Stakeholder Analysis of Alibaba | Report

BUSINESS STAKEHOLDERS

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Executive Summary
 The report is based on stakeholder analysis of Alibaba to analyse their roles, interest
and level of influence. Alibaba is one of the leading e-commerce platform founded in
1999.
 Alibaba various important functional areas has also been elaborated help the business
to achieve its strategic goals.
 Alibaba stakeholder matrix has been drawn based on power and interest.
 Stakeholder analysis helps Alibaba to develop various strategies proactively to reach
near to the vision.

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Table of Contents
Background information............................................................................................................3
Alibaba functional areas.............................................................................................................3
Internal and External stakeholders and their roles.....................................................................5
Internal Stakeholders and their roles......................................................................................5
External Stakeholders and their roles.....................................................................................6
Nature and degree of main stakeholder’s interest and implications of conflicting interests.....7
Level of stakeholder influence...................................................................................................8
Alibaba Stakeholder Matrix.......................................................................................................9
Comparison with industry........................................................................................................10
Summary..................................................................................................................................11
References................................................................................................................................12

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Background information
The e-commerce market is undoubtedly one of the most rapidly growing industries
globally. In addition, with the implementation of new mobile technology, the number of
online buyers are also increasing. As per research based in 2019, user penetration is 52.3 %
and it is expected to hit 61.1% by 2023 (statista.com, 2019). It is difficult to measure scope of
e-commerce market. One of the biggest segment of e-commerce is online retail sector, which
is ruled by sales of consumer apparel, electronics and accessories. With the increase in
competition, digital advertising also becomes a part of e-commerce segment as it allows
companies to build a strong presence online and to increase brand awareness.
Alibaba Group is known to be Chinese e-commerce company offers wide array of
online and mobile services. Jack Ma incorporated the company in 1999 as an online
marketplace to purchase from Chinese producers. The company dominates internet retailing
in China where it powers 80% of online commerce (Jung, Ugboma & Liow, 2015). In
addition, Alibaba Group also operates all around the world with having its operation in more
than 200 countries. In 2019, the company revenue stood around US$56. 152 billion
(campaignasia.com, 2019). The company vision is to build the future infrastructure of
commerce, and their mission is to make it easy to do business anywhere. In relation to this,
recently Alibaba Group launches “A100”, a strategic partnership program that provides
business a holistic one-stop solution to boost their digital transformation (businesswire.com,
2019). Their corporate value encompasses passion, integrity, commitment, teamwork and
putting customer first.
Alibaba functional areas
To support for their business and services, various functional areas of Alibaba are stated
below –
 Marketing and Promotion – To increase profitability and sales, this functional area
of the company aid in supporting Alibaba strategic decisions. In 2017, Chinese e-
commerce company Alibaba invested 8.8 billion Yuan in promotional and advertising
activities (statista.com, 2019b).

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 Design – To improve the experience to the client and customers, the company adopts
various practices such as crowdsource design service, affordable testing platforms,
and many more. It helps the company to conveniently reach to the target customers
with a better experience. One of the leading practitioners of this area is Paul Fu,
administrator of user experience at Alibaba.com. With team of designers and
developers, he implements various changes to the site of Alibaba with 36 million
users, more than 6,000 categories of products and that functions in 200 plus countries.
 Legal Responsibilities – Alibaba is operating in 200 plus countries and for
undertaking effective operations and functioning, it is important for the company to
comply with all significant legal necessities related to patents, licensing and
intellectual property rights.
 Human Resource – Alibaba Group is one of the biggest employers in the country
with employing 102 thousand fulltime employees. The company also operates AGTD
i.e. Alibaba Global Talent Development aimed at building global talents in Alibaba
(alibaba.com, 2018). This program helps members to gain in-depth business
knowledge and culture experience.
 Communication – In this functional area, Alibaba ensures that all their divisions get
informed about company new policies and practices within the prescribed time. It
allows providing better response to consumers relating to the products and services.
The communication response effectiveness also matters before and after the purchase
of any product by the consumer. Prompt response and feedback from the company
towards customer query results in higher loyalty.
 Finance – It is one of the most important functional areas of Alibaba that help the
company in its expansion, diversifications and also add fund to other business
divisions. In 2018, Alibaba spent a record of $41.6 on various business areas from
original content to product development (Kharpal, 2019).
 Engineering – Usually, this functional area is related to company cloud system and
private label products where their products are manufactured under various phases
and also in development of IT and cloud infrastructure.
 Research and Development – This functional area of Alibaba helps in strengthening
the business model of Alibaba. Alibaba Group also stated that the company is
planning to invest more than $15 billion in the next three years into global research
and development (Phem, 2017). It helps the brand to bring innovative products into
the global markets outside China.

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 Information technology – Alibaba information technology helps the business in its
product life cycle with maintaining business relationships. With its information
technology, there is a constant streaming of data in real time with their systems
becoming increasingly intelligent. The company also have its own cloud
infrastructure that offers integrated suite to their business by offering scalable, secure
and reliable computing solutions.
 Quality Assurance – In this functional area, the management of the company ensures
that all the products available on their e-commerce platform fulfilling necessary
quality standards as it will help the company to provide assured products to its
consumers.
 Legal requirements – The legal department team of Alibaba is required to ensure
that all the company operations fulfil necessary deeds of government in all the
respective country in which the company is operating. In addition, the company may
need to develop positive bonds with various regulatory authorities in order to maintain
its sustainability.
Internal and External stakeholders and their roles
The internal and external stakeholders of Alibaba are shown below with their
associated roles and responsibilities –
Internal Stakeholders and their roles
Alibaba internal stakeholders include the employees, management, investors and
board of directors. As stated above, Alibaba has employed 102 thousand fulltime employees.
The company allow employees to come together to discuss their past and their future during
special occasions. The company aims to foster an open and transparent atmosphere within the
organisation where opportunity is provided to every team member and their view are valued
(Xu et al, 2017). The role of employees is to align their individual goal with the Alibaba
strategic goals to achieve the company purpose and objectives in an effective way.
The management team in Alibaba includes senior management and leaders who trail
and convey down the Alibaba strategic purpose to each and every department in the
organisation including the employees. They are responsible for smooth flow of

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communication with thin whole of organisation structure. It helps the management to take
quick actions in relation with the business environment variables and thus achieving
competitive edge in the market. Investors are called to be those individuals, who buy stake in
the company while seeking it as a profitable venture from the future perspective. For
example, Blackrock Incorporation is the third largest shareholder in Alibaba with 67.7
million shares (alekbo.com, 2018). These investors help the company in further development
and market expansion.
Lastly, board of directors are also known to be as internal stakeholders of the firm
who are responsible to ensure the organisation prosperity by collectively directing the affairs
of companies. Some of the key members in board of directors include Jack Yun Ma
(executive chairman), Joseph C. TSAI (executive vice chairman), Daniel Yong Zhang
(director and CEO) and Masayoshi Son (Director).
External Stakeholders and their roles
In relation with Alibaba external stakeholders, it includes government,
consumers/merchants and retailers, competitors and suppliers. The consumers/merchants and
retailers of Alibaba use the company e-commerce platform to do transaction with another.
The digital economy has been developed around the Alibaba platform consists of these users,
strategic alliance partners and other businesses. The company has 8.5 million annual active
sellers (Smith, 2019). The next key external stakeholder of Alibaba is government who
expect Alibaba Group to act responsibly and ethically in all areas of operations and business
units. In addition, Alibaba is operating in more than 200 countries where they required to
comply with various rule and regulations associated with licensing, taxation and intellectual
property rights. The key role of government is to ensure that no other firm is influenced with
the market competitiveness of Alibaba with offering fair chance to enter into the e-commerce
industry. For example, US government is continuously watching on Alibaba operations as the
government believe that the company is selling high volume of pirated goods
(marketwatch.com, 2019).
In external stakeholders, competitors also hold a distinct position as they are
influenced by Alibaba global market reach, innovative business model and larger number of
customer base. Some of greatest competitor of Alibaba includes Walmart, Amazon and

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Jingdong. The role of these competitors is to target Alibaba by attracting new users and
coming up with innovative products and differentiation. At last, suppliers are also stakeholder
of Alibaba who seeks a platform to sell their products to millions of buyers in a cost effective
way. Alibaba Group has supplier in almost all categories including apparel, electronics,
energy, environment, gifts and crafts, home appliances and so on.
Nature and degree of main stakeholder’s interest and
implications of conflicting interests
The nature and degree of Alibaba main stakeholder interest with conflicting interest
includes –
 Customers – Alibaba has a huge customer base and their corporate value also help
the company to keep customers value and expectations firstly in forming strategic
goals. Customers of Alibaba seeks convenience and accessibility from the company
and this must be fulfilled by the company in order to gain competitive advantage
(Kim, 2018). For example, ecommerce giant Alibaba has called for tougher laws and
bigger penalties against individuals trading counterfeit goods in China. However, this
not leads to boycott of their products as company handle the situation very firmly.
 Government – The focus of this stakeholder is to ensure that company is not
harming to consumer group in any way and they are accepting all the regulations
duly. The conflict of interest here will only arise if Alibaba did not consider
effectively on government regulations. It may lead to ban of products of company or
any sort of penalties.
 Employees – The employee interest is related to proper compensation and career
growth in the company. Here, the conflicting interest can arise if company did not
provide satisfactory environment to employees. It can also lead to employee turnover
or showing ineffectiveness to work at full potential.
 Media – Media is also having a high degree of interest in Alibaba operations and
practices. Alibaba goodwill and brand image can be improved if the company
provide true information requested by the media.
 Suppliers – The suppliers as a stakeholder show interest in building long term
relationship with the company so that to do various transactions across the e-
commerce platform. However, conflict of interest may arise if company put complex
regulations on them or charge high commission.

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Level of stakeholder influence
A well rounded approach that includes an understanding of stakeholder influence
normally increase firm long term viability and success. For instance, there will be low
stakeholder influence in case of Employees and being a reputed company in e-commerce
industry, it is easy for the company to attract more talented pool. However, Alibaba is also
mandatorily to develop long-term relationship with the employees in order to be called as
employer of the year. It can also be called a company social responsibility to support its
employee in every cause.
Considering consumer, they pose high level of influence over the company
functioning and goodwill. In case of Alibaba, it is important for the company to offer top
priority to these stakeholders. In addition, customers can also easily switch to the other
competitor if the company did not provide them innovative products or service (Teece, 2010).
For instance, Mobile shopping is one of the increasing trends towards online shopping.
Alibaba can use various algorithms to note down in-app behaviour of every customer for
framing necessary strategies. Government as a stakeholder also has a high level of influence
as they expect from firms to behave in legal and ethical ways. As Alibaba has its operations
in various countries, these stakeholders can also be considered a threat to the organisation in
relation to its market competitiveness.
Media is also one of the external stakeholders who have high level of influence over
the business functioning of Alibaba. For instance, if the company is doing something good
for the society and when observed by the media, the publicity of company will automatically
be enhanced resulting in greater sales and revenue. As Alibaba has grown to be a big brand,
supplier will have low influence over the company as company can source for new suppliers
easily who are ready to accept their prescribed guideline and policies.

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Alibaba Stakeholder Matrix
P
o
w
e
r
Interest
Government
Shareholders
Customer
Competitor
Employee
s
Manage Supplier
s
Board of
Medi
Retailers
High Power, Low Interest High Power, High Interest
Low Interest, Low Power High Interest, Low Power

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Comparison with industry
In comparison of e-commerce stakeholders with retail supermarket stakeholders, it
can be said that customers of both industries are different and so as their value proposition.
For instance, e-commerce customer can be any who are using platform and website to buy
goods and products online and delivered it on a specific place by sitting just at home. This
offers customers convenience and accessibility value proposition saving users time in the
buying process. On the other side, retail supermarket industry customers are different as they
need to visit various convenience stores of the company to purchase the products as per their
needs. It offers value proposition in terms of quality and social (employment opportunity).
Considering government rules and regulations in case of retail supermarket chains,
various laws and regulations are developed to control the level of competition harnessed by
big brands. For instance, both Coles and Woolworths in Australia creates duopolistic nature
of market (Keith, 2012). Hence, federal government has taken various steps to control this
market competitiveness in order to provide equal chance to new players in the industry. On
the other hand, government ensures that no fraud can be made by any e-commerce company
against the customers and so they receive true and original products. Suppliers in retail
supermarket are the individual farmers and other small retailers where in case of Alibaba (e-
commerce industry), suppliers also termed as retailer selling a large number of products to
the customers using various e-commerce platform. Competitor also has online presence under
e-commerce industry where it is mandatory to have physical infrastructure to commence the
business in retail supermarket chain.

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Summary
The stakeholder analysis of Alibaba key external and internal stakeholders provides
various ways of stakeholder engagement to achieve various strategic goals of organisations.
When any business develops on a big scale, the stakeholder interest and roles are starts
changing forcing organisation to meet their expectations. The key stakeholders that are being
identified in case of Alibaba include customers, suppliers, investors, board of directors,
media, government, competitors and suppliers. All these positively or negatively impact
organisation in achieving with its organisation mission. Being one of the e-commerce giants,
it is their responsibility to gain in-depth knowledge of these stakeholders in order to
anticipate associated future uncertainties.

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References
alekbo.com. (2019). The Top 5 Alibaba Shareholders. Retrieved from
http://alekbo.com/news-line/the-top-5-alibaba-shareholders.html
alibaba.com. (2018). ALIBABA GLOBAL TALENT DEVELOPMENT (AGTD). Retrieved
from https://agla.alibaba.com/
businesswire.com. (2019). Alibaba Launches A100 Strategic Partnership Program. Retrieved
from https://www.businesswire.com/news/home/20190110005806/en/Alibaba-
Launches-A100-Strategic-Partnership-Program
campaignasia.com. (2019). Retail engine drives Alibaba to 51% revenue rise. Retrieved from
https://www.campaignasia.com/article/retail-engine-drives-alibaba-to-51-revenue-
rise/451729
Jung, J. C., Ugboma, M. A., & Liow, A. K. (2015). Does Alibaba's magic work outside
China?. Thunderbird International Business Review, 57(6), 505-518.
Keith, S. (2012). Coles, Woolworths and the local. Locale: The Australasian-Pacific Journal
of Regional Food Studies, 2, 47-81.
Kharpal, A. (2019). Alibaba shares soar as market looks past the company's record $41
billion spending spree in 2018. Retrieved from
https://www.msn.com/en-sg/money/topstories/alibaba-shares-soar-as-market-looks-
past-the-companys-record-dollar41-billion-spending-spree-in-2018/ar-BBSZ1rt?
li=BBr8YXL&c=10056950219509673286&mkt=en-us
marketwatch.com. (2019). Alibaba is on U.S. government’s watchlist because it sells ‘high
volumes’ of pirated goods. Retrieved from
https://www.marketwatch.com/story/alibaba-on-us-governments-watchlist-because-it-
sells-high-volumes-of-pirated-goods-2019-04-25
Pham, S. (2017). Alibaba is investing $15 billion in global tech research. Retrieved from
https://money.cnn.com/2017/10/11/technology/alibaba-billion-investment-united-
states/index.html

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Smith, C. (2019). 120 Amazing Alibaba Statista. Retrieved from
https://expandedramblings.com/index.php/alibaba-statistics/
statista.com. (2019). eCommerce. Retrieved from
https://www.statista.com/outlook/243/100/ecommerce/worldwide
statista.com. (2019b). Advertising and promotional expenses of Alibaba Group from 2014 to
2017 (in billion yuan). Retrieved from
https://www.statista.com/statistics/685796/alibaba-ad-spend/
Teece, D. J. (2010). Business models, business strategy and innovation. Long range
planning, 43(2-3), 172-194.
Xu, X., Li, Q., Peng, L., Hsia, T. L., Huang, C. J., & Wu, J. H. (2017). The impact of
informational incentives and social influence on consumer behavior during Alibaba's
online shopping carnival. Computers in Human Behavior, 76, 245-254.