ALIBABA – The Yangtze River Crocodile

POLITICAL FACTORS ECONOMIC FACTORS

OPPORTUNITIES - Alibaba’s relationship with the -

Chinese government : close liaison
because many investors are state-
owned enterprises.
- Political connections : links with
“princelings” (= children of important group)
political leaders). They are big investors
in the company.
- The government promotes e-
commerce.
- Foreign competitors are kept out of - Good international position : good
the Chinese market
THREATS - President Xi Jinping’s sweeping
political and economic reform
campaign threatens Alibaba’s
position domestically.
- Some princelings linked with
Alibaba accused of corruption.
- Political connections are required to - Greater competition for Alibaba
have a prosperous company
SOCIAL FACTORS
OPPORTUNITIES - The percentage of Chinese using
internet went from 34.3% to 51.3%
in 5 years
THREATS - Ageing population in China :
Chinese parents till reluctant to
have more children despite of the
relaxation of the famous one-child
per family rule in 2013, 2030 a
quarter of the Chinese population
will be over 65.
- Fall of the Chinese workforce (by
about 3 million workers a year).
LEGAL FACTORS
Several investments from famous
banks (western investors).
- Redemption of a part of the group
from big companies (+ some other
companies hold share parts of the
- The competition with JD makes the 2
companies stronger
- Promising signs in favour of the
globalisation strategy
position in many countries.
- The Chinese ecommerce market went
from 4.6% to 16.2% in 5 years making
it the largest in the world
- E-commerce is viewed as a key area for
future economic growth
- 10 % fall in Alibaba’s share price.
- Changing economic conditions in China
(decrease of the growth rate) + slower
economic growth.
- Slowing in the rate of growth of the
Chinese e-commerce market.
(American rival E-bay)
- local challenge from JD.com : twice as
much domestic growth than Alibaba
TECHNOLOGICAL FACTORS
- Entering in smartphone e-commerce
- Alibaba’s smartphone screen-sizes are
less attractive to advertisers
-
ENVIRONMENTAL FACTORS

OPPORTUNITIES - Beijing foreign ownership rules :

limited recourse against abuses by
Chinese companies’ managers for
foreign shareholders
 - VIE (Variable Interest Entity)
structure -> cases of VIE
controversy
- A combination of cultural, linguistic
and government policy factors is
favourable to Alibaba because it
takes away Western internet
companies from the Chinese
market.
THREATS - Publication of an investigation by - President Xi restrained the expansion
China’s State Administration for of high polluting industries.
Industry and Commerce into
Counterfeit goods and fake listing