Alibaba vs. Tencent: The Battle for China’s M-Commerce Space

Alibaba vs. Tencent: The Battle for China’s M-Commerce Space
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Abstract
M-commerce refers to an established wireless framework such as tablets and phones to manage online transactions. For instance, they are used for sales and purchases and guide different business engagement processes. China's M-Commerce space is classified as the most developing and highly competitive due to phones' rapid growth and development. Besides, communication development is rapid and more opportunities are being opened to ensure successful business engagement. For instance, by 2018, China got ranked second worldwide due to its rapidly growing M-Commerce. There is constant competition in the Chinese market, especially the companies advocating for digital transformation and growth. The major sectors that show extreme competition in the Chinese market are the local markets and the foreign players. Besides, more resources are mobilized to enhance the domestic companies, with local companies also focusing on a better framework to meet the consumer demands. Alibaba and Tencent focus on developing strategies that expand the technological market; therefore, the entry strategy must align with the company goals. Before deciding on the appropriate strategy, it is also essential to consider the available resources. A company should consider a reliable approach that would allow it to adequately exploit any opportunity in the market. The suitable entry strategies for the two companies are franchising and joint venture. The strategy is based on the Chinese cultural dimension of collectivism. China majorly focuses on collectivism which advocates for group-way of thinking. A collectivist culture is significant in business development since it promotes business thinking and development. The collectivist thinking is also promoted by familial relationships that the Chinese embrace. Therefore, entry into the Chinese market requires adequate consideration of group behaviors and group-way of doing business to ensure business transformation and growth. Lastly, the collectivist nature of Chinese business players embraces business development and growth due to networking and digital growth. Therefore, entry into the market would lead to sustainable growth and development.
Table of Contents
1 Introduction……………………………………………………………………..………4
2 Company Overview…………………………………………………………..…………5
3.0 China’s Competitive Market ………………………………………………….………..6
4.0 Analysis of Entry Strategy and Possible Entry of Competitors…………………………9
5.0 Operational Environment………………………………………………………………..10
6.0 Local Profile……………………………………………………………………………..11
7.0 Organizational Chart…………………………………………………………………….11
8.0 Staffing Policy……………………………………………………………………………12
9.0 Leadership and Motivation……………………………………………………………….12
10.0 Communication Methodology………………………………………………………….13
11.0 Control Process…………………………………………………………………………13
12.0 Conclusion………………………………………………………………………………13
Introduction
Market entry and competition are key elements that every company long for. A company must focus on suitable strategies for gaining a better competitive advantage. Besides, there is a need to focus on a better strategy that can be used to define different elements of purchase-including online banking. Market entry requires proper planning and a framework to sustain available market challenges. The paper addresses a case study on Alibaba vs. Tencent and a reliable framework to enter the Chinese market space.
Overview
M-commerce
M-commerce refers to an established wireless framework such as tablets and phones to manage online transactions. For instance, they are used for sales and purchases and guide different business engagement processes. M-commerce is a critical component of electronic commerce and a large subset for business growth and development. It has become a reliable framework for business since more customers own mobile phones (Blaise et al., 2018). Therefore, it is easy to justify that the business transformation is becoming effective for most companies with accurate consideration of M-commerce. Today, different products are transacted using M-commerce, such as digital music, plane tickets, and banking. Besides, the increased transformation to digital commerce has created room for product differentiation and the emergence of different companies such as Alibaba and Tencent. Therefore, M-commerce is a critical opportunity for different companies.
China's M-Commerce Space
China's M-Commerce space is classified as the most developing and highly competitive due to phones' rapid growth and development. Besides, communication development is rapid and more opportunities are being opened to ensure successful business engagement. For instance, by 2018, China got ranked second worldwide due to its rapidly growing M-Commerce. China's M-commerce has also shifted due to specific internet players who heavily invest in the market. Alibaba is among the countries which began its business in 1999 and has heavily exhausted the Chinese market due to its digital strategy. Besides, Tencent is also among the companies which have successfully exploited the market through different acquisitions to ensure market success and development. For instance, since 2013, Tencent and Alibaba have used unique digital strategies to ensure successful business transformation and development. Therefore, China's M-Commerce is identified as one of the strategic platforms for business growth and development.
Current Market Competitiveness
There is constant competition in the Chinese market, especially the companies advocating for digital transformation and growth. According to Chhonker et al. (2018), the major sectors that show extreme competition in the Chinese market are the local and foreign players. Besides, more resources are mobilized to enhance the domestic companies, with local companies also focusing on a better framework to meet the consumer demands. The increased competition in the Chinese market is due to its strong economy. China has risen due to its strong economic growth, which resulted from company and internet expansion. Besides, some firms developed due to the impact of the western countries such as the United States. Therefore, the increased competition in the Chinese M-Commerce space is essential for successful growth and development.
Company Overview
Alibaba vs. Tencent
Alibaba is one of the largest Chinese companies specializing in technology, the internet, and e-commerce. It was established in 1999 and is known for constant consumer engagement and development. The company focuses on different business engagement styles, including business-to-business and consumer-to-consumer. Besides, Alibaba has acquired different companies to meet different consumer demands. The company has a strong economic bond with approximately $25 billion in revenue. Besides, Alibaba is also an artificial intelligence company and has ventured into different capital firms. It is also known for breaking the $500 valuation mark (Zhang et al., 2018). The major competitor of Alibaba is Tencent.
Tencent is also a technology company and majorly focuses on the entertainment industry. It is headquartered in Shenzen and heavily focuses on the video game industry. It was founded in 1998, one year before Alibaba, and has heavily focused on suitable strategies to outcompete different companies. It is the largest in the world in video vending and focuses on better frameworks for establishing technology growth and development. It is also known for surpassing the $500 million mark market value (Lin, 2018). Therefore, Tencent and Alibaba are known as the key companies which heavily exploit China's M-Commerce space.
China's Competitive Market
Analysis using Hofstede's Cultural Dimensions
Large vs. small power distance
The dimension is relevant and focuses on class divide or hierarchy. Chinese culture is essential and defined through a paternalistic mindset. There is a critical gap between the upper and lower class. Due to such a gap, competition is a critical aspect which affects. The hierarchical Chinese environment is critical since it creates a dynamic and competitive environment regardless of different cultural challenges. Besides, it creates a large power distance which must be adequately handled during the competitive framework.
Individualism vs. Collectivism
The dimension is essential since it determines how individuals are embraced in a specific culture. For instance, individualism makes individuals think in their direction, while collectivism focuses on a group way of thinking. China majorly focuses on collectivism which advocates for group thinking (Liu, 2015). A collectivist culture is significant in business development since it promotes business thinking and development. The collectivist thinking is also promoted by familial relationships that the Chinese embrace. Therefore, entry into the Chinese market requires adequate consideration of group behaviors and group-way of doing business to ensure business transformation and growth. Lastly, the collectivist nature of Chinese business players embraces business development and growth due to networking and digital growth.
Masculinity and Femininity
The dimension addresses how society embraces femininity or masculinity. China is a country that considers both femininity and masculinity since women have also dominated the market. For instance, the M-Commerce space heavily relies on males an...