PEST of Alibaba


A PEST analysis helps you to know how those factors will
affect the performance of the company in the long-term. It was created by Harvard
professor in 1967 to determine a company’s overall performance.

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This PEST analysis provides a great detail about the
challenges Alibaba will face and each explain each one of the four names.


Political: These factors determine to what extent the
government has an influence on the economy or an industry. Political factors play
an important in the factors that can affect the company long term profit in certain
markets or countries. Alibaba operates as a specialty retail, in some countries
it exposes itself to different political environmental and political risks


In more than 200 countries.

Political stability and importance of specialty retain

Trade regulations & tariffs related to services (Brexit tariffs)

Anti-trust laws related to specialty retail

Pricing regulations

Taxation- tax rates and incentives

Wage legislation – to comply with minimum wage and overtime

Mandatory employee benefits

Industrial safety regulations

Product labelling in speciality retail

E-commerce development plans


Economic: factors such inflation rate, saving rate, interest
rate can be taken into account. Alibaba can use the country’s economic factors
such as growth rate, inflation and industry economic indicators.


Brexit –UK market very important

Exchange rates and stability of the country currency

The efficiency of the financial market

Infrastructure standard quality in speciality retail

Level of skill in the workforce in speciality retail

The education level in the economy

The cost of labour and productivity in the economy

Business cycle stages such as prosperity, recession or

Economic growth rate

Unemployment rate

Inflation rate

Interest rates

GDP per capital


Social factors: shared beliefs and attitudes of the
population have an important role in how marketers at Alibaba will understand the
customers of a market.


Demographics and the skill level of the population

Internet access and knowledge

The class structure, power structure in the society

The education level as well as education standard in the
Alibaba industry

Culture (Gender roles, social conventions)

Attitudes towards health and safety, environmental and consciousness

Leisure interests

Trust in the business

Latest trends and fashion


Technological factors: Technology is important as every
company relies on technology analysis as well efficiency of the technology.


Recent technological development by competitors

The technology impact on product offering

The impact on cost structure in speciality retail

The impact on value chain structure

The rate of technological diffusion

Security of the products

Credit card safety

Rapid development of high speed network service

Third party payment system such as PayPal



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