E-COMMERCE

Assignment 1
Table of Contents
a) Discussion on the critical success factors, marketing strategy, core competency, and company strategy.
...................................................................................................................................................................... 2
About E-Commerce company................................................................................................................... 2
Critical success factors .............................................................................................................................. 2
The decision to offer a much broader selection of items a good marketing strategy ................................ 3
Diversification influences the company’s focus on its core competence.................................................. 3
Long term and short term strategy of Alibaba .......................................................................................... 4
b) Discussion on the three specific elements of its personalization and customization features. ................. 5
Three specific elements of its personalization and customization features of Alibaba’s.......................... 5
Are these features encouraging purchasing more items in the future from the company Alibaba? .......... 7
c) Discussion on the recent material on the company marketing strategy and discuss your findings. ......... 8
d) Discussion on the social networking activities on the company and their purpose. ............................... 10
Bibliography ................................................................................................................................................ 12

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a) Discussion on the critical success factors, marketing strategy, core competency, and
company strategy.

About E-Commerce company

Alibaba Group is considered as the leading e-commerce website. The company mainly
conducts business to business e-commerce trades. Alibaba is an e-commerce platform that caters
towards both global and Chinese consumers. The company majorly deals with domestic
merchants (Alibabagroup, 2018). AliExpress and Alibaba connect business within China.
Alibaba posses a financial affiliate that carries out an online platform for payment that is
generally called Alipay (Billboard, 2016).

Critical success factors

Various success factors helped the organization to be one of the leading e-commerce in the
world. Some of the success factors have been identified in the flowing points:
1. Unique business model:
The company mainly offers services to individuals and small enterprises. This is considered as
an exclusive business opportunity that emancipates small enterprises’ productive forces. The
company also offers the customers a diversified choice for consumption (Pavie, 2018). The
different core businesses of Alibaba were identified
 1688.com, a business to a business e-commerce platform
 YidaTong
 Taobao (Thirupati, 2015)
All the above core businesses mainly emphasize on offering services to the small businesses.
This core business helps the company to create value. Altogether they represent an exclusive e-
commerce ecosystem. Broader consumer groups were targeted through larger goods diversity
(Pavie, 2016).

2. Profit model:
The company has an unconventional revenue model. The company charges for the services
within the technical and marketing support. This approach mainly contributes towards a robust
and large market share. The approach also enhances loyalty among customers. The revenue of
the company also gained from keyword bidding and advertisements (Retailnews, 2016). The

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revenue represents almost 57% of aggregate revenue. Therefore the advertisement and keyword
bidding is considered as a core source for gaining revenue. Another source of gaining revenue is
considered as technical services. The technical services mainly rely on big data. The intermediate
fees are eradicated which allows the merchants to get free registration. Through this way, the
company had enabled the habit of online transactions among Chinese consumers. The platform
of Alibaba represents over half-billion registration. This also results in acquiring 0.23 billion of
active customers (Allneedtoknowaliexpress, 2017).
3. Sensitivity towards business opportunities
Alibaba excels in adopting exceptional business opportunities. For instance, the festival of
“Double 11” that occurred between Christmas and Chinese National Day is helping the company
to gain business opportunities. During this phase, the customers mainly avoid shopping.
However, the company has turned this period to a shopping festival. It is considered as finest
approach to grab opportunities.

The decision to offer a much broader selection of items a good marketing strategy
The company is mainly indulged in offering its products and services to a larger group of
customers. Thus the company possesses a wider choice of products. This is identified as one of
the finest business marketing strategy. It is because the company could enhance its productivity
by covering maximum market share (Ferreira, 2017). A larger selection of products and services
enables the company to gain higher productivity. The particular marketing strategy of Alibaba
also leads to diminishing the market share of its competitors. Therefore it is considered one of
the most effective business strategies of all time. The company has the advantage of economies
of scope. As per this theory, the company would be able to gain profit. This will happen when
the company is indulged in producing an increased variety of items. The economies of scope also
help the organization to minimize its unit cost for producing a variety of products (Zeng, 2018).

Diversification influences the company’s focus on its core competence

The present strategy of Alibaba is to make sure that the company is gaining constant growth. The
constant growth is ensured through the strategy of diversification. The diversification strategy of
the business facilitates the business to engage their customers. Customer engagement is
considered to be very fundamental to the company’s success. The diversification strategy of the
company enables the company to gain stable profits (Vaast, 2017). From the perspective of

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economics, the company would be indulging in attain more constant productivity. The main
purpose of diversification is reducing the company’s dependence on its core competency. The
core competency of the business is identified as e-commerce services. As per the analysis, it has
been evaluated that the company is following the Amazon business model to some extent. The
company consolidated its entertainment and media businesses under one team (Chandrasekhar,
2017). This enables the company to put the focus on entertainment and cloud operations. Thus
the company would be able to adopt a cross-promotional strategy. By focusing on diversified
operations, the company would not be able to concentrate on core competency. The revenue
which the company acquires from the e-commerce business is over 87.5%. The company also
wanted to develop its other offering and services and also turn them out as core businesses of
Alibaba. The rapid developing profit of the company comes from the new areas, for example,
cloud-based services. This does not affect the brand equity of the company rather enhances the
goodwill in the market (Şekerli, 2018).

Long term and short term strategy of Alibaba

The long term strategy of Alibaba is to form an integrated solution that includes logistics, cloud
computing, marketplaces, and payments. This enables merchants to conduct businesses from
anywhere (Forbes, 2016). Cloud computing is identified to be playing a major role in the long
term strategies of the company. Alibaba’s investment strategy is to purchase and hold. The trade
tension of the short term tends to bring the stock down (Seekingalpha, 2018). However, the
company’s long term case is very strong. The company has also adopted a short term liquidity
strategy (J.P. Morgan, 2015).

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b) Discussion on the three specific elements of its personalization and customization
features.

Three specific elements of its personalization and customization features of Alibaba’s

Source: https://bintime.com/blog/best-b2b-ecommerce-websites
The specific elements of personalization features of Alibaba are provided in the following
points:
 Adding oomph to the product catalog

The addition of oomph to the product catalog is personalizing the eCommerce site of Alibaba. It
is showing that no customers can click on the cancel button without spending money on the
product (Avanesova, 2018). It is making easier for the customers to shop the products that are
mostly liked by them. Alibaba is focusing on strengthening the relationship with the customers
by offering them their favorite products (Zeng, 2018).
 Showing recommended and featured products to the customers

The displaying of the recommended featured products is made based on the search processes
carried out by the customers. The information on the browsed products of the customers is
gathered by the Alibaba. The gathering of the information is carried out from the browsing
history, purchasing process, bookmarked products, and from the wishlist of the customers is

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gathered. This helps the company to categorize the products for each customer based on the
searching processes (Apium, 2018).
 Showing pricing and shipping costs according to the customer location

The displaying of pricing for each product, shipping costs and offer details is an easy way for
personalizing the consumer experiences. It is helping in improving the customer experience by
illustrating the currency and the language in the shipping costs. It is also saving the unnecessary
hassles faced by the customers while converting the currency and the wondering about the
shipping costs (Dennis, 2019).
The specific elements of customization features of Alibaba are provided in the following
points:
 Allowing the users to change their previous selections

The customization feature of allowing the users to change their previous selections is helping the
customers to carry out the reselection of the products. The customer gets the benefit of changing
the selection of products with the changes in the tastes and preferences. This helps in removing
the issues of selection process faced by the customers (Nichols, 2018).
 Customization of product categories

The customization of product categories helps the consumers in carrying out the searching
process in the individual categories. The contents will be displayed as per the preference of the
consumer’s product category. The selection of price ranges for the individual product category
option is present. It is helping in sorting out the products as per the selected price ranges of the
consumers (Schade, 2016). It is also helping Alibaba to strengthen the customer base with the
help of this categorization process. Also, the issue of an unarranged display of products is
mitigated by the help of this process.
 The interface is developed for the user for allowing them to click on their favorite
products

The customization element of interface development for the user is allowing Alibaba to focus on
the individual customer's favorite product. The element also helps Alibaba in displaying the
offers on the individual customer's selected product. It is also helping Alibaba to focus on the

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objectives of attracting the customers with the help of the customization element (Clearbit,
2019).

Are these features encouraging purchasing more items in the future from the company
Alibaba?
The elements of personalization and categorization are helping the company in attracting new
customers. The personalization items such as wish lists featured recommendation, recently
viewed allowing the customers to establish a separate list of items. The customers will be
enabled by adding their favorite products to the wishlist. The separation of the items as per the
choice encourages the customers to buy their preferred products (Wang C., 2018). The
strengthening of the relations with the customers is made with the help of these features. The real
personalization is seen when the meeting of the customers' needs is carried out by Alibaba. The
data mining process is enabling them to gain customer shopping experience much more
memorable. The company is making it for the customers to provide a memorable shopping
experience to the customers. This helps the company to encourage consumers to purchase more
items in the future (Wang H. H., 2016).
The customization elements described above is reflecting the meeting of consumer's needs. The
elements of customization are helping Alibaba to focus on the preference of the consumers.
Based on the preferences, the arrangement of the product categories is made. The sorting of
prices option is helping the customers to focus on the improvement of the consumer base. Apart
from this, the customization of the webpage is carried out by Alibaba (Alibaba, Design the
layout and content of your pages, 2018). It is essential for the company as the company can
display all the offers that are suitable for the company. Due to this reason, it is enabling the
customers to gain their preferred products at one-go. The strengthening of the future relationship
with the customers is seen. This is enabling the company to encourage consumers to purchase
more items in the future from the company (Alibaba, 2018).

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c) Discussion on the recent material on the company marketing strategy and discuss your
findings.
Alibaba is the leading e-commerce business. In very few years, it has gain phenomenal growth. It
is assumed that this remarkable growth of Alibaba has become possible due to its excellent
marketing strategy. The company has adopted an effective market segmentation or target market
strategy. Along with this, an efficient marketing mix strategy is undertaken that supports the
organization in achieving a substantial level of competitive advantages (Gentlemen, 2016). The
market research team of the Chinese giant supports the marketing team of the company in
devising the best marketing mix strategies for the organization. Furthermore, these marketing
strategies support Alibaba is building a long term relationship with its buyers and suppliers
(Milnes, 2019). In this way, the company has been succeeded to achieve long term sustainable
competitive advantages.
The company has developed and implemented efficient segmentation, targeting and positioning
strategies to achieve an extra edge over its competitors.
The STP analysis of Alibaba is as follows:
Segmentation
The company has utilized an effective blending of demographic, psychographic and behavioral
segmentation strategies. It is used to accomplish its business goals and objectives. The
segmentation strategies of Alibaba support the firm in fulfilling its missions as well as
transforming its business into the most successful one (Waca.associates, 2018). The company’s
strategic aim is to become a technologically advanced business organization. It supports the
consumer, merchants and other business organization ( Leadership Network, 2018). Regarding
this matter, the company encourages consumers, merchants, and businesses to leverage the huge
possibilities of the internet and e-commerce business (Ciim, 2019).
Targeting
The maximum business firms which exist in technologically driven e-commerce business use
different targeting strategies. Alibaba has also applied a different targeting strategy to target its
potential customers (Bhasin, 2018). The targeting process undertaken by the company is by
fulfilling the individual consumers’ preferences.
Positioning

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The company has used effective positioning strategies to position its products and services in the
mind of target customers. The positioning means where the product or service stands in the
consumer's mind. Alibaba mainly used usage-based as well as pricing strategies for positioning
its products or services. It is used to increase its revenue or income from various segments of its
businesses (Ongoche, 2018).
Besides this, the company has implemented efficient marketing mix strategies to accomplish its
strategic goals. The recent marketing mix of Alibaba is as follows:
Product
The core product of Alibaba is its e-commerce portal. It is regarded as the biggest business to
business (B2B) portal of the world. While other vital e-commerce portals like Amazon, eBay,
Mudah, etc., are providing business to customer (B2C) services. The key benefit of the Alibaba
e-portal is its ability to export to over 240 nations. Furthermore, Alibaba has a product like
Alipay (online payment gateway), China Yahoo, cloud computing, Autonavi, and Alibaba
Pictures. The company has stressed increasing its online presence in different countries including
the United States with its efficient product strategies (Bhasin, 2019).
Price
Alibaba has adopted a penetrative pricing strategy to increase its market penetration. The
company has a very relaxed pricing policy. It charges a very low commission to the businesses.
In this way, it allows the business to perform its business activities in the e-commerce site of
Alibaba. The low-cost nature support Alibaba in accomplishing fasted growth. As Alibaba
charges nominal fees compared to other e-commerce sites like Amazon, its market penetration is
more intense.
Place
Alibaba has implemented effective placing strategies. It has far as well as wide reach across
different countries in the world. The key advantage of Alibaba is its origination from China,
which is a manufacturing hub. Alibaba.com has a worldwide presence. Recently, Alibaba has
entered the US market with an IPO. The firm has developed its team in various Asian countries
so that its distribution channel is becoming wider (Weii, 2018).
Promotion
The company has adopted effective digital marketing and promotional activities to promote its e-
commerce portal. Alibaba uses digital advertising, hoarding, sales promotion, TV and radio ads

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as well as ads in print media like newspaper and magazine. It mainly promotes its B2B portal
along with its bulk suppliers.

d) Discussion on the social networking activities on the company and their purpose.
Alibaba follows a certain strategy to reach their customers. Alibaba uses social media to reach a
maximum of millennial. Customers will become loyal customers only if a company socially
engages with them. The marketer needs to provide topmost priority to their customers (Roman,
2015).
The organization always wants to make a strong customer base. Another foremost thing that
marketers want to achieve was to increase sales. The largest e-commerce Chinese Alibaba is
enjoying its success in its Taobao mobile app. Taobao is the consumer to consumer online
website launched by Alibaba in the year 2003 (Businessinsider, 2016). For promoting social
commence the company has invested a lump sum amount in the Taobao app. About 80 million
monthly users could chat in a special group. The users have to act. Including book travel tickets
and order takeout groups users could chat along with the purchase of goods (Forbes, 2016). The
main aim of implementing innovative features within the e-commerce app is to encourage
customers to visit their app frequently and for a longer period. The only motive is to transfer the
user's visits into sales.
Even it is found that the users of Taobao visit the app for more than seven times in a day and
about 20 to 25 minutes. However, if it is compared with another online app then it is found that
users normally spent their time for 9 minutes. Thus, the feature that is added by Alibaba is
unique and attractive. Alibaba is about to put more social features to the Taobao app. However,
Alibaba is expecting more rises in sales in the coming future due to its attractive social features
(Johnbessant, 2018). According to the western eye, the Taobao app may seem to be chaotic and
overwhelming but this specific app has resonated China young users (Wang, 2016). China users
spend more time on this site instead of spending time on other sites such as Amazon
(Digitalcommerce, 2016). This single app has helped Alibaba in producing more mobile revenue
in this very recent. Social commence has become the second-largest investment area for US
retailers in the year 2016. Moreover, sites like Facebook have started investing in social
commerce on their very platforms. With the success of Alibaba and recent investments by

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Facebook, the retailers have put their efforts in social commerce to drive their sales (Scmp,
2016).
Alibaba did not wrap up their app idea with Taobao only. They had also launched an app for
university students. The name of the app is ‘Real Ruwo'. They had targeted mainly university
students with the slogan "Real Life, Real You" (Lindvall, 2019). This app enables the students to
interact with each other without any interruption. Apart from texting messages students could
send their photos, images, and videos to their friends. This is especially applicable for the
students especially those are attending universities located in the Alibaba home city of
Hangzhou. Presently this app is available for iOS and android with only invitation code. This app
has certain special features such as for login they support face recognition (LEE, 2019). Different
variety of stickers, filters for the photo are also available in this very app.
Alibaba nemesis Tencent has also successfully ruled the large portion of China's social media.
The main success of Tencent lies in its online gaming industry (Lu, 2018). The entry in the
market and successful running of the games has helped them in becoming the top players in this
industry. Alibaba has again launched the messaging service Laiwang as a WeChat competitor in
the year 2013 (Jingli, 2019). Yet, despite an interesting and huge promotion budget, this app was
thrown out from the market. However, Alibaba is still trying to introduce some app that is based
on a college campus.

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