Nyamweya is a Kenyan scholar who has done many years of research on a diversity of topics
Chapter 1 Introduction
1.1 Background of the Research
Available evidence indicates that a positive brand image has a capability of enhancing not only customer satisfaction but also customer experience for a long-term commitment (Inamullah, 2012). Furthermore, there has been a growing recognition of the significance of brand image to the success of an organisation and market offering Ballester & Aleman, 2011). Interestingly, there have been limited studies regarding the effect of brand image on key organisational and marketing components including how a brand image impacts on customer commitment and loyalty (Zhang, 2015).
Brand image relates to how a customer perceives a given product and or service or company in general (Wan, and Schell, 2013). However, brand image alone can be considered as a guarantee or benchmark for providing satisfaction to a customer. Instead, it has been acknowledged that customer satisfaction is the most influential tool that can be used by a company marketing department since it builds the image of a firm which is then perceived by customers (Schultz, and Block, 2015). If the customer is satisfied with the products offered by a company, then this will particularly help the brand in generating a positive brand image. Additionally, it is also believed that customers who are satisfied have a more likelihood of displaying loyalty behavior that is willingness to rate the company positively as well as repeat purchases (Starčević, 2015).
These constraints; brand image, and loyalty intention, are perceived to be very influential instruments in the field of marketing (Inamullah, 2012). Furthermore, these factors have been employed as a marketing benchmark for effective company performance and outcome. In other words, they determine the outcome and performance of a company (Wan, and Schell, 2013). This research is thus designed to assess how a brand image can influence the commitment and loyalty of customers to market offering using Alipay as the case study. This is achieved through collecting secondary data from various online and physical sources pertaining how Alipay has managed its marketing and business endeavors.
1.2 Background Information of Alipay
Alipay is a third-party online and mobile payment platform established in 2004 in Hangzhou, China. It was created by Jack Ma, also the founder of Alibaba Group. Since its inception, Alipay’s performance have been increasing on a constant basis and in 2013, it overtook PayPal as the largest mobile payment platform in the world (Heggestuen, 2014). Towards the end of 2017 financial year, Alipay had a 56% share in China's US$5.5 trillion mobile payment market. By far, China is the largest mobile payment market in the world. Tencent's WeChat Pay has been one of the fiercest rivals of Alipay in China.
Alipay operates in over 65 financial institutions including MasterCard and Visa in providing payment services for Tmall and Taobao alongside other 460,000 online businesses most of which are based in China. Alipay is also used in smartphones with their Alipay Wallet app. This app contains features such as payment, card bills, account management, insurance selection, train or bus ticket purchase, and document, management of bank account, prepay mobile phone, ride hailing, and mobile phone top up. Alipay also makes it possible to conduct online check-out on various Chinese based websites including Tmall and Taobao (Usman, 2014).
1.3 Significance of the Study
Many studies have been undertaken in light of organisation’s branding strategy alongside its impact on the satisfaction of customers. For instance, Kapferer, (2011) undertook studies on the correlation between customer loyalty and satisfaction across industries and established that brand image poses a crucial impact on customer satisfaction. Major sectors where this impact was notorious include e-banking, supermarket industries, service industries, mobile phone, landline and even banks. On their part, Wan & Schell, (2013) identified the relationship between customer satisfaction, brand image, and customer loyalty and went on to note that store infrastructure, store service, convenience and sales activities as being quite critical in building store image. Furthermore, the impact of these four components on customer satisfaction was enormous.
Despite a good number of studies that have been tailored towards the impact of brand image on customer satisfaction, no similar studies have been replicated in the context of Alipay. In this regard, there need to be studies assessing the consciousness of brands on this subject, and how their branding strategy affects customers. Findings will be beneficial to the brand itself since they will be able to understand weather their marketing strategy is working or not. Similarly, researchers will find the evidence ideal for their studies especially those geared towards the same subject. Moreover, other brands benefit from the findings in improving their business strategies.
1.4 Research Aim and Objectives
The aim of this study is to identify the impact of brand image on customers using the case of Alipay. Specific objectives are as follows:
(1) How does the Alipay implement its branding strategy;
(2) How does Alipay’s branding strategy impact on customers;
(3) How does Alipay’s branding strategy contribute to its globalsation
1.5 Research structure
This research is organised into six chapters including the current chapter 1. The chapter 2 is the literature review section exploring existing work related to this research. Chapter 3 is the methodology chapter which discusses and justify the research methods used. Chapter 4 is about presenting findings and analysis of the data collected during the dissertation. Chapter 5 is about conclusions and recommendations, and finally the chapter 6 is about reflections on the overall research process.
Chapter 2: Literature Review
The purpose of this chapter is to review previous literature pertaining to the impact of brand image on customers. The first part is the introduction of the chapter outlining its intent followed by the literature review from the perspectives of the objectives of the actual research. For example, the author will discuss what a branding is and the various types of branding strategies existing today. This will be followed by the impact of a firm’s branding strategy on customers. There would also be a discussion of how branding strategy contribute to globalization. The final part is the summary of the literature review.
2.2 Branding Strategy
By definition, brand strategy is regarded as a long-term plan for establishing a successful brand that is also able to meet its stated objectives (Starcevic, 2015). A well implemented brand strategy affects all areas of a business and is directly related to the emotions, needs of customers as well as the competitive environment. On his part Ballester, and Aleman (2011) explains a brand strategy as essentially a plan which encompasses specific short-and long-term goals which can be realized with the development of a successful brand. It largely consists of the combined components of the company’s character that identifies it. On the other hand, Schultz and Block (2015), state that a branding strategy consists of action plan employed by firms and businesses in differentiating their services or products as well as their identities from their rivals. Although all these definitions are relevant to this study, this research will particularly rely on the definition by Schultz and Block (2015) and Starcevic, (2015) as they are more relevant in achieving the research objectives.
2.3 Existing Brand Approaches
In their desire to gain success in the market, companies use a myriad of brand approaches (Tu et al., 2012). Furthermore, in the current day perspective, companies may opt to adopt several branding models in their business strategy. The branding approaches are essentially different models that can be explored by companies in their brand management (Zhang, 2015). It needs to be considered that there is no single model which can be considered as the right approach. Nonetheless, the approaches presented point to a clear trend which is a shift away from the conventional one approach of sending communication to a strong emphasis on cultural and contextual influences of a brand. The seven key branding strategies that are commonly employed by firms include the following:
2.3.1 The economic Approach
This model incorporates the parameters of the traditional mix 4 Ps (product, price, promotion, and place) which are essential in creating a brand strategy. It is the functional, basic and marketing type where firms are setting a competitive advantage through using price (Kotler, 2012). In this light, customers are increasingly choosing products they need by price. Economic and social points of view are regularly balancing (Shimizu, 2016). Unlike other approaches, this strategy integrates different marketing concepts into one while also simplifying them into one. This subsequently makes marketing easier to manage. However, being an internally oriented concept, client behavior is ignored (Kotler, 2012).
2.3.2 The Identity Approach
The key tenet of this model is the linking of the brand to corporate identity. In other words, it relates to creating a desired self-image or identity which leads customers to their stores (Matanda, and Ewing, 2012). As the main value creators, company could opt to utilise for instance, storytelling approaches in marketing. Furthermore, the audience determines or rather influences the decisions that are made by the company. Moreover, some people have the capability of affecting similar type of people that is positive reference (Shimizu, 2016). This approach is able to create loyal customers. It is also an effective means of creating perception and emotion around the company’s products or service. On the downside, brand identity approach is costly, and huge efforts and resources may not always lead to positive return on investments (Matanda, and Ewing, 2012).
2.3.3 The consumer-based approach
This approach entails assessing what the customers want. The company observes the behavior and action of customers so that they are able to offer products and environment that best meets their various needs (Zhang, 2015). Companies learn about different types of customers for the purpose of providing the right form of services to the targeted customer segment. The observation can be done through surveys, experiments, interviews among other means (Inamullah, 2012). The approach is essentially a good way enhancing consumer loyalty. However, similar to the identity approach, gathering information and responses from customers is not only it time consuming but also a costly endeavor.
2.3.4 The personality approach
This approach considers a brand as having a human-like character. The key ideology of this model is rested on the tenet that consumers harbor a tendency of endowing brands/companies with human-like characters. The approach emphasizes on the symbol-consuming consumer and the ‘human-brand perspective which are on the spotlight in this approach. Customers bestow companies with personalities and employ these personalities in a relationship-based exchange of symbolic value for their personal expression and identity construction. The key emphasis of a personality approach is the association to relational approach (Kumar, and Prasad, 2012). This system needs personnel who are experts in brand image and customer management. The approach also helps marketers understand the behavior and attitude of their customers and adjust their products/services in line with their needs. However, in obtaining valid outcome, personality surveys and observations are often conducted without the knowledge of the customers. These may raise ethical issues.
2.3.5 The relational approach
In this approach, the brand is considered as a valuable relationship partner. In this regard, the logic of the dyadic relationship between the consumer and the brand has significantly altered the academic sphere of brand management. This approach is basically an extension of the dialogue-based approach of brand management sphere-headed by the personality approach (Vargo, and Lusch, 2004). With proper collaboration, those mandated to interact with customers are empowered to employ organisation resources in answering client queries, solving problems, and more importantly, provide a positive buying experience for consumers. Nonetheless, this approach is equally expensive compared to other forms due to higher degree of personalisation, and the need to communicate/interact with a single customer.
2.3.6 The community approach
This approach considers the brand as a critical point in social interaction. According to these models, brand value is created in communities where a specific brand serves as a fundamental point of social interaction among consumers. In essence, the approach adds a comprehension of the social aspect of consumption to the general image of brand management. In this approach, the marketer focuses on satisfying the ‘autonomous’ groups of customers who at the same time harbor the ability of collectively influencing marketing actions as well as the direction in which a brand is taking in respect to marketing (Shimizu, 2016). Some of the world’s strongest brands were originally built through community marketing. They include Google, Nike, Starbucks among others. Therefore, community marketing has proved to be effective. However, unethical forms of communication and blatant advertisement can cause skepticism among consumers. These can affect the general success of a sponsored forms of community marketing.
2.3.7 The cultural approach
Here, the brand is regarded as an extension of the cultural fabric. It is similar to the community approach in the sense that it focuses on the satisfying the needs of consumers. The approach essentially stipulates the role of branding to macro-level culture alongside how embedding the brand in cultural context could be strategically used in building an iconic brand (Shimizu, 2016). This approach enables the identification of customer needs as well as development of products which are customer oriented. However, negative publicity of the firm may destroy the trust of customers towards the brand.
2.4 Impact of branding strategy on customers
Inamullah (2012) articulates that consumer behavior is largely influenced by the branding strategies employed by a firm. Whether a brand is able to retain its customers is largely determined by the methods it uses in reaching out to its audience. Inamullah (2012) continues to explain that the success of a service, product, business or individual or even an organisation in the market is largely based on being perceived by customers as unique in the market. In this regard, successful companies have effectively differentiated themselves from their rivals through deploying specific branding strategies outlined above which have subsequently enabled them to establish personal niche in the consumer’s psyche and make them own it. On his part Kumar, and Prasad (2012), explains that in this dynamic world where the behavior and preferences of customers in making decisions pertaining to which services or products to use has necessitated marketers to establish and retain their brands in a manner that makes it appealing to customers.
Branding strategy is quite critical in the business environment due to the fact that it is involved in communication important information regarding the product. Branding is also involved in differentiating products and making them unique from those of rivals (Kumar & Prasad, 2012). Furthermore, branding is also essential in the service industry such as banking and finance where majority of products are almost similar and hence; making it confusing to customers who may be unable to grasp the difference between them. Kumar & Prasad (2012) points out that even in the face of homogeneity, successful brands are those which harbor the capability of tapping into the basic human aspirations and needs. He continues to postulate that a great brand needs to improve the quality of life for their customers to some extent. This aspect is important in differentiating the diversity of homogenous products existing in the banking industry today. Therefore, effective branding strategies make it possible for a company to differentiate its products from the face of its rivals. Consequently, customers will be able to identify products from a particular company against those of its competitors (Zhang, 2015).
Inamullah (2012) observes that in successfully winning the mind and psychology of a customer, brands must strive to create a positive image. This image is critical since it makes it possible for the customer to think of it anytime he or she is need of the services or products offered by it. Therefore, the key to getting and retaining clients for the purpose of maintaining long term competitive edge and profitability lies in establishing and maintaining a positive brand image on the minds of the target audience (Kumar, and Prasad, 2012).
2.5 Impact of globalisation on branding strategies
Globalisation is on the ongoing process by which cultures, societies and economies become integrated through a worldwide spanning network of trade and communications (Matanda, and Ewing, 2012). The term globalisation is also used in reference to integration of national economies through foreign direct investment, trade, migration, capital flows and spread of technology. Nonetheless, globalisation is increasingly being driven by combination of various factors including technological, economic, biological, political, and social-cultural (Matanda, and Ewing, 2012).
“The globalistion era” is now the preferred term for describing the modern times. Just like the terms the Space Age, the Cold War Era, and the Great Depression are employed in describing specific periods of history, globalisation is increasingly used in describing today’s cultural, economic, political and political environment (Tu et al, 2012).
Globalisation has driven people to modify their ways of living while also prompting organisations to change their way of doing businesses (Matanda, and TEwing, 2012). For instance, businesses are now increasingly required to find and outsource customers in various parts of the world other than their home countries. Similarly, the globalisation of operations and products has benefited firms through the realization of the economies of scope and scales (Tu et al, 2012).
In the context of globalisation, firm collaboration has now become an important aspect of business strategy in better achieving sustainable competitive edge and more importantly customer satisfaction (Tu et al, 2012). Therefore, it is not surprising then that in recent years, business alliances have increased to a significant level. In the modern perspective, it is not easy for firms to remain competitive without partnering with others. Furthermore, in achieving a superp marketing experience in the current business context, firms have been required to redefine their relationship with customers, partners, suppliers as well as the different parties in the value chain (Torres et al, 2012). Consequently, the trend towards more cooperation among entities have been rising both horizontally and vertically. Specifically, inter-firm cooperation has been lauded as being critical for business organisations to effectively compete in the market (Torres et al, 2012).
It is also apparent the proliferation of globalisation and technology have necessitated firms to employ new media in their marketing and customer relationship endeavors. Many businesses are increasingly using mobile marketing and new media in reaching and interacting with consumers (Matanda, and TEwing, 2012). Schultz and Block (2015) believe on the efficiency of new and digital media in developing customer interactions with a firm. For instance, Unilever created an online contest for ladies which was a 30 second dove advertisement through online. This online video aired during the 2007 Oscar broadcast generated internet and industry buzz. This also made the brand to be quite popular among its clientele.
2.6 How companies Implement Brand Strategies
The way software and technologies companies are marketing themselves is evolving due to globalisation and technology development (Zhang, 2015). Furthermore, in the face of heightened competition for attention on digital channels, technology and online payment companies in the B2B sector are struggling to reach the correct decision makers on the right channels for the purpose of increasing their sales funnel. The ability of connecting with such decision makers concerning critical issues, challenge or goal to their businesses can have a significant impact on the success of such enterprises.
In maximising their investment in marketing endeavors, many organisations have opted for tools and strategies which harbor the most potential in engaging decision makers by proving that they comprehend the challenges faced in their industry and employing strategies which offer substantial ROI (Matanda, & Ewing, 2012). Through relationship approach, identity approach, and personality approach for instance, companies are deploying different tools to increase their visibility and customer re employing different tools such as use of video content, creating animated Infographics, creation of animated explainers and creating a presence in the mainstream social media platforms (Zhang, 2015). These techniques have quite been effective since by creating a seamless interaction with customers, brands are able to add social value to the community, cultural approach by satisfying the needs of the client and the consumer-based approach by showcasing to the consumer what they want. Furthermore, the approach used by these companies satisfies the economic and identity approach whereby; the aim is linking consumers with their brand/products.
Paypal customer testimonial video for instance, hits the nail on the head considering that it is targeted towards the businesses retail prospects while it also has a brand which is well known in the mobile payment industry. It is also lauded as secure, flexible, quick and easy (Paypal, 2018) On the other hand, Skrill which is part of Paysafe Group has positioned itself as a secure, safe and faster platform for withdrawing and depositing money online. Much like its companions, Neteller, Ukash, Payolution, and PaySafeCard, skrill was established to make it possible to transfer money online, send money to people or companies in various parts of the world or conduct shopping. Over the years, the company has been known among its clientele as a secure, fast and safe money transfer money while also doing it affordably and efficiently (PokerListings, 2018). Accordingly, it has been able to live up with the economic branding approach, community approach, identity approach, cultural approach, and the consumer based approach.
For Chinese customers, Wechat and Alipay have proved to be the most relevant brands when it comes to online payments. According to Wohl, Neff, and Schultz (2016), Alipay which is ubiquitous in China can be compared to Paypal or Apple pay. The online payment platform is used for shopping online, in restaurants, in stores and in merchants that target Chinese travelers. The company has branded itself as an online payment agency which is conscious of convenience, speed, ease of use and affordability. However, Alipay has differentiated itself as an online payment platform whose products and services are focused on mainly Chinese consumers (Marketing China, 2017). Through the use of this approach, customers may hence find it easier to differentiate it from the rest.
This literature review has revisited the subject of branding strategy and its implication in marketing. The seven brand approaches that are the economic approach, the identity approach, the consumer-based approach, the relationship approach, the personal approach, the community approach and lastly the cultural approach. From this literature review, it is clear that the branding strategies greatly influence the customer behavior. In other words, the strategy determines the kind of image the firm will attract from its existing and potential customers, that is weather positive or negative. Business organisations including online and mobile payment platforms are able to differentiate themselves among competitors by employing strategies that make them and their products unique. For instance, among mobile and online payment firms, branding strategies has been able to label them as safe, convenient, cheaper, faster, trustful, and confidential among attributes. Nonetheless, globalisation and technology development have necessitated that businesses devise ways of reaching global consumers and outdoing their rivals. This is because companies that fail to appreciate and acknowledge globalisation and technology improvements and their implications in the business world will be dwarfed by their competitors. Interestingly, there are limited studies regarding the effect of brand image on key organisational and marketing components including how a brand image influences customer commitment and loyalty. This research thus employs the case of Alipay to assess how a brand image can influence the commitment and loyalty of customers in the market.
Chapter 3 Methodology
The focus of this chapter is to outline the methodology that should be adopted in carrying out the research. Accordingly, the researcher has described the research design for the proposed study, the sampling criteria, target population, data collection and analysis.
3.2 Research Design
In this study, the author will employ a case study research design to conduct the study. Creswell and Creswell (2018) explain a case study research as an in-depth research of a specific research subject instead of a comprehensive comparative inquiry or statistical survey. This type of research is mostly employed in narrowing down a wide field of research into one or few easily researchable examples. The design is also much useful when not much is known concerning particular phenomena. The design is also relevant in replicating an already done study in a specific region. This research design was specifically chosen for this study considering that many studies have been conducted in the similar topic. However, we need to establish how a particular brand image of in this case Alipay influence customer’s behavior.
3.3 Data Collection
Data collection for this study will be mainly done through secondary research. Secondary data is the type of information which is already available and consolidated in different sources. This form of data is easily acquired when compared to primary data which in most cases is costly to obtain. Secondary data will give the researcher essential insights concerning the subject under investigation as it will offer background information that is needed. Secondary data will be retrieved from mainly journals, company and organisational websites and newspapers. The researcher will ensure reliability and validity throughout the study.
3.4 Data Analysis
Analysis of the secondary data will be done using content analysis. This will entail carefully and closely weeding through the information and data to establish how the information answers the research objectives. This analysis will then help the researcher in drawing conclusions based on the findings.
The current study adopts the case study as a research design. This design was deemed to be relevant since it allows replication of existing studies in a special context. In choosing this option, a consideration was made that the subject has already been covered elsewhere and hence a case needed to be chosen. Furthermore, this research relied on secondary data in cognition of the fact that it is less costly. Most importantly, there is ready information from various online and physical sources pertaining how Alipay has managed its marketing and business endeavors.
Chapter 4 Findings and analysis
This chapter presents the findings as obtained from the secondary sources. These include the company’s websites, other organisations, and authors who have made analysis of the company. The objectives of this study were: (a) to establish how Alipay implements its branding strategy, (b) to find out the impact of Alipay’s branding strategy on customer and lastly (c) to determine how globalisation has contributed to Alipays branding strategy. It is believed that the information obtained from various data sources will help in addressing the stated objectives.
4.2 Alipay’s Branding Strategy
According to Wohl, Neff, and Schultz (2016), Alipay which is ubiquitous in China can be compared to Paypal or Apple pay. The online payment platform is used for shopping online, in restaurants, in stores and in merchants that target Chinese travelers. The company has branded itself as an online payment agency which is conscious of convenience, speed, ease of use and affordability. However, Alipay has differentiated itself as an online payment platform whose products and services are focused on mainly Chinese consumers (Marketing China, 2017).
Concerning its expansion approach, Alipay has made headlines recently due to its different approach from what the competitors including Paypal and Apple are employing. Compared to Apple Pay and Paypal, Alipay does not push its brand into new regions. Rather, it seeks partnership with already popular firms (GlobalData, 2018).
For instance, the firm has gone on a spree in sealing various partnerships which helped in international expansion (China Mobile, 2018). These include purchase of MoneyGram to create a presence in the US. Ant Financial has sealed a number of partnerships in recent months, including a bid to purchase MoneyGram in the US, investment in India through Paytm, a leading player in India’s mobile payment market, as well as the technical collaboration with Kakao Pay, a Korean technology and mobile payment company. Alipay has also ventured into Philippines by partnering with a well-known firm in the market, Mynt (GlobalData Plc, 2018). Furthermore, the firm has also collaborated with Ascent Money, a Thailand based mobile payment firm which is a leading market player in Southeast Asia. This is also the same case with BlackBerry Messenger which is the most popular messenger app in Indonesia (China Mobile, 2018). The purpose was to use the company in developing and integrating e-commerce and mobile payments into the platform. From these collaborations, it is apparent that Alipay partners with company’s which are already successful in the market, are well known, and have good image. Furthermore, the firm well understands that it does not have the global brand recognition enjoyed by Apple and Paypal (GlobalData Plc, 2018). According to GlobalData Plc (2018), the partnership and investment in already successful firms by Alipay is owed to the understanding that the local or host participants in the digital economy have a better understanding of the market. What is more, the synergy effects between Alipay and such firms would facilitate sharing the consumption scenarios, data users, and the technologies (Lee, 2018). The following deals were completed in 2017 alone;
Figure 4-1. The investment and partnership deals of Alipay. Source GlobalData Plc (2018)
Unlike other service providers, Alipay does not charge any transaction fee. It has also incorporated an escrow service which makes it possible for consumers to register their satisfaction or lack of it with the services they have received before making payment (China Mobile, 2018). Contrastingly, PayPal, the US based payment service provider does not have in place escrow services. Similarly, although the Korean based Samsung Pay has access payment points which are quite flexible to its users, it does not have other services. Therefore, when compared to other third-party online payment services, Alipay offers varied, yet integrated services for its multi-channel customers (Alipay, 2016). Figure 1 below illustrates some of Alipay’s varied services
Figure 4-2. Alipay services. Source: Alipay (2018)
As indicated in the figure above, Alipay offers a variety of services in its platform. Apart from the regular financial and banking transactions, there are investment services, life services and the popular escrow payment services.
4.3 How Alipay implements its branding strategy
While implementing its brand strategy, Alipay consistently advocates for a culture of active, reliable and fast transaction culture while insisting on integrity and credibility principle. The firm has always endeavored to establish an efficient and safer transaction platform for each individual user. Meanwhile, they have also strived for a harmonious familiar environment where every user is made to experience a cheerful, helpful, and relaxing atmosphere when undertaking online services (China Mobile, 2018).
Since 2012, Alipay has been releasing yearly reports. The majority of these reports have managed to create hypes on social media and made the company a household name in China (Blut et al, 2015). Alipay’s branding and marketing strategy has been considered as effective and successful by other market players who want to replicate its strategy to attract the audience and entice new consumers. Alipay for instance endeavors to arouse the curiosity of the target customers by using content curation from copywriting, drawing from specific images, objects, and events (Blut et al., 2015). From Alipay’s end year summary, the firm collects transactions, and fragments from the spending history of its users and re-organising the data inform of the Hypertext Markup Language (HTML5) where the codes are employed in presenting and structuring content on a webpage and finally delivering the acquired data to its users through their individual Alipay accounts. HTML5 makes this possible since a part from being cross-platform and free, it allows each user to access summary through smartphones, tablets, Smart TVs, and notebooks. In these ways, the target customer’s curiosity is not only aroused but they are also engaged accordingly (Choi, and Zhang, 2015).
Alipay also grants its users an opportunity of posting and sharing links of their summaries to their friends via instant messaging and across different social networks without significant compatibility issues. Consequently, this helps in maximising customer awareness of the brand and products (Choi and Jin, 2015).
From Alipay’s social media platform, it is possible for Alipay’s users to tell from the screenshot of their summaries and that of their friends, as well as the categories where spent more compared to others and the total amount spent by one over the year. Consequently, this significantly motivates users including those who are yet to share their yearend summaries to post their summaries too on social media platform as they compete and compare with others (Choi, and Jin, 2015).
In the current perspective, people have to spend at least something each day whether it is goods, food or services. Alipay’s digital release of user summaries every year is informed of this understanding and the intention is to draw attention from the public about their brand. It also helps in stirring conversations among users who will also be encouraged to share information to significant others to social networks (Viral Access Asia, 2018). When the audiences establish the campaign content to be related, they seem to be more engaged and hence help in increasing the publicity of Alipay through sharing content regularly across different social media networks. This has also been important in drawing potential customers as well as creating more opportunities through the trust established between users and the service (Viral Access Asia, 2018).
Alongside direct online payment services, Alipay has also installed different applications on its platform for its users who visit different entertainment and game sites. This is also the same case with users who are fond of informative community activities (Choi and Jin, 2015).
Alipay has also targeted tourists, in this endeavor; they have opened local wallets which have enabled peer-to-peer transactions within local economies. However, in making this possible they have partnered with different companies that have local knowledge. The strategy has helped it create a presence in over 26 countries across, Southeast Asia, Europe, East Asia, and North America (Lee, 2016). Nonetheless, Alipay’s overseas expansion is focused on South Asia, and East Asia which happens to be the first stop of Chinese internet firms. The tech environment of Southeast and South Asia is similar to China in many ways. However, Alipay is also expanding to other developed markets such as Europe where it created a presence in 2015. This is after realization that developed markets provided a stable foundation for mobile payment through credit cards and digital currencies (Lee, 2016). The following figure presents a comparison of the branding strategies between Alipay and WeChat China
Figure 4-3: comparison of the branding strategies between Alipay and WeChat. Source: Graphic Asia Briefing (2018)
From the figure above, it is apparent that while Alipay has more users in China than WeChat, it also enjoys a larger market share and a lesser transaction fee. In addition, it also has a lesser verification time compared to its counterpart.
4.4 The Impact of Alipay’s Branding Strategy on Customers
In November 11, 2016, Alipay invented Kwangkunjie (Single’s Day), which is basically a one-day online sale which is similar to black Friday. The event which took a total of eleven days helped Alipay to realise a significant level of turnover from all its platforms (Lee, 2016). During this time alone, the total turnover amounted to 91.2 billion Yuan (US$13.68 billion) and which involved 467 logistics orders and 232 countries around the world. These figures set a world record for a one-day online transaction volume (Choi and Sun, 2015).
The escrow service introduced by Alipay enables users to evaluate the services before paying for them. This service is essential since it offers consumers guaranteed intermediation by a third party which is authorized (Chohan, 2014). This is a necessity considering the weak consumer protection regulations and laws existing in China. The proactiveness of this service has made Alipay a unique payment service among its rivals. For instance, in relation to Paypal, which is a U.S based payment service; Alipay offers a guarantee for transactions to its users. In addition, the firm also offers superior online payment functionalities through integrated varied functions including movies, games, movies among others (Chohan, 2014). Contrastingly, Samsung Pay, a Korean based payment system offers flexibility. Despite this, Alipay has managed to appeal to more customers because of the integrated multi-user friendly services which can be found under one roof (Alipay, 2016).
In 2017, the volume of third-party online payment increased significantly to eight trillion Yuan (US$1.2 trillion). This represents a growth of 50.5% as compared to the previous year, 2016. According to Choi and Sun (2015), the rapidly increasing growth was represented by Alipay with a 49.6% market share or 3.87 trillion Yuan, as indicated in Figure 1.
Figure 4-4: Third Party Online Payment Market in China, (2017). source: Choi and Sun (2015).
From figure 1 above, it is apparent that Alipay is the leading player in online payment services in the Chinese market.
On the current perspective, Alipay’s payment service customers are more than 300 million worldwide. Additionally, the escrow support system by Alipay has propelled the company’s online market share especially in China. This service has made it possible for consumer in this country to integrate online shopping with online logistics and payments via one-source, multi-channel transactions (Alipay, 2016).
The consistent success of Alipay as a brand is contributed by the organisational structure of Alibaba, the parent company of Alipay. This organisation structure is designed in such a way that users mind, needs and demands are read while their demands are pulled rather than being engaged in the kind of promotional marketing that is push oriented. Choi and Sun (2015) further observes that the long-term performance of Alipay can be sustained owing to the current marketing strategies which are not only performance oriented, but also user friendly. What is more, the value creation that is framed on network management with different level of participants of a particular product or service is crucial to sustainability to effective management of e-business (Chohan, 2014).
Choi (2014) observes that the sustainable performance of online services ought not to be based on instantaneous, simple intentions in the short term. Instead, it should be based on the re-use intentions for the long term. Chinese customers are fast embracing “multichannel” shopping behavior which although creating opportunities but has also challenges for social –e-commerce firms, brands or retailers. Nonetheless, Alipay and its payment system particularly offer a marketing and payment platform which is the most relevant in China.
Currently, Alipay is among the leading platforms for online payment users and those doing shopping as illustrated in the figure 4-5. The firm also announced that in 5 years, they will not only be focusing themselves on their core business of online payment services but also assist internet users in finding jobs or starting their own businesses. Within only 2 years, Alipay has been able to create over 0.5 million jobs for Chinese citizens only. From 2008, the user rate and consumption through Alipay has increased to a significant level (Chohan, 2014).
Figure 4-5: Leading payment platforms. Source: Statista (2018)
4.5 How Globalisation has influenced Alipay’s Branding Strategy
Alipay is one company which has successfully exploited the opportunities presented by globalisation to enhance its growth (Liu, 2015). Accordingly, the company has endeavored to build a global presence through using digital technologies in leveraging partnership with companies and industries in various parts of the world. The digital ecosystems have been employed in delivering the best in class technology, accelerating businesses, adding features to its products and services as well as ensuring interoperability of its services across borders (Liu, 2015), as illustrated below;
Figure 4-6. Alipay’s cross border services. Source: Business Insider (2018)
Bhattacharya et al, (2017) observes that Alipay has targeted international travelers by forming an ecosystem of payment gateways, banks, and other hospitality services including Marriott and Uber. The firm facilitates for travelers to book hotel rooms and access transportation services without necessarily leaving the Alipay ecosystem. Consequently, this has in a great deal helped Alipay in engaging and retaining and engaging users across a diverse range of contexts. The strategy has also made it easy for the firm to meet the needs of customers even to products or services which are not within the offering of the brand. Alipay has also forged collaboration with a network of logistic firms such as Cainiao China Smart Logistics while also investing in diverse corporations in multiple industries both in China and other parts of the world. Some of the large companies which the firm has partnered with include but not limited to Paytm, Snapchat, SingPost, Kuaidi Dache, and Kabam. Globally, Alipay has been aggressive on a number of initiatives. For instance, it has invested in V-Key, a Singapore based security technology, and Indian based payment service Paytm which have successfully enhanced the brands global presence and technological capabilities (Bhattacharya et al, 2017). Similarly, Alipay’s ePass, an innovative product launched by Ant Finance providers retailers in the US with avenue logistics and support to Chinese customers. Alipay also partnered with Global Blue, a Swiss tax refund firm to create a presence in Europe. This has successfully allowed tourists especially those from China to credit value tax refunds on their purchases directly from their Alipay accounts (Liu, 2015).
These companies are interconnected and centered on Alipay’s main commerce business. However, they have collectively reinforced the capabilities of not only Alipay but also the whole group in their worldwide operations. Furthermore, the ecosystem has helped Alipay in reaching into multiple industries, sectors and customers all over the world (Liu, 2015).
By partnering with other technology partners and developers through global digital systems, Alipay has successfully managed to introduce innovative products and services such as the escrow services. Furthermore, new products and services are also being developed by the company and added to the pool of offerings by the brand. Moreover, the existing products are also being improved on a consistent basis. This explains why value addition to the existing products and innovation is a multidimensional and continuous activity for Alipay (iReaserch, 2014).
Alipay is right at the center of China’s online payment market handling over 50% of all online payment transactions. The core of Alipays ecosystem began to be built in 1999 as simply a business-to business trading website. However, this was expanded into customer to customer e-commerce (Taobao) in 2003 and later customer to business online retailing (Tmall) in 2008. In further complying with the demands of globalisation and tap the technological opportunities, Alibaba (the parent company of Alipay) has created its own cloud data service platform (identified as Ali Cloud Computing), the popular financial ecosystem (Ant Financial), and worldwide entertainment business (Ali Music and Alibaba pictures (iReaserch, 2014).
In general perspective, Alipay’s internet finance ecosystem aligns well with its overall mission of supporting individuals, businesses and corporations in diverse backgrounds in their globalisation efforts, market penetration and cross-border ecommerce especially in China (iReaserch, 2014). Hendrichs (2015) observes that despite these efforts, it still remains to be seen how Alipay employs its ecosystem in growing outside China and competing with other global online giants such as PayPal.
As indicated by the findings, it is evident that Alipay has stood out from the rest because of its unique branding strategies. Despite the values of convenience, speed, ease of use and affordability being common among other online payment platforms, Alipay has differentiated itself as an online payment platform whose products and services are focused on mainly Chinese consumers. Concerning its expansion approach, Alipay has made headlines recently due to its different approach from what the competitors including PayPal and Apple are employing. Compared to Apple Pay and PayPal, Alipay does not push its brand into new regions. Rather, it seeks partnership with already popular firms. This research also evaluated the firm’s implementation strategy and established that, Alipay consistently advocates for a culture of active, reliable and fast transaction culture while insisting on integrity and credibility principle. The firm has always endeavored to establish an efficient and safer transaction platform for each individual user. Meanwhile, they have also strived to a harmonious familiar environment where every user is made to experience a cheerful, helpful, and relaxing atmosphere when undertaking online services. In regard to the impact of Alipay’s Branding Strategy on Customers, the study has found that the company’s market share in China and other parts of the world have been rising on a consistent basis. This has largely been attributed to the efficient market and branding strategies by the company. Last but not least, the company has been significantly influenced by globalisation in various ways. Accordingly, the company has endeavored to build a global presence through using digital technologies in leveraging partnership with companies and industries in various parts of the world. The digital ecosystems have been employed in delivering the best in class technology, accelerating businesses, adding features to its products and services as well as ensuring interoperability of its services across borders.
Chapter 5 Conclusion & Recommendations
This study was aimed at evaluating the impact of brand image on customers. Accordingly, this chapter presents the summary of key findings for each of these objectives; a) to establish how Alipay implements its branding strategy, b) to find out the impact of Alipay’s branding strategy on customer and lastly (c) to determine how globalisation has contributed to Alipay’s branding strategy. The final part is the recommendations based on the findings.
5.2 Summary of Findings
5.2.1 Alipay’s Branding Strategy
From the findings, it is clear that Alipay offers a good bechmarking case on how Chinese and worldwide companies should develop third party online payment services. The firm has successfully managed to differentiate itself as an online payment platform whose products and services are focused on mainly Chinese consumers.
Compared to Apple Pay and Paypal, Alipay does not push its brand into new regions. Rather, it seeks partnership with already popular firms to create a presence in foreign lands. Some of the companies it has partnered with include Mynt, Paytm, Kakao Pay, MoneyGram, and BlackBerry Messenger. The strategy has helped it create a presence in over 26 countries across, Southeast Asia, Europe, East Asia, and North America. However, the focus of Alipay’s marketing strategy is on South Asia, and East Asia which happens to be the first stop of Chinese internet firms. Moreover, the tech environment of Southeast and South Asia is similar to China in many ways.
Among the key success factors for Alipay is the unique escrow guarantee system of online users which has managed to create trust among the brands customers towards the brand. Furthermore, the varied multi-channel services have created convenience for users including those interested in games or community activity who can now find what they want under one platform.
5.2.2 The Impact of Alipay’s Branding Strategy on Customers
From the discussions, it is clear that Alipay’s unique branding strategy has had a positive influence towards the brand image. Particularly, the strategy has helped in creating a strong and unique brand which is appealing and attractive to existing and potential customers. The high volume of customers has subsequently turned into positive revenue for the company. For instance, the study notes that in 2016 alone, the company managed to receive a total turnover of 91.2 billion Yuan (US$13.68 billion) in just one day. These were extremely good results for the group and which was largely attributed to high number of customers who were using their services.
The proactiveness of Alipay’s escrow service has made Alipay a unique payment service among its rivals. For instance, in relation to Paypal, which is a U.S based payment service; Alipay offers a guarantee for transactions to its users. This has been a good strategy to improve the brand image positively and make it appear favorable among its customers. In addition, the firm also offers superior online payment functionalities through integrated varied functions including movies, games, movies among others. In this regard, Alipay has managed to appeal to more customers because of the integrated multi-user friendly services which can be found under one roof.
The study has also noted that consistent success of Alipay as a brand is contributed by the organisational structure of Alibaba, the parent company of Alipay. This organisation structure is designed in such a way that user’s minds, needs and preferences are read while their demands are pulled rather than being engaged in the kind of promotional marketing that is push oriented. What is more, the value creation that is framed on network management with different level of participants of a particular product or service is crucial to sustainability to effective management of e-business.
5.2.4 How Globalisation has influenced Alipay’s Branding Strategy
This study also sought to find out how globalisation has influenced Alipay’s branding strategy. Accordingly, the study established that Alipay has been forced to tailor their marketing strategies to a global market rather than to a regional market. This is an effort or remaining competitive in this highly globalised and technologically driven world. Accordingly, the company has endeavored to build a global presence through using digital technologies in leveraging partnership with companies and industries in various parts of the world. The digital ecosystems have been employed in delivering the best in class technology, accelerating businesses, adding features to its products and services as well as ensuring interoperability of its services. Accordingly, Alipay has targeted international travelers by forming an ecosystem of payment gateways, banks, and other hospitality services including Marriott and Uber. Alipay has also forged collaboration with a network of logistic firms such as Cainiao China Smart Logistics while also investing in diverse corporations in multiple industries both in China and other parts of the world. Some of the large companies which the firm has partnered with include but not limited to Paytm, Snapchat, SingPost, Kuaidi Dache, and Kabam.
Despite its success in the Chinese market, Alipay needs to integrate more sustainable operation for a more enhanced performance as an online payment service. This is in consideration of the dynamic market environment in China which does not guarantee that the same strategy will be effective for a long term. Specifically, the firm need to take into concern that web marketing for online payment service should consider sustainable relationship with customers. Stated differently, the firm need systematically and precisely evaluate its marketing and branding efforts for sustainable management.
There is no doubt that the growth rates of northeast Asian nations such as Korea and China are among the leaders in the global economy. However, it ought to be considered that sustainable performance may not be guaranteed to persist. Therefore, it is crucial for Alipay to consider incorporating more sustainable strategies from the perspective of the general performance of the e-business global market context.
Chapter 6 Reflections
The objectives for this dissertation were well defined. Furthermore, I believe that the objectives were adequately covered through this research. Nonetheless, the current study has rich in-depth information gained from secondary research. In this regard, the research questions are adequately answered. What cannot be ascertained however is the authenticity of the information, being majorly from a secondary research.
Therefore, for a more relevant outcome, it requires that primary method of data acquisition be carried out in order to effectively ascertain the practicability of the outcome. Although the secondary information sought and used were the most current, the author believes that ground study was necessary for this case study. Therefore, it will work well if future researchers supplemented secondary research with primary data. Moreover, future research future research need to compared the strategies used by different international online payment system rather than focusing on one.
The final outcomes of the research are well aligned with the initiation expectations on a positive front. In other words, while the research objectives were realised, the findings of the study were similar to the research hypothesis that was initial expectations of the research.
I can say the planning of this project was good. Nonetheless, I experienced challenges here and there particularly during the data collection stage. To be honest, finding relevant and up-to-date information was quite challenging. This task alone took a lot of time than expected. This forced me to extend the timeline of the whole dissertation by at least one month. However, on my side, the work done was satisfactory and to the best of my ability, but I could have incorporated my colleagues especially those who did similar work earlier to give me ideas on the expected challenges and how best to handle them. Also, I could have been very strict on time management to ensure that everything goes in order and as per the stipulated timeline.
I was very careful to ensure that credit was given to all sources used for the study. Names of authors were carefully cited and references alongside the necessary details.
Today’s market place is highly competitive and hence the role of market intelligence is proving to be prominent than ever before. Equipped with research skills and knowledge, I am in a position of creating a competitive advantage for business through acquiring secondary information concerning different aspects of businesses.
In light of my experiences, I would improve my dissertation through acquiring better time management skills, and seeking the guidance not only from my supervisors but also from relevant colleagues and sources on how better to do it.
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Silas Nyamweya (author) from Nairobi, Kenya on March 22, 2021:
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