Analyzing the Chinese online-to-offline business dynamics: Case: Alibaba Group's Alipay

摘要

Research objectivesAs the rapid growing Chinese e-commerce market, the online-to-offline business dynamics gain more market power. However, this business dynamics approach lacks of theoretical framework support and detailed analysis. Therefore, this research study will start to analysis the overall condition of Chinese e-commerce industry. Along with the theoretical literatures, the framework is established to tackle business model, service process and the multi-sided platform effect. Lastly, an empirical case is chosen to detailed evaluate the platform dimensions, network effect, risks and opportunities.Data and methodologyThe research study is a qualitative research and descriptive analysis with some numeric indicating figures. By reviewing various literatures, the knowledge of creating an effective online business dynamics will be transferred to the empirical case. The case study helps to understand the Chinese online-to-offline business dynamics concretely. The data collected are mostly textual information from published reports, journals, and articles. The case company information are extracted from its official website and reliable Internet sources, such as Reuters, Bloomberg etc.Main findings and conclusionThis research study produces four main findings. First, the Chinese e-commerce overview is presented to give readers a broad picture on current development status. Second, The Alibaba Group's business model is examined from four domains. Alibaba Group, as the platform provider, aims to provide high valued services for both buyers and sellers under secured environment. They focus on gaining market share with flexible yet prioritize critical resources in partner selection. Additionally, the service process analysis matrix illustrates Alipay is a fast routine process with value adding features. Alipay is not only a payment method, but also an integrated application for users to improve user experiences. Lastly, Alibaba and Alipay are both multi-sided platform, which involves users, merchants, platform provider and social media. The strong network effect is observed as a snowball effect. The risks and opportunities are addressed for Alibaba.