Running head: ALIBABA VERSUS TENCENT

Alibaba versus Tencent

MBA 560 Global Management
Lucas Coro
Dr. Williams
September 22, 2016
Lincoln Memorial University

ALIBABA VERSUS TENCENT

Alibaba versus Tencent

1) Give a brief overview of Chinas m-commerce market and its major players.
The Chinas m-commerce has been growing fast, and it is ranked as the second biggest
m-commerce in the world. According to Switzerland Global Enterprise, The size and growth
rate of the e-Commerce market in China is unique. With more than 618 million Internet users,
China has more users online than the USA has inhabitants. The market is pretty much subdued
by two giant companies, Alibaba and Tencent, and they share the greatest Chinas market share.
A few years ago, the market had a shift in how it worked, the ecommerce sales shifted from
desktop to mobile devices. This type of sales has increased, and according to (Ecommerce.com,
2016), This year, eMarketer forecasts retail mcommerce sales in China will grow by 51.4%, to
reach 55.5% of retail ecommerce sales in the country this year. That will still amount to just
10.9% of total retail sales, however.
2) Discuss the competition between Alibaba and Tencent.
These two are far the biggest m-commerce companies in China, and they also have a
huge expression globally. They are wagging a fierce battle for the dominion of Chinas mcommerce market. Both companies were founded almost at the same time, Alibaba was founded
in 1999 and Tencent in 1998. Alibaba was the first to that the control of m-commerce in China
launching many platforms, but Tencent had also introduced variety of platforms, in order to face
its competitor. However, with the high growth rate of Chinas m-commerce, new ideas were
emerging into the market, and then Tencent launched a mobile payment platform. It was a
success, and in les than 15 days more than 200 million users had signed up for the service.
According to China Internet Network Information Centre, a Chinese government agency,
something has changed, and of the 618 million internet users in China, more than 500 million of
them access the internet via their mobile phone. That made a difference.
The competition has changed slight since then, and nowadays Tencent has kept its role of

ALIBABA VERSUS TENCENT

tough competitor through that action and also throughout expanding to a game market. Since
then, Alibaba is trying to attack Tencent, in order to protect its core business. The company has
been launching mobile game platforms and online videos to try to expand and to cope with the
competitor.
3) Discuss the opportunities and challenges for Alibaba and Tencent in Chinas m-commerce
market.
Chinas m-commerce market has experienced a power growth rate, and with that many
opportunities are coming and also challenges. According to (Ecovis Beijing, 2015), In 2013,
China became the largest e-commerce market worldwide in B2C and C2C purchases, overtaking
the USA. Therefore, both companies are facing a great e-commerce growth opportunities in
China. The mobile commerce, for example, will be responsible for 11% of all e-commerce in
China, a proportion that is on par with the U.S. market. Mobile transaction and payment is
another opportunity that both company can go deep, 69% of the Chinese consumers said they
had purchased a product by using this service. Another opportunities would be throughout
mobile advertising, smartphones, and mobile platforms.
Chinese are already responsible of 15% of global Apple app store downloads, so we can
expect that the App stores market would be a great opportunity for both companies jump in, and
try to have revenue from it. Most of the challenges evolve around of the fierce competition that
the companies are dueling. It can force one of both goes to another segmentation, or stay behind
when it comes for market share.

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Reference:
By 2019, the end of our forecast period, mobile users in China will spend nearly $1.5 trillion on
mobile commerce, which will amount to nearly a quarter of the countrys retail market.
(2016). Ecommerce Turns into Mcommerce in China - eMarketer. Retrieved September
21, 2016, from http://www.emarketer.com/Article/Ecommerce-Turns-McommerceChina/1013736
China e-commerce. (n.d.). Switzerland Global Enterprise. Retrieved September 21, 2016, from
http://www.s-ge.com/sites/default/files/censhare_files/s-ge-marktstudie-e-commercechina_3.pdf
Hoffmann, R. (2015). China's e-commerce market exploding: Opportunities and challenges for
foreign investors. Retrieved September 22, 2016, from http://www.ecovisbeijing.com/en/blog-en/articles/366-china-s-e-commerce-market-explodingopportunities-and-challenges-for-foreign-investors