Chapter 1: Introduction
1.1 Background and Motivation
Modern technological developments have seen e- commerce innovations which have enriched the business development opportunities through the multi- access networking. Such networks or even the channels have been promising due to the advantages of the qualified services, high geographical mobility as well as enlarged capacity. E-commerce has been on radical growth in China and has been observed as online mobile applications. According to Tinnilä and Vepsäläinen (2007), there is rapid development in the wireless network and the mobile information technology has empowered better customer experience which has played a vital role in shifting the power participation. Such developments have been experienced in Ali Baba Company which has prompted further economic analysis of the situation. It should be noted that business dynamics in China have proved vital to the global growth of the Chinese market (Kamel, 2005).
Alibaba is essentially an online company that made the business of the conventions. Through their innovation and development, they have been able to create a platform for connecting businesses rather than selling products hence, acting like a marketplace (Bassett, 2006). Some of the reasons it has was very successful are because it has ensured quality by utilization of the quality checks such as trusty worthy ratings and standard seals. However, e- commerce was very instrumental to the success of the company, especially in recent times. Despite the fact that e-commerce has been a controversial topic, it gradually gained momentum as it gained global acceptance. Many businesses in the Chinese market made use of e-commerce to win the market competition. Yin (2008) argued that such developments have seen relevant enterprises increase online advertising thereby, increasing online investment so as to attract the global market.
Another reason which was attributed to the success of the company is the management styles that they embraced. Good management style was always key to the success of any organization (Kehal & Singh (2005). In this regard, it is important to evaluate the style that best suits the organization before the adoption of any method. Since its establishment, the company saw many management styles depending on the person who is at the helm of management. When it was launched, the company saw only Jack as the autocratic decision maker who would make arguably all important organizational decisions (Laudon & Traver, 2012). However, this method would not last for long especially when Jack realized the changing dynamics of the Chinese markets. Moreover, there was a measurable change in the sociological issues which affected the business especially with the growth of economy and introduction of the internet. It is paramount to note that introduction of e-business affected the company management which led to adoption of a persuasive management style which proved very successful for the company.
1.2 Research Questions and Objectives
This research proposal seeks to establish the economic dynamics of Chinese markets with cross-examination of the Alibaba Company e-commerce integration and impact of the same on the success of the company.
- To understand the concept of e-commerce in China.
- To establish the factors influencing the online –to- offline dynamics of business as they impact on Alibaba Company.
- To investigate the factors affecting the Alipay platform.
In order to meet the aforementioned research objectives, the research questions below will be used.
- From an industry point of view, what is the Chinese e-commerce currently?
- How has the Alipay services by Alibaba Company impacted on the Chinese online payment markets?
- What are the economic impacts of e-commerce on the Chinese market which affects the Alibaba Success in the global market?
1.3 Research proposal structure
Chapter one of the research mainly introduces the research background as well as motivation for conducting this research. Also, the overview of Alibaba Company, as well as current e-commerce industry concerning the online to offline business dynamics, have been presented.
Chapter two of the research presents the literature review from various perspectives on the research topic. This chapter also explores the information presented by other researchers regarding e-commerce about the Chinese market and how Alibaba Company can position itself.
Chapter three of the research illustrates the methodology that will be used in conducting the actual research. Considering that the research takes into account both quantitative and qualitative aspects, the methodology was presented as a critical part so as to achieve the goals and objectives of the study.
Chapter four helped in linking the study objectives with the findings by revealing the results of the data analysis process.
Chapter Five provided the summary of the points which were highlighted in the findings as the study conclusions.
Chapter 2: Literature Review
2.1 Customer satisfaction
The success of any organization has been attributed to the customer satisfaction that the company can achieve. Some of the major factors that affect the customer satisfaction include the methods that the organization establishes so as to offer better services to the customers. Moreover, the economic situations across the globe have affected the manner in which the companies take important functions that affect the customer experience. According to Patton, (2012), e-commerce has been a significant boost by many organizations as they achieve their organizational goals. This is because they have been able to achieve value proposition among other things that are fundamental to a positive customer experience. Chinese companies including Alibaba have been on the forefront to articulate issues that are essential in developing a fundamental organizational position. Some of the essential issues included value proposition so as to deliver the satisfaction that would include wants, needs, as well as customer experience. It has also been noted that under the e-commerce, the value proposition has increased network connectivity which has enabled internet infrastructure (Chircu & Mahajan, 2006). It was noted that business delivery process, as well as the distribution channel, did migrate to the online which has been able to attract plenty of customers.
According to Saarinen (2006), value proposition in the Chinese market can be seen to have four major attributes which include personalization, convenience, ubiquity, and localization. These industries have been able to realize and enable ubiquity for the location as well as time matters. Also, value proposition in the Chinese market could be leveraged through notifications like applications, stock prices, and music (McLaughlin, Baker & McKenzie, 2000). It was noted that the agility, as well as the accessibility of the wireless network, has improved the quality performance for the users. Companies such as Alibaba have, therefore, a very important role to play in the development of technological integration of business and commerce. The other important factors that have been identified include the issue of market segmentation which has played a vital role in the Chinese market development to the global arena. Through the use of technology, targeted markets could easily be individualized especially for the mobile services like demographic, geographic, psychological, and social.
2.2 Technological impact
Research by Stanley and Ritacca (2014) established that Chinese companies have been making use of e-commerce so as to approach the customers more effectively. According to the research, such companies have been able to formulate different approaches that are best suited to the client demands. Also, Hawkins (2002) identified that technological development has necessitated for the service provision under the multi- access networks. Such developments have enabled the different inventions which have allowed a faster and more convenient approach to the customers. It should be noted that the digital transformation has generated incredible opportunities in the market for the business people which have facilitated both the customers and the companies for the visual enjoyment including a change of lifestyle (Lubbe & Van, 2003). Companies through the technical innovation as well as development allowed for more advances in service delivery and profit making.
2.3 Organizational domain
An organizational domain is a very crucial aspect in organizational achievement as it stipulates the capabilities as well as the current resources which address the delivery values and other customer concerns (Hagiu & Wright, 2015). It should be noted that Alibaba has been the most well- known online company that the whole world has benchmarked from. Although the aspect of technological development played a vital part in the success of the company, organizational management was a crucial consideration for the management. Unlike most organizations that have mainly been selling products and services, Alibaba connects businesses with each other hence, acting as a marketplace. To achieve organizational success, there is a need for the management to consider different cases which can impact on the company. Some of the issues that were identified by Chen and Dubinsky (2003) included economic impact on the local and international markets. In such cases, the different players in the company must take into account the various concerns that are adamant. Another critical issue that was identified in the research was the role of exports and imports to the organizational functionality. Some of the factors that enable global success include integration of the local practices with the international ones. However, all these can only be possible through a global network that is well- established.
Chapter 3: Methodology
3.1 Research design
The aim of the research is to evaluate the Chinese market and e-commerce industry and the impact it has on the success or lack of it of the Alibaba group Company. After a thorough examination of the e-commerce, a business model will be evaluated so as to understand the power of network and platform strength. To answer the research questions and to achieve the objectives of the study, both a quantitative and a qualitative approach will be used. A qualitative approach is founded since it seeks fundamental understanding of the research problem from the perspective of the local population. On the other hand, a quantitative approach is significant since it enables data collection which can be analyzed using statistical methods. This makes the approach very crucial in this research since it will allow statistical analysis of the data collected which can reveal various correlations. It should be noted that the investigation will consist of the three main parts which include theoretical applications, Chinese commerce market analysis, and the empirical case study. In this case, a qualitative research will help to explore the strength and interpret the complex textual description.
3.2 Pilot study
During the actual study, researchers will make use of a pilot study which is crucial in this type of research. Moreover, this will allow a case study which is relevant to the scenario to be utilized. A questionnaire will be developed which will aid the data collection process. The questionnaires will be administered to the respondents through emails for the selected sample. A pilot study will be very significant in addressing the issues that are anticipated in the research. Moreover, it is very easy to focus on the research questions once the study has been designed. Such an approach will be paramount in addressing the issues facing Alibaba and the impact that e-commerce is making on the organization. Furthermore, business information can easily be obtained when required. The data collected will be analyzed using statistical tools such as SPSS and Excel. This will allow Multivariate Statistics as well as a regression for the research data. Statistical analysis is of much benefit to a quantitative research as it allows viable conclusions (Ma, 2017).
3.3 Validity and reliability
Validity and reliability will be examined to ensure that the research is practical. These are very crucial so as to examine the quality of any research. To achieve this, some of the tests which will be conducted include constructing validity, internal validity, external validity, and reliability. Construct validity will be used so as to identify the concept for the correct operational measurements. Li (2008) identified that researchers need to cover all established steps so as to meet construct validity as well as other dynamic measures.
Chapter Four: Data Analysis
4.1 Understanding the Importance of e-commerce in China
|How frequent do you purchase goods and services online?
|between 1-5 times in a week
|Between 6-10 times in a week
|More than 10 times in a week
The frequency distribution table above revealed that online shopping has grown to higher levels in China. According to the analysis, a majority of the respondents with a frequency of 16 (40%) purchased goods and services online more than ten times in a week. Significant proportions purchased for goods and services online for 1-5 times and 6-10 times in a week with frequencies of 10 (25%) each. Only a small percentage of Chinese (10%) who don’t purchase goods and services online.
The bar graph showed that there were significant differences among pairs of respondent’s categories based on the frequencies of purchase of goods and services online. The chart revealed that there was a positive relationship between the number of Chinese clients buying products and services online and the frequency of purchase.
4.2 Effects of Alipay services by Alibaba Company impacted on the Chinese online payment markets
4.2.1 Scatterplot diagram
The study constructed a scatterplot graph to reveal the relationship between implementation of Alipay services and the effectiveness of Chinese online payment Market. From the graph, the plotted points were positioned in a rising trend as the levels of implementation of Alipay services and efficiency of Chinese online payment market increased. What this meant was that a positive relationship between Alipay services and Chinese online payment market was evidenced.
4.2.2 Regression Analysis
A regression analysis was used to detect the degree of the relationship between implementation of Alipay services and effectiveness of Chinese online payment market
|Table 4.2.2: Model Results
|Adjusted R Squared
|a. Predictors: (Constant), Alipay services
According to the analysis, a big proportion of the variations in the effectiveness of Chinese online payment market were explained by the implementations of Alipay services. The conclusion was made following the observation of the R-squared value which was equal to 0.718. Ideally, the value of R-square implied that 71.8% of the variations were explained by the implementation of Alipay services. The value of R revealed that the correlation between the two was equal to 0.847 implying that there was a strong positive correlation between implementation of Alipay services and the effectiveness of the Chinese online payment market.
|a. Dependent Variable: Effectiveness of Chinese online payment Market
|b. Predictors: (Constant), Alipay services
The variance analysis results yielded a computed F-statistic equal to 96.854 with a significance value of 0.000. This meant that the null hypothesis, which stated that the regression model was not significantly effective, was rejected. A conclusion was made that the model fitted to the data was useful and that it could be used to predict the effectiveness level of Chinese online payment market whenever the implementation level of Alipay services was known.
|a. Dependent Variable: Effectiveness of Chinese online payment Market
The model coefficient showed that the beta values were equal to 1.559 and 0.729 for the constant and Alipay services respectively. The values indicated that the equation representing the regression model was;
Where y was the effectiveness of the Chinese online payment market and x the implementation level of the Alipay services. According to the equation, the efficiency of the Chinese online payment market was expected to increase by 0.729 units for a unit change in the implementation level of the Alipay service.
4.3 Factors affecting the Alipay platform
|Factors affecting the Alipay platform
|Complexity of Alipay system
The study revealed that the most influential factor affecting the Alipay platform was internet convenience. The factors were supported by a total of 15 (37.5%) respondents. Other significant factors included security issues and complexity of Alipay platform with frequencies equal to 13 (32.5%) and 6 (15.0%) respectively.
Chapter Five: Conclusion
The study concluded that online shopping has grown to higher levels in China with a majority of the respondents bought goods and services online more than ten times in a week. A positive relationship between Alipay services and Chinese online payment market was evidenced. According to the study, 71.8% of the variations in the effectiveness in the Chinese online payment market were explained by the implementation of Alipay services. Moreover, the study concluded that the efficiency of the Chinese online payment market was expected to increase by 0.729 units for a unit change in the implementation level of the Alipay service.
The study revealed that the most influential factor affecting the Alipay platform was internet convenience. Other significant factors included security issues and complexity of Alipay platform.
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- What is your gender?
- What is your age?
- What is your occupation?
- What is your monthly income level?
|8000 and above
- How frequent do you purchase goods and services online?
|More than 10
- In your view, what is the level of implementation of Alipay in the systems which you use?
- In your view, what is the effectiveness of the Chinese online payment market?
- What do you think are the Factors affecting the Alipay platform?
|Complexity of Alipay system