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