An analysis of Alipay

2. SWOTS
w
O
T
- Owning the largest market share in the segment
- Large user bases from Taobao, Tmall and Ant Finance
- A relatively mature credit system & safety guarantee
- Brand endorsement of Alibaba, word of mouth
- Latent risks of deposit and privacy
- Long settlement interval
- Weak in developing its social community
- 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

3. “- Market structure type: Oligopoly
- Large and potential market
- Ali takes up 54.0% of market share by GMV, facing to mass
market
- WeChat Pay is the key competitor
- It is troublesome for customers to switch to another product
Low
Buyer Power Porter’s
Five
Forces

4. “- 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 largest state-owned banks.
- The more banks in its networks, the better for its business.
Medium
Suppliers Power Porter’s
Five
Forces

5. “
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 902mpeople log in WeChat every day,
bringing more daily active users for WeChat Pay.
- The competition is fiercer.
Porter’s
Five
Forces

6. “
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.
- They cannot substitute Alipay because the technology,
services and user experience design are not as well as those
of Alipay.
Porter’s
Five
Forces

7. “
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.
- Alipay owns many distribution channels both in online and
offline scenarios, penetrating into users’ everyday lives.
Threats of New Entry Porter’s
Five
Forces

8. Business
Model

10. Blue Ocean Strategy
Eliminate
Create
Raise
Reduce

11. ERRC
Grid
COUNTER SERVICES
SERVICE FEES & PAYMENT
PROCEDURES
SOCIAL SCENARIOS, PAYMENT
MEANS, DISCOUNT & RETURN OF
FINANCIAL PRODUCTS
INTERACTIONS WITH CUSTOMERS
Reduce
Raise
Eliminate
Create

12. THANKS!
Feng Anran 1155099567
Shen Jingjie 1155099231
Song Yanlin 1155096215
Wang Xiaoli 1155099464
Xu Mengrong 1155096838