create a website that is completely responsive and functions
effectively on a range of devices.
Leveraging Alibaba's Cainiao network for logistics to optimize processes and cut
expenses. Cainiao can offer sophisticated logistics solutions, including inventory control,
real-time tracking, and warehousing. Establish an easy-to-understand refund policy for
customers. To foster recurring business and trust, make the returns procedure as easy and
straightforward as possible. Alibaba ought to collaborate with logistics partners to
streamline the returns process and reduce consumer annoyance.
Since most consumers these days prefer to shop online rather than in-store, Alibaba has
developed a plan to improve customer service by utilizing chatbots and artificial
intelligence. The customer care center would enhance customer satisfaction and retention
may be achieved by offering immediate customer service, addressing frequently asked
questions, adopting an efficient strategy, and suggesting unique incentives. By
successfully putting these ideas into practice, Alibaba has solidified its standing as the
industry leader in global e-commerce and is still evolving and growing in power.
6. Conclusion and recommendations
Alibaba Group is a prominent player in the Chinese e-commerce sector, widely
recognized as a global leader in technology. The corporation engages in many business
ventures, including e-commerce, cloud computing, and mobile payments. The total assets
exceed 364.24 billion yuan. On September 19, 2014, the Global 2000 ranking ranked
Alibaba 59th among publicly traded organizations and included it in the top 10 largest
firms. The market's capitalization reached a total of 231 billion USD. Alibaba's primary
goal is to create a platform that enables businesses and customers to connect with
suppliers in the B2B model. In addition, Alibaba's development into additional e-
commerce platforms such as Taobao and Tmall strengthens its position as a highly
effective platform that attracts a wide range of enterprises, distributors, and customers. In
2015, the firm achieved a commanding market share of 58%, surpassing all competitors
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and gaining a substantial competitive advantage in the industry. In January 2018,
Alibaba's market capitalization exceeded $500 billion, making it the second Asian
company to achieve this notable milestone, following its rival Tencent. Alibaba achieved
the ninth position in the global rankings for the most valuable brand in 2018. Alibaba has
attained its present level of success through efficient allocation of resources,
comprehensive understanding of the market, and astute exploitation of opportunities in
the online commerce industry. Alibaba aims to develop an e-commerce infrastructure that
leverages technology and electronic information portals to support businesses and their
partners. Alibaba.com attained profitability and experienced significant expansion in
2002, a mere three years after its establishment. Alibaba has continually broadened and
improved its business approach, while also promoting efficient operations. They employ
technology to accelerate their organization's impressive expansion. In addition, Alibaba's
large worldwide supply network offers a wide range of products to assist businesses in
finding suppliers that properly match their specific requirements. These features provide
a multitude of advantages to consumers, encompassing both sellers and purchasers.
Alibaba deliberately employed e-commerce to attain a substantial edge in the worldwide
market. Alibaba's impressive accomplishment can be credited to its B2B strategy, which
enables commercial connections and its large worldwide presence. This platform has
achieved widespread usage and has established a great reputation due to its exceptional
level of user involvement. Alibaba attracts considerable domestic and international
attention, so exerting a big influence on customers globally. The dependable e-commerce
platform Alibaba streamlines the task of locating and collaborating with business
companions and suppliers for clients.
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