Case

Study
#3 Group Discussion
S - Owning the largest market share in the segment SWOT
- Large user bases from Taobao, Tmall and Ant Finance
- A relatively mature credit system & safety guarantee
- Brand endorsement of Alibaba, word of mouth

- Long settlement interval w

- Latent risks of deposit and privacy

- Weak in developing its social community

O - The booming of B2C&C2C businesses

- Increasing offline usage scenarios
- The popularity of mobile devices

- Policy (regulations) from banks and

government
- Competition from WeChat and banks
T
Buyer Power
Low
- Market structure type: Oligopoly

- Large and potential market

- Ali takes up 54.0% of market

share by GMV, facing to mass
market
Porter’s Five
- WeChat Pay is the key competitor
Forces
- It is troublesome for customers
to switch to another product
Suppliers
Power
Medium
- Banks are the most important
suppliers for Alipay.

- 19 national banks , 34 regional

banks.

- It is important to maintain the

relationships with the China’s five Porter’s Five
largest state-owned banks.
Forces
- The more banks in its networks,
the better for its business.
Competitor
Rivalry
High
- Tenpay(WeChat Pay) is the
biggest competitor of Alipay.

- In 2014, Wechat quickly squeezed

into the market, snatching nearly
40% of market share from Alipay.
- An average of 902m people Porter’s Five
log in WeChat every day, bringing
more daily active users for
WeChat Pay.
Forces
- The competition is fiercer.
Threat of
Substitution
Low - Medium
- The substitutes include cash,
credit card, bank mobile
payment and other mobile
payment tools (e.g. Apple Pay,
Samsung Pay).

- They are all free for individual

users. Porter’s Five
- They cannot substitute Alipay
because the technology,
Forces
services and user experience
design are not as well as those
Threats of New
Entry
Low

“
- Hard to get licensing qualification due to the stricter
policy.

- Technological support is required for third-payment

services.

- A promising user base and the trust of users are

essential.

- The user are loyal to Alipay.

- The flourishing of Taobao and Tmall adds to the user

stickiness.
Busine
ss
Model
Blue Ocean StrategyCreat
e
Raise

Reduce
Eliminat
e
Eliminate COUNTER ERRC
SERVICES
SERVICE FEES &
Grid
Reduce PAYMENT PROCEDURES
SOCIAL SCENARIOS,
PAYMENT MEANS,
DISCOUNT & RETURN OF Raise
FINANCIAL PRODUCTS
INTERACTIONS WITH Create
CUSTOMERS
THANKS!
Feng Anran 1155099567
Shen Jingjie 1155099231
Song Yanlin 1155096215
Wang Xiaoli 1155099464
Xu Mengrong
1155096838