1. Strategic Case:
Alibaba’s Expansion
By Jean-Baptiste Bard

2. Summary
1. Introduction
2. Customer Insights / Diagnosis
3. Alibaba’s Structure
4. Challenge
5. Trends
6. Strategic Propositions
7. Benchmark Materials

3. Introduction
Technological progress and the large use of
smartphones/tablets lead me to question
the new ways of online consuming.
I decided to focus my work on Alibaba
which gained a better reputation and
growth since the company’s initial public
offering in September 2014.

4. Insights / Diagnosis
What are the consumer’s insights toward the
Alibaba brand?
1) The products and services are low quality
2) Defiance toward foreign brands and specifically
Chinese
3) Alibaba doesn’t offer B2C solutions, it’s only a B2B
platform, for professionals only
Diagnosis: The Alibaba brand suffers of a lack of quality
and security perception from the customers. At this time,
most of e-commerce customers don’t know the B2C
subsidiary called Aliexpress and still think it’s reserved to
B2B transactions.

5. Alibaba’s Structure
Alibaba, founded by Jack Ma in 1999, is primarily an
e-commerce platform serving wholesalers, retailers, major
brands and consumers. Its websites and apps generated
$250 billion in sales in 2013, the company reported.
Alibaba's three Chinese e-retail properties are called
Taobao Marketplace, Tmall and Juhuasuan. It also runs
AliExpress and Tmall Global, and wholesale e-commerce
sites Alibaba.com and 1688.com. Alipay is its
e-payments company.
Aliexpress has a special position in the group as it is the
exclusive B2C platform in the group. As I’m focusing on the
rapport between e-commerce platform and consumers
behaviour, I will mostly refer to Aliexpress by using the
group name of Alibaba in this report.

6. Challenge
How to add Alibaba
in the customer online buying routine ?

7. E-Commerce Trends
Products
Superfood & Metabolism
Booster
Re-Use Products
Naturality Purpose Canabis Expension

8. Superfood & Metabolism Booster
Superfoods are a special category of food found in
nature. By definition they are calorie sparse and
nutrient dense. They are superior sources of anti-
oxidants and essential nutrients (i.e. nutrients we
need but cannot make ourselves).
Amazon already dispatches it’s food market with
different certifications like Gluten free or Vegan. The
next food trend is focused on the health benefits
and how food can optimize the function, health &
appearance of the body. This is why more and more
brands are launching superfood and metabolism
booster like in cosmetics for example.
Why it’s interesting: While e-commerce platforms start
selling food & cosmetics, it could be interesting to
answer the growing needs for products that help our
body and metabolism.

9. Re-Use Products
A new trend is noticeable in the consumers
mindset when it comes to buy new products.
« Old is New » has never been as meaningful
as in 2015. Consumers today are more
attracted to the quality, the origin and the
history of a product than of the brand new
one under plastic box.
The growth of upcycling companies shows
how people are concerned by the
environment and how much the handcraft /
origin is important in their buying process.
Why it’s interesting: While Amazon and
Alibaba are struggling to propose quality
fashion products, it could be interesting to
invest in depth into the secondhand and re-
use market for clothing and interior design.
Especially when PrivCo estimates that the
secondhand clothing market is growing by
6% each year.
Leather leftovers redesigned by Hermes
for their subsidiary « Petit H »

10. G-Star, in association with
Pharell Williams created
« Raw for the oceans », a
project which collects
plastic from the ocean
and transforms it into
denim clothes.
Adidas decided to collaborate with the
associations « Parley for the oceans »
and « Sea Shepherd » to launch a
sneaker made with recycled fishnets.

11. Naturality Purpose
2015 was the year of Naturality products.
Consumers are becoming more and more skeptical
about mainstream brands and are focusing on
natural products. They are looking for the origin
and the information before buying a product.
Cosmetic and fooding markets in particular are
shifting their vision by focusing on naturalism. The
junk food sector is starting to adapt it’s business
model like Pepsico and it’s new naturally flavoured
line of sodas or The Marshmallowist and it’s
uncanny organic marshmallows.
Why it’s interesting: This is completely vital for the
e-commerce platforms to match their products with
consumers needs. For example Amazon is already
doing it on it’s food market. They must try to extend
the detailed origin and natural components for all
of their products range.

12. Naturality Purpose
Kure bazaar is a French
company specialized in nail
polish 100% natural in order to
protect customers from toxins.
Honoré des prés, is a company
which created fragrance
without any synthetic flavours,
colour agent or chemical
agent.

13. Cannabis Expansion
As you all know, Cannabis became legal in
certain states of America. The Cannabis
market exceeded 3 billion dollars and more
than 2 500 cannabis related companies
were created in 2015. More and more
companies are going to develop a business
model around it and soon, this product will
become a regular good of consumption.
Why it’s interesting: This is one of the new
emergent markets that e-commerce platforms
need to keep an eye on. Cannabis will be
shortly ,as I said a common consumption
good. The main question is how will the
legislation evolve with the market.

14. Cannabis Expansion
Oaksterdam University is a university
in Oakland,USA, where 25 000
students learn how to cultivate and
commercialize Marijuana.
Medicine Man, a company launched
in 2010 and specialized in the retail
of medical Cannabis, has now 80
employees and recorded a turnover
of 18 Billion dollars in 2015.

15. Canabis Expansion
In the next slide, you’ll see a promotional video for the Snoop
Dog’s company « Leaf by Snoop » which starts selling canabis
in the US. The branding and packaging are interesting when
you remember that this product was and still is forbidden in
most of countries in the world.

16. E-Commerce Trends
Service
Deliveries Innovation From On to Offline
New Shopping Experience New Shopping Devices

17. Deliveries Innovation
The main competitive asset that e-commerce companies
are searching to reach is the whole delivery service. As
Amazon and it’s premium offer which guarantees a 2-
days delivery, a lot of companies are innovating into the
delivery service.
“Nimber” is meeting sharing economy and delivery by
offering random people to carry parcels in the direction
they were initially heading to. Shutl offers the opportunity
to send and receive packages locally within 90 minutes
or to choose a convenient one hour time slot.
PhoneAddress which turns your mobile phone into your
« On the way » address. Deliveroo and Toktoktok set up
a business model where you can order and get your
products wherever you are in a city.
Why it’s interesting: Alibaba will need to upgrade it’s
delivery process if they want to be considered as a real
challenger of Amazon & Ebay as their actual minimum
delivery time is 5 days. We saw that more and more
actors are fixing the delivery process as a key strategic
asset with the Instant or « On-the go » delivery.

18. From On to Offline
As we thought online shopping would end
traditional brick & mortar retail, we saw that
customers are looking for in-person advices and
interactions. They need to make a personal
connection with the brands they are looking for
and this occurs with a physical encounter with
the products.
This is why e-commerce brands are adding
traditional retail experience in their business
models. They can now mix personalization,
flexibility and online customer reviews with in-store
customer service. Amazon with it’s first bookstore
in Seattle or Easyjet and it’s easyFood store
where all products are at 20 cent in London.
Why it’s interesting: Alibaba must think about
offline in it’s strategy as we saw the shifting in the
customer’s mindset. In 2016, the customers need
to have the possibility to switch between online &
offline when it comes to choose a brand. One of
the biggest stake is to reach customers in their
different micromoments and by adding a physical
retail experience the brand will be able to satisfy
this need.

19. From On to Offline
« The most sophisticated retailers are ensuring their marketing
strategies are geared toward enabling customers to convert on
any channel. Why? Because they realize that a shopper who
buys from them in-store and online is their most valuable kind of
customer. According to a 2015 study by IDC, these shoppers
have a 30% higher lifetime value than those who shop using only
one channel.”
Julie Krueger, Think with Google

20. New Shopping Experience
Personalization
There are several trends appearing in 2015 that show how
retail changed and how people are trying new shopping
experiences. The first one, in my mind is how important the
product personalization became in the purchase funnel.
People are looking for unicity, specific and personal
products or advice.
Many e-commerce platforms started to build a business
model around personalized services and products. Take
Stitch Fix for example, a subscription service that uses
artificial intelligence and human judgment to recommend
apparel to shoppers. GeneU offers skincare products
directly created according to your DNA (previously
collected) to optimize the effect. Stowaway sells cosmetics
in a smaller size to fit in your bag. This solution which
answers user-centered insights shows that customers are
looking for smart products adapted to their daily life.
Why it’s interesting: The research of personalized products &
services for the consumers are essential in order to create a
unique relationship and empathy with a brand. Alibaba
must look for specific services & products to enable this
connection with it’s customers.

21. New Shopping Experience
Personalization
« Across a variety of industries, recommendation has been identified as a key to
success—35 percent of Amazon sales, 50 percent of LinkedIn connections and 75
percent of Netflix views are driven by recommendations.”
Julie Bornstein – Stitch Fix COO

22. New Shopping Experience
New shopping devices
Another trend to keep in is the new ways of payment and order.
The internet of things and the evolution of social medias add
multiple sales points for customers. Social Networks are starting to
include mobile payment options in-app. Facebook for example will
propose specific products related to your interests and activity.
Pinterest and Twitter which inserted « buy buttons » like Buyable
Pins for Pinterest. WordPress just bought WooComerce, a plug-in for
e-commerce, it allows every Wordpress user to run a small e-
commerce page, like a mini Amazon.
The internet of things is changing our buying habits by connecting
our home and surrounding. Amazon’s dash button which allows
instant refill. A personal assistant shopper device was launched,
“Amazon Echo” which can order by listening to your voice.
Why it’s interesting: We need to anticipate how the future of e-
commerce will be. Internet of things will completely change the
traditional online order we used to know. Alibaba must invest in
R&D in this field to propose products/services that will match
customers needs & IoT technology.

23. Social Brands
Every major brand has invested in social actions,
having a social mission turns them from classical
brands into a more personal, human entity. Customers
show empathy to brands that are willing to help the
environment or the society. Even the start-ups, invest in
a social activity. Founders Pledge is a company which
helps entrepreneurs donate 2% of their personal
proceeds to a social cause of their choice.
A survey from JWT found that 88% of UK and US
millennials believe in companies which have social
actions. They feel closer to brands which do « more
good » not just « less bad ». Customers want to buy
and be associated to a brand which is important to
the society.
Why it’s interesting: If Alibaba wants to become a
major actor on the-commerce market in Europe and
US, it must start to develop parallel activities with a
social purpose. As we saw the rise of e-learning and
MOOC, it could be interesting for example to ally e-
commerce and online education for everyone.
« Every entrepreneur should be
able to help make a difference.
The Founders Pledge makes that
possible »
Andy McLouglin, co-founderof Hudle

24. Strategic proposition
• Aliexpress.com graphic redesign:
- Upfronting the users recommendations for each products as they
are a key decisional factors in the buying process
- Set a most appreciated products ranking on the homepage
- More visual and seamless website design. Simplify the homepage,
set a more understandable and clear user experience
- Highlight products which are matching with the different moments of
the day on the homepage. ( e.g: Morning / Coffee mug)

25. Aliexpress.fr Interface
As you can notice, the homepage is crowded with sections, images and tabs. It’s
clearly not easy for the customer to understand and navigate quickly with all the
information on the homepage.

26. Aliexpress redesign inspiration

27. Strategic proposition
• Reaching users at their most receptive micromoments:
- Duplicate the Alibaba’s universe in a physical way. Creation of the
“Alicofee” shop where you can buy special/unique products & have a
break
- Associate the brand to a chilling and caring atmosphere
- Define each customers interest and taste with a personal test in the
registration process to propose adapted and customized items and
to simplify the aftersale CRM campaigns

28. Micromoments Example
• Spotify Micromoments Matching

29. Results
- Become a more personal brand with a
better customer relationship (On/Offline)
and brand experience
- Rebrand Alibaba as a qualified and
trustful brand for their customers
- Online and Offline customer journey

30. Thank’s for reading !
E-Mail: Jeanbaptiste.bard@gmail.com
Linkedin: fr.linkedin.com/in/jbard
Phone: +33.6.51.92.30.25

31. Benchmark Materials
• Social Investor for Startups (Social Brands):
http://thefounderspledge.org/
• Botanic Lab London (Naturality Products):
http://botanic-lab.co.uk/
• Organic Nourishing Protein (Naturality Products):
http://www.welleco.com/products/the-super-elixir-nourishing-protein-500g
• City Containers for growing fruits (Naturality Products):
http://www.agricool.co/
• Natural fragrance and skin care brand:
http://haeckels.co.uk/about/
• Natural Yogurt flavours:
http://www.bluehillyogurt.com

32. Benchmark Materials
• Upcycling Companies (Re-Use products):
http://www.bionicyarn.com/about.html
http://rawfortheoceans.g-star.com/
http://lesailes.hermes.com/be/fr/petit-h-1
• Natural flavoured without high-fructose syrup (Naturality Products):
http://uk.businessinsider.com/pepsi-introduces-stubborn-soda-flavors-2015-6?r=US&IR=T
• Phone Adress (Delivery Innovations):
http://www.ddb.be/work/BASE/phone-address
http://insider-trends.com/8-companies-shaping-the-future-of-delivery/
• Future Trends (JWT)
https://www.jwtintelligence.com/trend-reports/the-future-100-2/