PESTLE analysis of Alibaba. Alibaba Group is a China-based e-commerce platform, retail, and tech multinational brand. Jack Mao established the tech company on 28 June 1999. The headquarters of the tech company is in Yuhang District, Hangzhou, Zhejiang, China; George Town, Cayman Islands.
Alibaba’s main products and services are as follows;
- Ali Cloud
- AliExpress
- TV Shows
- Alibaba.com
- Alios
- Films
- Alipay
- AliGenie
- Mobile Media
- TaoBao
- Retail
- Tmall
- Lazada
- Entertainment
- 1688.com
- Cloud computing
- Daraz
Key statistical facts and figures about the Alibaba Group are as follows;
- The annual revenue of the Alibaba e-commerce platform was 131.368 billion dollars by the end of 2022
- The net income of the e-commerce platform and Tech Company was 2.455 billion dollars
- Approximately 245,941 employees are working for the company to manage its worldwide operations
Alibaba’s top competitors are as follows;
- ExportHub
- Made in China
- Global Sources
- TradeKey
- DHGate
- EC21
- Microsoft
- ThomasNet
- ECVV
- Wrap Up
- Amazon
Today, we’ll discuss the pestle analysis of Alibaba. It would analyze the external political, economical, social, technological, legal, and environmental factors of the world’s leading e-commerce platform. Here’s the pestle analysis of Alibaba as follows;
Political Factors Impacting Alibaba
Some of the key political factors in the pestle analysis of Alibaba are as follows;
Power Show Off
Alibaba has recently made a power showoff by listing its shares on the Hong Kong Stock Exchange China. Many other world’s leading companies also make a power showoff now and then through marketing and promotional campaigns. But Alibaba’s power showoff has raised many concerns and questions about the company’s first public offering. If the company is listing its shares on the stock exchange, then what was the initial list all about, and what purpose it served?
Communist Chinese Government
Alibaba is a Chinese company and has its first headquarter in China. The communist Chinese has a bad reputation in the global economic world, especially in the Western world. That’s why the stock price and share value of Alibaba are still falling behind Amazon; because the investors don’t trust the controlled economy and authoritarian regime. They fear that the Chinese government could seize the company’s operations at any time and take control of the company and its resources.
Company’s Leadership
Jack Mao is the founder and a great visionary leader of the company, and his stepping away from the leadership of the company would shock many people. It would jeopardize their trust and confidence in the company both in the short term and long term.
Government Support
Alibaba has always enjoyed and taken advantage of government support; it helped the company expand its operations and achieve success in terms of reaching the company’s goals and objectives.
Economical Factors Impacting Alibaba
Some of the main economical factors in the pestle analysis of Alibaba are as follows;
Financial Growth
If we look at the financial and statistical records, Alibaba has made tremendous growth and progress recently. The annual revenue and total assets of the company have increased, and the slight drop in the company’s net income and operating income. It shows that the company is restoring the trust and confidence of people and users.
Market Saturation
The e-commerce market has become saturated with a lot of small niche-focused competitors. They attracted a significant portion of the customer market share. In recent years, it has become difficult for the company to attract new customers; even though the e-commerce platform is investing a lot of resources in marketing and promotion of its platform.
Growing Rural Market
The rural sector has got a huge growth potential and it helped the company to attract 70% of its customers from the rural market. Alibaba could increase its market share if it focuses on rural areas.
Social Factors Affecting Alibaba
Some of the main social factors in the pestle analysis of Alibaba are as follows;
Mobile Social Media App
Taobao is the mobile app of Alibaba and a commercial platform, and it allows its users to buy products listed in the application. The interesting thing about this application is that it offers social media-like features, and that’s why it has got a high user engagement and customers spend more time on the platform.
According to an estimate, Taobao’s users visit the platform or mobile application roundabout 7 times a day. The platform offers people a live session experience, where they could come and share their experience with the product.
Technological Factors Impacting Alibaba
Some of the main technological factors in the pestle analysis of Alibaba are as follows;
High Tech Adoption
One of the key reasons behind the success and growth of Alibaba’s platform is the adoption and embracing of the latest technology like Machine learning, Cloud computing, AI, and others. It has allowed the company to generate reports, track the delivery of the products, and update the status on the platform.
iCloud Logistic
Alibaba is also investing a significant portion of its resources in the development of Cainiao, a logistic platform for managing the company’s stock. It is a cloud-based platform and it follows the RMS (remote monitoring system).
AI Chatbot
In order to facilitate communication between buyers and sellers, Alibaba has launched AI chatbots that automatically translate the language relevant to the needs and requirements of the customers.
Legal Factors Affecting Alibaba
Some of the key legal factors in the pestle analysis of Alibaba are as follows;
Counterfeit
Alibaba has earned a bad reputation for counterfeiting many American brands. For instance, a fake wardrobe from Gucci is available on Alibaba’s e-commerce platform. In order to deal with the issue, the company has introduced new intellectual property rights. If the e-commerce platform plans to operate its business in various countries across the world, then it should take strict action.
Environmental Factors Impacting Alibaba
Some of the main environmental factors in the pestle analysis of Alibaba are as follows;
Sustainability Issues
Alibaba is a giant tech company, and it is facing criticism for increasing the carbon emission level into the atmosphere. The company has a responsibility to the environment and is focused on employing renewable sources of energy and setting an example.
Corporate Social Responsibility
Alibaba is claiming to be a socially responsible organization and it is now following the CSR steps;
- Sustainability of the environment
- Poverty alleviation
- Rural development
- Creating job opportunities
- Health insurance in some areas
Conclusion: Alibaba PESTLE Analysis Example Company
After an in-depth study of the pestle analysis of Alibaba; we have realized that Alibaba is the world’s leading tech giant company. If you are learning about the external factors impacting the company, then you should keep in mind the abovementioned external political, economical, social, technological, legal, and environmental factors impacting the company.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
