Alibaba Vs. Tencent: The Battle for China’s M
–
Commerce Space
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Author: Dr. Suchitra Mohanty
Alibaba Vs. Tencent: The Battle for China’s M-Commerce Space
Teaching Note
Prerequisite Conceptual Understanding
Synopsis of the case study
The case study, set in 2014, can be used for Post Graduate Business Management courses to teach
Strategy and General Management. Tencent and Alibaba were the two most successful internet
players in China. Tencent was introduced by Huateng Ma in 1998 and Alibaba was founded by Jack
Ma in 1999. Since October 2013, both Alibaba and Tencent had been involved in aggressive
Teaching Objectives
The case study helps to understand and analyse:
M-Commerce market in China
Digital rivalry between Alibaba and Tencent
Strategies adopted by Alibaba and Tencent to rule China’s m-Commerce market.
Teaching Plan
The Teaching Note follows a sequential order as presented in the Suggested Teaching Plan
[Annexure (TN) – I].
Case Analysis
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Alibaba Vs. Tencent: The Battle for China’s M
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Overview”, of the case study]. Give a brief overview of China’s m-Commerce market and
discuss about the major players.
I started the discussion by asking the class to give a brief overview of China’s m-Commerce
market and its major players. The students answered the question in the following way:
Mobile E-Commerce or m-Commerce was growing fast in China.
The size of the m-commerce market in China was estimated as $78,380 million in 2014. [Para
1 of the Section: “M-Commerce in China: An Overview”, of the case study].
By 2018, China was anticipated to be the second biggest m-Commerce market in the world
Alibaba Vs. Tencent: The War of the Giants
2 “However, Tencent, one of the biggest rivals for Alibaba was an early entrant to the
e-Commerce space.” [Para 3 of the Section: “Alibaba Vs. Tencent: The Digital War”, of the case
study]. Discuss the competition between Alibaba and Tencent.
The discussion continued by asking the above question to the students, and the students
answered the question in the following manner:
Tencent, one of the most successful internet players in the country was introduced by
Huateng Ma in 1998 and Alibaba, the key player in Chinese E-Commerce market was founded
by Jack Ma in 1999. [Para 1 of the Section: “Alibaba Vs. Tencent: The Digital War”, of the
case study].
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Alibaba Vs. Tencent: The Battle for China’s M
–
Commerce Space
Exhibit (TN) – I
Glimpse of Digital War: Alibaba Vs. Tencent
Alibaba
Tencent
Acquired 18% stake in Sina
Weibo for
a
strategic collaboration of E-commerce and
social media
–
Commerce
segment Tencent had acquired 15% stake in
the E-commerce site JD.com for $586 million
Acquired Digital Mapping firm AutoNavi
for
$1.6bn
Acquired
the Chinese Mapping service
provider Linktech Navi for $9.9m with an aim
Source: Compiled by the author from various sources
The competition between the internet giants Tencent and Alibaba for capturing the China’s
emerging mobile payment market became more intense with the cab-calling services i.e. with
the cab-calling smartphone apps Didi Dache (Didi) supported by Tencent, and Kuaidi Dache
(Kuaidi) of Alibaba. [Para 6 of the Section: “Will the Rivalry Revive the Industry?”, of the case
study].
This section helped the students to get a brief picture of the strategic competition between
Alibaba and Tencent in the online market space in China.
Opportunities and Challenges
3 Discuss the opportunities and Challenges for Alibaba and Tencent in China’s m-Commerce
market.
Opportunities
Battle between Alibaba and Tencent might have a significant impact on China’s m-Commerce
market. [Para 9 of the Section: “Will the Rivalry Revive the Industry?”, of the case study].
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Alibaba Vs. Tencent: The Battle for China’s M
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Commerce Space
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Challenges
m-Commerce was in nascent stage in China and around two thirds of the market were not
developed. [Para 10 of the Section: “Will the Rivalry Revive the Industry?”, of the case
study].
Final Thoughts
In China, high end phone users were outpacing the desktop users. This further provided remarkable
opportunity for the growth of m-Commerce market in the country. The internet giants Alibaba and
Tencent were also busy in delineating aggressive business strategies to grab the major share of the
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Alibaba Vs. Tencent: The Battle for China’s M
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Commerce Space
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Annexure (TN) – I
Suggested Teaching Plan
Prerequisite Conceptual Understanding
The Big Picture
A Strategic Battle for M-Commerce Supremacy
Detailed Teaching Plan Flow
Section – I
An Insight in to China’s M-Commerce
Ideal Duration
25 Minutes
Description
M-commerce market scenario in China
The genesis behind the battle between Alibaba and Tencent
Section – II
Alibaba vs. Tencent: The War of the Giants
Ideal Duration
30 Minutes
Description
Battle between Alibaba vs. Tencent
Strategies in the Chinese M-commerce market
Section – III
Opportunities and Challenges
Ideal Duration
20 Minutes
Description
Opportunities and challenges
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