A case study of Alipay, based on the SWOT, Porter's Five Forces, Business Model Canvas and Blue Ocean Strategy.

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