The document presents a SWOT analysis for Alipay, highlighting its market dominance with a 54% share, competitive advantages from large user bases and technology, but facing threats from competitors like WeChat Pay and market barriers such as strict regulations. It emphasizes the importance of maintaining strong relationships with banks and the loyalty of users bolstered by platforms like Taobao and Tmall. Additionally, it notes challenges in developing social communities and the risk of privacy issues.

1. #3 Group Discussion
Case
Study

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. Buyer Power
- 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
Porter’s Five
Forces

4. Porter’s Five
Forces
Suppliers
Power
- 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

5. Porter’s Five
Forces
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.

6. Porter’s Five
Forces
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

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.
Threats of New
Entry

8. Busine
ss
Model

10. Blue Ocean Strategy
Eliminat
e
Creat
e
Raise
Reduce

11. ERRC
Grid
COUNTER
SERVICESSERVICE 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