PESTEL analysis on Alibaba prepared by students of BBA semester 2 based on information available till June 2020. Hope this helps.

2. INTRODUCTION
 Chinese company founded in June 1999 by Chung
Tsai and Yun Jack Ma with headquarters in
Hangzhou, China.
 Alibaba engages in online mobile commerce and
offers services, products, and technology that helps
transform the way brands, merchants and other
businesses market and operate in China and
internationally.

3.  The company’s revenue has been on a steady
growth
$8.576 million in 2014
$15.903 million in 2016$15.903 million in 2016
$23.521 million in 2017
$37.762 million in 2018
while enjoying profit margins of 25.56%

4. Alibaba's global headquarters at Xixi
campus in Hangzhou, China.

6. POLITICALPOLITICAL
FACTORS

7. China’s Cyber Security Law
 Enacted ( 7 November 2016 ) to increase –
Data protection
Data localization
and Cyber security in the interest of National security.and Cyber security in the interest of National security.
 Shielding Chinese data from the eyes of foreign
governments like the US.

8.  Under the law –
Chinese companies are supposed to introduce
data protection measures for businesses and data
relating to the country’s citizens and data must berelating to the country’s citizens and data must be
stored on Chinese servers.
 Leaving MNC like Amazon vulnerable but at the
same time giving Chinese companies a competitive
advantage.

9. Trump’s Tariffs
 US President Donald Trump’s tariffs are a major
strategic threat to companies like Alibaba Holdings
which have operations in the USA.
 Trump’s government— imposed at least $250
billion worth of tariffs on Chinese imports
ranging from TVs to grenade launchers.
 Price – Increase

10. ECONOMIC
FACTOR

11.  China’s strong Growth opportunities
Economic growth for Alibaba.
 China’s economy grew beyond expectations to 6.1% in 2019,
higher than during the same period last year despite fear of trade
wars between China and the USA.
higher than during the same period last year despite fear of trade
wars between China and the USA.
 China's GDP was $14.3 trillion (99 trillion Yuan) in 2019.
 China's per capita income stood at 30,733 Yuan (4,461.95
US dollars) in 2019
 The strong economy has given more purchasing power to Chinese
consumers especially from lower-tier cities, part of the rise of the
Chinese middle class.

12.  New middle-class consumers from lower-tier Chinese cities
is why Alibaba’s e-commerce business continues to benefit and
remain bullish as Alibaba knows more than 400 million
Chinese are shopping on its Platforms.
The company’s revenue has been able to grow From The company’s revenue has been able to grow From
$23.521milliion
to $37.762 million boosted by demand from the Chinese
middle class
 A high level of unemployment in the country would mean
there is a greater demand of jobs than supply, meaning
people would be willing to work for a lower wage, which
would lower the costs of Alibaba

13. SOCIAL
FACTORSFACTORS

14. Chinese Rapid Urbanization
 As more people are shifting to the urban areas, China
is shifting into a more consumer-driven economy which
is benefiting e-commerce companies like Alibaba as
more consumers shop on its platforms.
The growing Chinese middle class which is forecast to The growing Chinese middle class which is forecast to
be around 60% of the urban population by 2030
 improved standards of living and has the power to buy
high-quality products and services. This will boost the
revenue of companies like Alibaba.

15. China’s Aging Population
 China’s population is aging very fast with
approximately 222 million Chinese already aged
60 and above and forecast to hit 255 million by
2020, almost 20% of the country’s population.
 This may explain why Alibaba is already working
on ways of attracting and retaining this
demographic through the introduction of an
elderly friendly app on TaoBao where it hopes to
capture China’s senior citizens.

16. Increasing internet penetration
 China’s online population grew to 772 million by
the end of 2017 with an addition of 40.74 million
connections.
 China’s internet availability rate reached 55.8%
exceeding the global average by 4.1%.

17. TECHNOLOGICALTECHNOLOGICAL
FACTORS

18.  Alibaba has in partnership with Guess Team,
introduced a fashion AI system to enable it to
improve customer experience and drive sales
leveraging new AI technology
 The technology is built around Alibaba’s
e-commerce platform Taobao and allows users to
check in the stores with their mobile Taobao QR code,
all items in store come with corresponding product
listings making it easier for customers to add them in
their cart.

19.  When it comes to clothes shopping, customers can
pick their clothes by using a smart mirror which
can help them mix and match the clothes, it also
saves time since the clothes are prepared for them
in the fitting room.in the fitting room.
 Tmall – Chinese-language website for business-to-
consumer online retail operated in China by
Alibaba Group.

20. ENVIRONMENTALENVIRONMENTAL
FACTORS

21.  The weather conditions may impact the ability of
Alibaba to manage the transportation of both the
resources and the finished product. This, in turn,
would affect the delivery dates of the final
product.product.
 Pollution Fines and Quotas – Companies that
produce large amounts of waste are required by
law to manage their environmental habits.

22.  Alibaba donated approximately $47 million to
environmental fund in 2016 as its way of
protecting the environment.
 Alibaba has joined non-governmental environmental
protection organizations to protect water resources
in the country.

23. LEGALLEGAL
FACTORS

24.  Discrimination laws are placed by the government to
protect the employees and ensure that everyone in
Alibaba is treated fairly and given the same
opportunities, regardless of gender, age, disability,
ethnicity, religion or sexual orientation.ethnicity, religion or sexual orientation.
 Laws are also placed to ensure a certain level of
quality or reasonable price for certain products to
keep the customer safe and prevent them for being
provided.

25.  Intellectual property laws and other data
protection laws are, as mentioned earlier, in place
to protect the ideas and patents of companies who
are only profiting because of that information.
 If there is a likelihood that the data is stolen, then
Alibaba will lose its competitive edge and have a
high chance of failure.

26. the Taobao and Tmall Platforms - Y