Consumer Behavior Report

The purpose of this report is to demonstrate and analyze the consumer behavior trends in e-commerce services platforms, utilizing the case of Alibaba. The China’s consumer population and characteristic will be used in the analysis of consumer behavior and the response of Alibaba. Recommendations on the best strategies for companies to leverage on consumer behaviors are also provided.

Running Head: CONSUMER BEHAVIOR REPORT
1
Consumer Behavior Report
Student’s Name
Institutional Affiliation
03/21/2019

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Introduction
The purpose of this report is to demonstrate and analyze the consumer behavior trends in
e-commerce services platforms, utilizing the case of Alibaba. The China’s consumer population
and characteristic will be used in the analysis of consumer behavior and the response of Alibaba.
Recommendations on the best strategies for companies to leverage on consumer behaviors ar
also provided. China has a dense population, the largest population in the world. The Chinese
population I also the most responsive to the shopping culture (Peng et al., 2016). The Chinese
huge population coupled with a massive shopping culture serves as the best audience for the
consumer behavior analysis. The shopping culture made companies like Alibaba to succeed. The
variation of the population in China also provides the platform for evaluating the behaviors of
consumers (Ding et al., 2017). Consumers in China demonstrate a different kind of behaviors
that provide insight for companies to know how to target them, as described below.
Purchasing Situation and Target Market
Since Alibaba.com is an online shop, its target market is the global market. Despite the
factthat it specializes in China, the online shop of Alibaba extends across all the consumers
worldwide. However, the global market that Alibaba targets is that of a technology savvy
audience with an access to digital resources like power, mobile phones and internet accessibility.
The Alibaba Group Holding Limited is a Chinese multinational company that has
specialization in technology, e-commerce, internet, and retail. The company was founded in
1999 and provides the services of the consumer to consumer, business to consumer and business
to business services of sales through web portals, shopping search engines, and electronic

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payment services (Han, Xiao & Su, 2019). In this case, the main focus would be on the analysis
of the consumer behavior on the shopping platform of Alibaba through its website, Alibaba.com.
Alibaba e-commerce platform operates in a country that contains the world’s largest population,
China. China bears the largest number of internet users all over the world meaning that it has the
largest activity of e-commerce than any country in the world. One major consumer characteristic
shaping consumer behavior in China is Single’s day (Sun et al.,2015). Alibaba set aside a day
that is called the Single’s day, which occurs every year in November, the 11th. This is China’s
largest event in shopping rivaling other similar days in other countries (Liu et al., 2016). For
example, Alibaba’s Singles’ Day has overtaken the Black Friday of Jumia, and Cyber Monday,
when combined. CNBC reported that in 2018 Alibaba’s 24-hour shopping craze; the Single’s
Day registered whopping billion dollars sales within a time frame of 90 seconds. Only after five
minutes of Sales, the day had registered the same value of items as Amazon would on a prime
day. The most recent Single Day registered a total sale’s value of 30.8 billion dollars. Out of the
1.04 billion orders that were made, 90 percent occurred on a mobile device (Shen & Tan, 2018).
That is according to business insider and internet statics. A total of 1.6 billion network attacks
were blocked successfully, during the shopping spree (Peng et al., 2015). Thanks to the
technology of artificial intelligence, it was possible to make attractive recommendations for large
amounts and volumes of products to online consumers. Artificial intelligence was also key in
service, serving to enable the service of more than a billion translations and services to global
users. A new report by AliResearch and The Boston Consulting Group (BCG), the research arm
of Alibaba reports that as China’s economy continues to grow and mature, there is more and
more diverse. There is a rise of emerging sub-classes of buyers with distinct or unique needs and
preferences. Despite the slow growth of China’s, there is an increasing in consumer spending by

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a margin of 10%, annually. The spending margin of 10% is faster than all the countries in the
world. It has been projected that by the year 2021, China will be the second largest consumer
market in the world. It will then add $1.8 trillion in consumptions that are new; it will add
approximately 40% from the past year’s $6.1 trillion level.
Consumer Behavior and Factors of Customer Decision Making Process
Owing to the above findings, it is evident that Chinese consumers have the behavior of
low tolerance for latency. For the Chinese consumers, it is evident that the Chinese consumers
are normally impatient and therefore, performance is key. The tendency of the Chinese
consumers to be impatient and bear low tolerance to latency provides necessary pressure to
companies and businesses. The businesses that will not stand the pressure of having the right
capacity to deliver goods according to the demand will be locking out naturally. Therefore, the
consumer behavior of the Chinese population is a necessary one because the quality of
businesses and companies will be streamline to hit the highest standards. In that case, Alibaba
had to utilize the technology of Artificial intelligence to meet the standards of the consumer

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behavior of low tolerance (Liu et al., 2016). The best way to meet the expectations of consumers
is to be innovative. Innovation using the tools of technology is the best option, as demonstrated
by the Alibaba’s case. Technology is not only used in the process of developing efficiency but is
very instrumental in managing the security of the business. With such a huge and massive
shopping culture, the process of purchasing ought to be smooth, easy, convenient, secure, fast
and friendly (He, Zhan & Hu, 2018). Because of the low tolerance for latency nature of the
Chinese consumer market, the development of a shopping system and culture bearing the
characteristics above would be important.
It is also noteworthy that Chinese consumers spend a lot of time shopping. According to
research, on average, a Chinese spends three times more than a shopper who is American.
Therefore, it provides a better chance for a selling company to increase and improve its capacity
to meet a huge demand for shopping time. Considering the population of the Chinese and the
world in general continue to increase, the increasing population could be viewed as a
appreciation nature of land. Therefore, businesses need to invest wisely in the process of
increasing capacity. Boosting capacity is not just building more stores and expanding physical
business structures. In fact, that strategy is quite dangerous with the changing trend of business.
The increasing capacity involves understanding the needs of consumers and offering the exact
needs at any particular time in a convenient and easy way. Globalization has shifted the tastes of
consumers and consequently the behavior of consumers. According to Veblenian Social-
Psychological model, consumers have the tendency to be influenced by a social class or group in
their purchasing behaviors. With the age of technology, the sources of influence for consumers
have changed. For example, consumers in African would stumble upon western tastes and types
of goods that are consumed by international personalities. With such a case, that consumer will

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not have the source of influence being from his/her immediate environment. The source of
influence would originate instead from the international and external environment. Therefore,
companies and businesses must not be fixated but flexible to identify the needs of consumers at a
particular time. They should also be flexible enough to change with the changing needs and
tastes of consumers. Boosting the capacity also includes the improvement of the shopping site
security. Since online shopping involves electronic payment services, it opens a huge opportunity
for attackers to steal from shoppers through hacking. The management of such a huge capacity
also requires a strong supply chain network. With billions of sales made in a single day, Alibaba
has a strong, stable and reliable network of distribution. For a shopping audience bearing the
characteristic of China’s population, a system could shut down is there is poor planning.
Also, the Chinese middle class rapidly grows creating a huge and increasing demand for
the foreign brands that have the premium nature. With an increasing middle class, there is an
increasing demand for products and services that bear luxury and are not locally found.
Therefore, an online shop provides the best platform to get such a population of consumers, as
Alibaba did. Owing to the fact that the online platform provides the ability to search, view, learn
and order foreign products, it provides the best platform for the growing middle-class nature of
consumers (Han & Guo, 2018). Online shopping companies must then provide platforms with
high quality of performance. Online shopping provides the best convenience for consumers but
the problem is the ability of consumers to trust the system. For the developed countries like
China, the diffusion of technology and the culture of online shopping does not have a problem.
The main problem lies with the underdeveloped and some of the developing countries where the
diffusion of technology has not taken root. That offers a challenge for the online businesses to
strive to target such countries because there is the place with limitless opportunities for further

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growth of the online shopping businesses. There should be no technical hitches to online
shopping websites like crushing. The security of the web portals should also be the best to secure
the trust of consumers. Such platforms must contain the capacity for high speed and must have
the capacity of holding a huge number of transactions at a go. For the achievement of such
capacities, it will be important to leverage the latest technologies. For example, outdated
websites or websites that were created using outdated technology stands a huge chance of being
hacked (Wang et al., 2015). Therefore, the most recent technologies should and must be used to
ensure that security is upheld. Such platforms or websites must also utilize artificial intelligence
technology for purposes of achieving the demands of consumers in searching through the system.
It is also evident that the Chinese consumers, as demonstrated by Alibaba’s case,
characterize a consumer behavior of the fact that they create the pressure of an intense brand
competition which also drives constant innovations (Godey et al., 2016). Examples of such
innovations are; New retail, virtual reality, online and offline, IoT and smart logistics. As the
number of consumers and shoppers increase at an alarming rate, the number of companies
offering shopping services also climbs (Thøgersen et al., 2015). That creates a huge competition
that further drives innovation and the generation of ideas. Therefore, marketing technologies
continue to grow because the main target is the consumer’s attention. Companies must
understand that strong branding is neither the design of the logo nor the name of the company. A
strong brand is more than just a name and picture but encompass a lot of things. Quality and
customer relationship is one of the main factors that determine branding (Wang & Foosiri, 2018).
Consumers must be able to identify with a certain product in the manner he/she was treated the
last time, and cannot wait to go back. For businesses to thrive, they should move away from the
culture of targeting profits to the culture of creating lifetime experiences that are memorable.

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However, for a strong brand like Alibaba, there is no need to invest too many resources in
marketing. The emerging companies would want to offer better alternatives that would woo
consumers on their side and abandon the oldest brands. Innovation does not end with the
marketing strategies but with the quality of products and services (Zhang & Benyoucef, 2016).
For online shops like Alibaba, what matters the most is the quality of the e-commerce website
and the companies that the website transact business with. Some e-commerce companies sell
their own products and services while others just partner with companies that produce goods and
services (Su et al., 2017). In the case of the e-commerce websites that partner with the companies
producing goods and services, it will be important to consider the quality of those companies.
That is because it will directly translate to the quality of the e-commerce website.
Theory of Reasoned Action
Martin and Fishbein and Icek Ajzen proposed this theory. The theory of Reasoned Action
recognizes the significance of pre-existing attitudes in the process of decision-making.
Consumers make decisions based on a strong reason. In such a case, it could place the best deals
to appear at the strategic positions of the website in the early hours of a big shopping day. With
such a strategy, the company would have sold the products are normally performing poorly, and
those that perform well, as a result of the timing strategy. Businesses must understand the
intentions and attitudes of businesses for a better understanding of their behaviors. The fact that
the Chinese consumers buy goods and services concurrently should provide the companies with
the opportunity to provide the right amount of stock (Manrai, 2018). A high volume of
transactions in a concurrent fashion triggers a message to the companies that a huge amount of
stock is required. The hitches of failing to present the right amount of stock or the stock running

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out should be avoided at all cost. Understanding the nature of Chinese consumers to do massive
volumes of transactions that are concurrent informs the decision of manufacturing companies
and online shop companies.
Another characteristic that stands out is the fact that the majority of Chinese consumers
undertake their shopping transactions through the use of mobile devices. Through Alibaba's case,
the popularity of mobile devices usage in China is higher than the use of credit cards. Most of the
Chinese consumers have opted to carry around transactions on their mobile phones instead of
carrying money in their wallets and pockets (Lin & Chen, 2015). That is an important factor to
consider while undertaking business. Companies should understand the behavior of consumers
and invest more in mobile applications (Wang & Somogyi, 2019). E-commerce websites, for
example, must develop highly efficient mobile applications that serve the same purpose as
websites. E-commerce companies also need to market mobile applications through their
influence on their popular e-commerce websites. The majority of the consumers will be
impressed with mobile applications and easy payment systems on the platforms (Wang et al.,
2016). The convenience of mobile transactions provides the obvious reason why consumers
prefer the use of mobile phones to shop than websites. With a mobile phone, a consumer can
basically order any product anyway and anytime on his/her hand. Mobile manufacturing
companies must also track this trend to invest in mobile devices that are tailor-made for online
shopping. The mobile phone technology serves as a business revolution that must be utilized by
businesses for boosting sales. Advertisements must target social media platforms because
consumers use smart phones majorly for purposes of accessing the social media sites.

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China’s flexibility, scalability, ease of use and performance are the main factors that can
play a key role in the gain of customers, in China. Because of the dynamic nature of businesses
and consumer behaviors, there is a great need for the development of flexibility to acclimatize to
any changing trend. The population of Chinese consumers is very high. That means that the
demand for goods and services is high. The dense population is also squeezed up in a central
position. In that case, there should a lot of flexibility and ease of use in online shopping
platforms. To achieve great success with the Chinese market, it will be important for companies
to be scalable, flexible and easy to use.
Conclusion and Recommendation
Conclusion
The development of a strong online shopping culture provides a new trend in consumer
shopping behavior. Companies and businesses must, therefore, streamline their operations and
the manner in which conduct business to meet the demands of the changing trends in consumer
behaviors. Investment in technology should be the main objective and target of companies
because that is where consumers are heading to. Alibaba was able to leverage technology and
still develop new and innovative ways of staying close to technology. According to Alibaba’s
case, strategic positioning to augur well with consumer behavior is one of the main recipes for
success.
Recommendation
The best strategy to apply for success is through the investment on the online platform,
the latest technologies and the development of a strong brand. Failing to make an online presence
is equal to planning to fail. For companies and business to thrive, they need to understand the

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behavior of consumers and what they want. The main question then would be how? The ‘how’
part could best be answered through technology (He & Wang, 2015). Because of the fact that
almost all the consumers in the current age are searching through the internet for shopping is a
reason enough why internet presence should be an emergency need. Companies must invest their
resources in artificial intelligence technologies to understand the behaviors of consumers in a
convenient, accurate and cheap way (Yuan et al., 2016). For instance, it would be easier to rely
on search engines and artificial intelligence systems to acquire all the relevant information about
consumers other than undertaking interviews and surveys. The technique of artificial intelligence
would be cheaper and fast. The decision-making process could then utilize the outcomes of
artificial intelligence. Companies must also brace themselves to comply with the latest payment
technologies like the use of bitcoin currency. The block chain tehnology should also be used
because of its high security tendencies. Although the Block chain technology is not as old as
other tehnologies, it is one of the most promising and most secure platforms. Therefore,
companies should invest more in the research of the block chain technologies to boost the
security of the systems. With the increasing trend of online shopping, hackers are also increasing
their knowledge and skills of maneuvering the digital technologies. To stay abreast of the
security issues with the internet and have the confidence of consumers, businesses must invest in
the best security technologies like block chain. As part of the consumer behavior influencers’
trust is the most influencing factor to the behavior of consumers. Therefore, companies must
invest in trust by reducing incidences of theft and compromise of information. That could best be
achieved if companies could invest in cyber security. Investment goes beyond hiring the best.
Companies should lead research using the selected human resources teams to find the best ways

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of curbing insecurity in the web. That way, the security of systems will continue to rise to great
levels where hackers will not overtake legal businesses.

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