TALLINN UNIVERSITY OF TECHNOLOGY

School of Business and Governance

Subarna Islam Sharna

DIGITAL TRANSFORMATION IN ALIBABA’S E-

COMMERCE ECOSYSTEM: LEVERAGING
TECHNOLOGY FOR TRANSFORMATION
Master’s thesis
International Business Administration,
International Business

Supervisor: Tarmo Koppel, PhD

Tallinn, 2024
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The document length is 14,839 words from the introduction to the end of the conclusion.

Subarna Islam Sharna

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Student Code: 223559TVTM
Student email address: [email protected]

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TABLE OF CONTENTS

ABSTRACT ....................................................................................................................................5

INTRODUCTION ...........................................................................................................................6

1. LITERATURE REVIEW ............................................................................................................9

1.1. Technology-Organization-Environment (TOE) framework .................................................9

1.2. Relevant previous studies ................................................................................................... 11

2. RESEARCH METHODOLOGY ..............................................................................................17

2.1. Research design ..................................................................................................................17

2.2. Research method.................................................................................................................18

2.3. Data subject ........................................................................................................................20

2.4. Data source .........................................................................................................................20

2.5. Questionnaire survey ..........................................................................................................21

2.5.1. Descriptive analysis .....................................................................................................27
2.5.2. Independent samples t-test...........................................................................................28
2.5.3. Statistical significance tests (P value)..........................................................................29
2.5.4. Pearson’s correlation....................................................................................................29

2.6. Customer feedback analysis with NLP ...............................................................................30

2.6.1. Thematic analysis ........................................................................................................35

2.7. Historical documents and reports .......................................................................................36

2.7.1. Trend analysis ..............................................................................................................37

3. RESULTS ..................................................................................................................................38

3.1. Independent samples t-test and descriptive statistics .........................................................38

3.2. Pearson’s correlation...........................................................................................................41

3.3. Qualitative analysis of digital transformation impacts using the TOE framework ............43

3.4. Thematic sentiment analysis of customers’ reviews ...........................................................45

3.5. Trend analysis on business performance ............................................................................47

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 3.6. Empirical findings on research questions ...........................................................................50
3.6.1. Empirical findings on main research question ............................................................50
3.6.2. Empirical findings on sub research question 1 ............................................................52
3.6.3. Empirical findings on sub research question 2 ............................................................53

4. DISCUSSION............................................................................................................................55

CONCLUSION .............................................................................................................................61

REFERENCES ..............................................................................................................................63

APPENDICES ...............................................................................................................................74

Appendix 1: Survey questionnaire ............................................................................................74

Appendix 2: Summary statistics of thematic sentiment analysis ..............................................77

Appendix 3: Financial performance ..........................................................................................78

Appendix 4: Open Ended Questions .........................................................................................79

Appendix 5: Non-exclusive licence ...........................................................................................80

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ABSTRACT

In the realm of e-commerce, the effective utilization of digital technologies is paramount for
maintaining competitiveness. However, many companies may struggle to leverage these tools
efficiently, potentially hindering their growth and sustainability. Alibaba's acquisition of Daraz
Group and its subsequent strategic utilization of digital technologies, including AI, big data, and
cloud computing, offer a pertinent case study for understanding the impact of digital
transformation on overall business performance in the e-commerce sector. This study aims to
explore how this acquisition and the adoption of digital technologies have influenced the
evolution of Alibaba's business performance over time, further emphasizing aspects like
customer engagement and supply chain management.

Employing a mixed-method approach, this research combines employee surveys, Natural

Language Processing (NLP) analysis of customer comments, and financial performance
evaluation. These methodologies offer a comprehensive understanding of how the acquisition
and digital transformation initiatives have influenced various aspects of Daraz Group's business
operations over time.

The findings indicate significant improvements across multiple domains following the
acquisition and implementation of digital transformation initiatives. These include enhanced
technology perception, increased user engagement, improved supply chain management, and
positive financial metrics. Such outcomes underscore the transformative potential of strategic
integration of digital technologies in the e-commerce sector.

This study provides valuable insights for e-commerce businesses looking to undergo digital
transformation. Drawing from Daraz Group's experiences within Alibaba highlights the
importance of innovation and adaptability in navigating the digital landscape effectively. By
offering practical recommendations, this research contributes to enhancing competitiveness and
operational efficiency in the e-commerce sector.

KEYWORDS: Digital transformation, Big data analytics, E-commerce, Artificial Intelligence,

User engagement, Supply chain management, Data-driven insights.

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INTRODUCTION

Digital transformation is a long-term effort to rewire how an organization continuously improves

and changes. The goal of a digital transformation should be to build a competitive advantage by
continuous deployment of tech at scale (McKinsey & Company, 2023). Under the leadership of
Jack Ma, a group of eighteen individuals founded Alibaba Group in 1999 with a shared vision
that the Internet would level the playing field by allowing small businesses to use innovation and
technology to expand and compete more successfully in both the local and international markets.
Together with several other companies, it is currently a holding company for six significant
business groups: the Taobao and Tmall Group (China Commerce), the Alibaba International
Digital Commerce Group (International Commerce Retail), the Cloud Intelligence Group, the
Local Services Group, the Cainiao Smart Logistics Network Limited, and the Digital Media and
Entertainment Group (Alibaba Group, n.d.).

Daniel Zhang, the former CEO of Alibaba, referred it as a data manufacturing company. He
highlighted that Alibaba is an economy and remarked that the binding factor among all its
businesses is "consumer insight and data" (Dignan, 2017). It highly concentrates on digital
transformation in its mission and vision. Hence, this study explores how Alibaba leverages
digital technologies to transform various aspects of its e-commerce ecosystem, operating under
the Alibaba International Digital Commerce Group.

In the backdrop of Alibaba's expansion strategy, in 2018, it acquired Daraz Group underscoring
the paramount importance of strategic management in orchestrating a successful digital
transformation (Russell, 2018). Daraz is a prominent South Asian e-commerce platform that was
founded in 2015 with the aim of using technology and commerce to advance development in
Bangladesh, Pakistan, Sri Lanka, and Nepal (Alibaba Group, n.d.). The synergy of Alibaba's
expertise in digital technologies with Daraz Group's established presence in the South Asian
market creates a unique context for exploring how such strategic actions impact the evolution of
the e-commerce ecosystem.

The relevance of this topic is further accelerated as the acquisition poses implications not only
for Alibaba's global business strategy but also for the specific dynamics of the South Asian e-

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commerce landscape. Analyzing how Alibaba strategically manages the digital transformation
within the acquired entity, incorporating elements of advanced technologies, becomes crucial for
understanding the synergy between the parent company and the regional subsidiary. The
experiences and practices resulting from Alibaba's acquisition of Daraz Group serve as a
pertinent subject to this study, offering insights into efficient strategies for managing digital
transformation within diverse cultural and market contexts.

The object of this research is the impact of Alibaba's digital transformation strategies. It involves
an explicit analysis of Alibaba's technology advancements, ecosystem expansion, and shifts in
strategy to improve its competitiveness, encouraging innovation, and promoting sustainable
growth in the digital era.

This report would study the process by investigating how Alibaba enhanced customer
engagement and optimized supply chain management using digital technologies (AI-powered
Chatbots, interactive platforms, data driven insights) in South Asian market and how positively
or negatively those impacted its business performance.

The current research problem is that many local companies in the e-commerce sector may not be
effectively leveraging digital technologies, which can impact their competitiveness.
Understanding how Alibaba has succeeded in this area is critical to addressing this issue. The
knowledge gap in the study of Alibaba's digital transformation at Daraz Group points to area
where we don't have enough information or a thorough understanding. It includes how
organization's perceived technological restructuring, employees adapt to new digital tools, the
effects on supply chain efficiency, and the changing ways customers interact within the online
platform. Addressing these gaps means doing new research to fill in these missing details and
improve our understanding.

The aim of this research is to identify the impact of leveraging digital technologies in the e-
commerce sector to enhance customer engagement, optimize supply chain management, and
elevate overall business performance and competitiveness, utilizing Alibaba's experiences on
Daraz Group as a guiding case study.

This research intends to answer the following main research question by addressing two
additional sub-research questions:

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RQ: How has the acquisition of Daraz Group by Alibaba and its strategic utilization of digital
technologies, including AI, big data, and cloud computing, influenced the evolution of its overall
business performance over time?
Sub-RQ1: How has digital transformation at Daraz Group impacted customer engagement and
supply chain management, key components of its e-commerce operations?
Sub-RQ2: What lessons can be drawn from Daraz Group's experiences within Alibaba's
ecosystem for other companies seeking to navigate the digital era in the e-commerce sector?

This thesis contains three primary chapters. The first chapter offers an in-depth exploration of
existing scientific frameworks/models relevant to the research topic. It synthesizes primary
concepts and theories from previous studies, providing a solid theoretical foundation for the
research. The second chapter explains the rationale behind the chosen research method, data
sources, collection procedures, sample size determination, and data analysis techniques. This
chapter ensures transparency and rigor in the methodology employed by addressing potential
data problems or restrictions encountered during the research process. The third chapter presents
the findings of the research and evaluates their implications. It analyzes the results in the context
of the established theoretical framework and methodology, drawing conclusions and discussing
their significance. It also outlines the possible limitations of the current research. The main body
of the report ends with discussing the results drawn from the empirical analysis and concluding
the thesis, highlighting the main findings and providing suggestions for future research.

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1. LITERATURE REVIEW

This section aims to offer the reader an understanding of the relevant theoretical background
utilized as a framework for the research. It also illustrates previous studies on the suitable field
that helps to understand the actuality of this research and provide a rationale for the structure and
format of this study, further highlighting the gaps in existing research.

1.1. Technology-Organization-Environment (TOE) framework

Technology-Organization-Environment (TOE) framework was developed by Tornatzky and

Fleischer (1990). The TOE framework, developed in the field of information systems (IS), aims
to explain how various factors influence the adoption and utilization of new technologies. It
consists of three primary components. Firstly, technology context includes various consideration
such as technology functionality, complexity, compatibility with existing systems, and ease of
use (Starbuck, 1976). The term "organization" describes the internal environment in which
technology has been implemented, considering variables like the organization's size, resources,
culture, and structure (Tornatzky & Fleischer, 1990). Finally, the term "environment" describes
the external background of an organization's operations, which includes different aspects like
market conditions, regulatory requirements, and social and cultural norms (Baker, 2012).

Figure 1: Technology-Organization-Environment framework (Tornatzky & Fleischer, 1990)

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According to the author, TOE framework has great potential to be used to IS innovation domains
and is theoretically and empirically viable. However, the particular factors in the mentioned three
contexts might vary amongst studies. Previously, several authors used only the TOE framework
to understand different IT adoptions, such as: electronic data interchange (EDI) (Kuan & Chau,
2001); open systems (Chau & Tam, 1997); enterprise resource planning (ERP) (Pan & Jang,
2008); and business to business (B2B) e-commerce (Teo et al., 2006) etc.

TOE framework provides a comprehensive overview on technology adoption and

implementation. It acknowledges that internal and external factors play a critical role in
influencing the adoption and use of technology, contrasted with relying only on the technology
or the organizational context (Habiboğlu et al., 2020). The adaptability of the TOE framework is
a further advantage. Researchers and practitioners in several subjects can find the framework
beneficial as it can be applied to a broad range of technology and organizational environments.
Additionally, the framework is flexible enough to accommodate both qualitative and quantitative
research methodologies (Habiboğlu et al., 2020).

Nevertheless, the TOE framework has certain drawbacks. One drawback is that it could be too
general broad, which makes it challenging to use in particular contexts. Furthermore, the
framework might not adequately represent the complexity of adopting and implementing
technology, especially in rapidly changing situations where external factors might significantly
influence technological choices (Bryan & Zuva, 2021).

To better understand how Daraz Group, an Alibaba subsidiary, strategically uses digital
technologies like artificial intelligence (AI), big data, and cloud computing to maximize overall
business performance within its e-commerce ecosystem, the TOE framework offers a systematic
approach to examine the interactions between organizational, environmental, and technological
factors.

Specifically, the technology context component of the TOE framework allows for analyzing the
functionality, complexity, and compatibility of the digital technologies employed by Daraz
Group. The organization component enables the exploration of internal factors such as
organizational culture, resources, and structure, which may influence technology adoption and
implementation. Lastly, the environment component facilitates the examination of external

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factors such as regulatory requirements, customers' perceptions, and social norms, which may
impact Daraz's digital transformation efforts within the broader e-commerce landscape.

This study uses the TOE framework to rigorously assess how Daraz's overall company
performance has changed over time as a result of Alibaba's acquisition and strategic application
of digital technology. Due to its versatility and flexibility, the framework is a good fit for
examining complex phenomena like digital transformation in this dynamic organizational
setting. Therefore, the TOE framework serves as an appropriate analytical lens to guide the
inquiry into the research questions posed in this thesis.

1.2. Relevant previous studies

Consumer expectations are changing in several ways as e-commerce experiences a digital

revolution. Consumers today need experiences tailored to them specifically based on data
insights and focused suggestions (Kraus et al., 2021). Customers now expect coherence between
online and offline touchpoints, such as omni channels, and a seamless multichannel experience
(Hanelt et al., 2021). Platforms should disclose their transparent data practices considering the
growing concerns about enhanced security and privacy. The rising amount of community
involvement, adaptable regulations, and highly tailored details influences consumer choices
(Schneider & Kokshagina, 2021). To maintain a customer-centric strategy, platforms for
managing digital transformation have to be consistent with these changing expectations.

Big data analytics is essential to the digital transformation of e-commerce since it gives
companies competitive advantages and insightful information (Wang & Wang, 2020). E-
commerce platforms analyze enormous magnitude of consumer data by using big data, which
helps businesses comprehend patterns, behavior, and preferences (Vassakis et al., 2018).
Businesses may optimize product recommendations, personalize marketing campaigns, and
improve the consumer experience by utilizing these insights. Demand forecasting, inventory
control, and supply chain optimization are only a few aspects among the extensive record of
benefits of employing big data analytics, which uplift operational effectiveness (Agnihotri,
2021). In addition, it helps with cybersecurity, risk management, and fraud detection,

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guaranteeing the safety of online transactions (Vossen, 2014), while ensuring organizations
remain competitive in the rapidly evolving digital environment.

In addition to artificial intelligence (AI), other cutting-edge technologies such as augmented

reality (AR) and virtual reality (VR), have also been used to improve online shopping, enabling
users to view products in a virtual environment prior to making a purchase (Pachoulakis &
Kapetanakis, 2012). Smart and customized interactions between customers and gadgets are made
possible by Internet of Things (IoT) devices, which enhance the smooth and connected shopping
experience (Yu et al., 2017). Blockchain technology is used for secure and transparent
transactions, particularly in supply chain management and payment processing (B. Rawat et al.,
2021).

E-commerce sites use various artificial intelligence (AI) techniques to engage customers.
Chatbots driven by AI provide personalized customer service by answering questions instantly
and assisting clients with their purchases (Moriuchi et al., 2021). Artificial intelligence (AI)
systems examine consumer behavior and preferences to offer personalized product
recommendations that improve the shopping experience (Pallathadka et al., 2023). AI is also
used in targeted marketing initiatives, segmenting the consumer base according to their
preferences and preceding purchases in order to offer customized promotions (Yager, 2000). E-
commerce platforms can enhance customer satisfaction and boost revenue by optimizing client
interaction methods through implementing AI technologies.

Previous research has shown that leadership is critical to the success of digital transformation
initiatives. A clear vision for the organization's digital future, the capacity to convey this vision to
all levels of the business, and a dedication to developing an innovative and adaptable culture are
characteristics of effective leadership (Porfírio et al., 2021). Success in digital transformation has
been linked to transformational leadership styles that foster employee involvement,
inventiveness, and a proactive attitude to change (Li, 2020). Furthermore, it has been determined
that leadership participation in strategic planning, resource allocation, and decision-making is
essential for overcoming obstacles and ensuring that digital initiatives are in line with overall
organizational goals (Hai et al., 2021).

Different e-commerce businesses have utilized a range of approaches during their adoption of
digital transformation. Enhancing the consumer experience through customized and smooth

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interactions (Tyrväinen et al., 2020) across internet channels is a popular strategy. Businesses
frequently use advanced analytics, such as big data and machine learning, to understand the
behavior and preferences of their customers. This knowledge enables them to provide
customized services and focused marketing (Anshari et al., 2019). An alternative approach is to
streamline supply chain operations by integrating cutting-edge technologies such as blockchain
and IoT (Internet of Things) to augment responsiveness, efficiency, and visibility (Dutta et al.,
2020). Another usual method for gaining access to specialist knowledge and cultivating
relationships is through strategic alliances and collaborations with IT companies, startups, and
industry leaders (Martínez-Noya & Narula, 2018).

Key performance indicators (KPIs) and measurement metrics are essential for assessing the
results of digital transformation projects in e-commerce (Verhoef et al., 2021). Companies
monitor measures of operational efficiency such as supply chain performance, order fulfillment
time, and inventory turnover (Vogelsang et al., 2018). Metrics related to finances, for instances,
increase in revenue, profitability, and ROI, are crucial markers of the success of digital
transformation (Cichosz et al., 2020). Furthermore, qualitative metrics like employee feedback,
brand perception, and customer satisfaction scores can offer insightful information about how
digital activities affect different stakeholders holistically (Guenzi & Habel, 2020).

Organizational change is a complex process that companies must carefully navigate during
digital transformation. Many businesses consider a strategic approach to change management,
which includes leadership alignment, employee involvement, and clear communication (Konopik
et al., 2022). Identifying important stakeholders, comprehending their concerns, and overcoming
resistance with incentives (Schwarzmüller et al., 2018), support, and training are necessary steps
in successful change programs (Wessel et al., 2021). Furthermore, companies can become more
adaptive to changing market dynamics and technology environments by cultivating a culture of
innovation and continuous learning (Vey et al., 2017). In order to adapt to new digital
capabilities and business models, companies may also invest in organizational reorganization and
talent development (Piccinini et al., 2015). Coordination between departments and cross-
functional teams is necessary to promote synergy and guarantee the accomplishment of change
projects (Burchardt & Maisch, 2019).

The following table provides a compact visual overview of the previous relevant studies
described above and the answers to the questions the author tried to explore from these research

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in a suitable context.

Table 1. Relevant previous studies and their appropriate context

Relevant previous studies and questions answered Author (year)
How do customer expectations evolve in the Kraus et al. (2021), Hanelt et al. (2021),
context of e-commerce digital transformation? Schneider & Kokshagina (2021).
How has big data analytics been utilized in e- Wang & Wang (2020), Vassakis et al.
commerce digital transformation? (2018), Agnihotri (2021), Vossen
(2014).
What innovative technologies, beyond AI, have Pachoulakis & Kapetanakis (2012), Yu
been employed during e-commerce digital et al. (2017), Yu et al. (2017).
transformation?
How do e-commerce platforms leverage artificial Moriuchi et al. (2021), Pallathadka et al.
intelligence for customer engagement? (2023), Yager (2000).
What role does leadership play in successful Porfírio et al., (2021), Li (2020), Hai et
digital transformation? al. (2021).
What strategies have other e-commerce Tyrväinen et al. (2020), Anshari et al.
companies employed in digital transformation? (2019), Dutta et al. (2020), Martínez-
Noya & Narula (2018).
What measurement metrics are commonly Verhoef et al. (2021), Vogelsang et al.
employed to evaluate digital transformation (2018), Cichosz et al. (2020), Guenzi &
outcomes? Habel (2020).
How do other companies navigate organizational Konopik et al. (2022), Schwarzmüller et
change during digital transformation? al. (2018), Wessel et al. (2021), Vey et
al. (2017), Piccinini et al. (2015),
Burchardt & Maisch, (2019)

Source: Author (2024); based on the reference and discussion in sub-chapter 1.2.

The existing literature on e-commerce and digital transformation provides valuable insights into
various factors of the evolving landscape. However, several significant gaps persist. Firstly,
while there is discussion surrounding emerging technologies like AI, AR, VR, and blockchain
and their potential to enhance the e-commerce experience, further research is needed to

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understand how these technologies can be integrated cohesively to create immersive and
engaging online shopping environments. Secondly, the role of leadership in driving digital
transformation within e-commerce remains underexplored, necessitating a deeper examination of
effective leadership strategies and their impact on organizational culture and performance.

Thirdly, despite the recognition of key performance indicators and measurement metrics as
essential for assessing digital transformation outcomes, there is a lack of consensus on which
metrics are most relevant and effective in the e-commerce context, particularly regarding
qualitative metrics like employee feedback and brand perception. Additionally, the field lacks
comprehensive research on best practices in organizational change management specific to
digital transformation in e-commerce, including strategies for leadership alignment, stakeholder
engagement, and fostering an innovative culture. Lastly, there is a need for more cross-
disciplinary perspectives that integrate insights from technology, business, and sociology to
provide a holistic understanding of the challenges and opportunities of digital transformation in
e-commerce. Addressing these gaps will contribute to a more nuanced understanding of digital
transformation dynamics and inform more effective strategies for organizations navigating the
digital landscape.

The current research on Alibaba's digital transformation strategies builds upon and contributes to
the existing studies in several keyways. First, in examining how Alibaba leverages big data
analytics to gain insights into consumer behavior and preferences, this research extends prior
studies that have focused on the application of big data in e-commerce contexts. While past
research examined at how big data can generally be used to improve decision-making processes,
this report focuses on Alibaba's strategy and provides insightful information on how big data
analytics are implemented and used within the organization. Secondly, it intends to fill a hole in
the existing literature by examining organizational role in a successful digital transformation.
Specifically, the author looked at the traits and behaviors that a successful leader must possess to
navigate these kinds of demanding technical transformations. Although prior research has
acknowledged the significance of leadership in digital transformation programs, few studies have
offered in-depth analyses of the approaches to leadership used in a particular corporate setting,
like Alibaba. This research aims to contribute to the scholarly discourse on digital transformation
in the e-commerce industry, providing insightful information that can be used by future
researchers.

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For various compelling reasons, the analysis of Alibaba's digital transformation strategies and
their impact are highly relevant in the current economic climate. Firstly, being one of the largest
and most dominant e-commerce businesses globally, Alibaba Group's digital transformation
journey is a subject of intense curiosity for academics, business professionals, legislators, and
investors. Obtaining knowledge about how an enormous corporation like Alibaba manages and
executes digital transformation projects may be extremely beneficial in terms of best practices
and insights that can be applied to a variety of businesses in various industries. Second,
organizations must constantly innovate and adapt due to the rapid pace at which technology is
developing and the always changing behavior of their customers.

Alibaba's attempts to keep up with ever-changing demands and expectations of consumers by

utilizing big data analytics, artificial intelligence, and other cutting-edge technology provide a
case study for analyzing the obstacles and effectiveness of such strategies. Furthermore, in the
face of rising globalization and competition, an organization's capacity to effectively navigate
digital transformation has become critical for those looking to stay competitive, improve
operational effectiveness, and foster long-term growth. This study adds to the broader knowledge
on organizational adaptation and technical innovation by illuminating the elements that made
Alibaba's digital transformation successful. As a result, it provides insightful information for
companies looking to prosper in the digital era. Ultimately, the relevance of this study lies in its
potential to inform strategic decision-making, shape industry practices, and inspire further
research in the dynamic field of digital transformation.

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2. RESEARCH METHODOLOGY

This chapter lays out the research methodology based on which the author has designed the
thesis to achieve its preset objectives. It also describes the context of activities, data subjects,
data sources, collection tools, types of data, and analysis, etc. for the research.

2.1. Research design

The author determines that the Pre-Post Study design is the most suitable for this thesis topic,
which explores the impact of Alibaba's digital transformation on Daraz Group. The goal is to
assess the effectiveness and implications of Alibaba's digital transformation. A Pre-Post Study
will allow the author to observe and measure these effects within the organizational setting,
offering a comprehensive understanding of the transformation's impact.

It is also particularly effective when investigating the impact of a transformative process within a
specific organizational context. In this case, it allows for the evaluation of changes before and
after the digital transformation at Daraz Group (Alibaba). Given the practical challenges of
implementing control groups in organizational settings, such a study is more feasible. It aligns
with the realities of business environments, making it easier to capture the authentic impact of
digital transformation on employees, processes, and outcomes.

While lacking a separate control group, the design inherently controls individual differences
within the organization (Stratton, 2019). The focus is on changes within the same group over
time, providing valuable insights into the direct effects of digital transformation on various
aspects of the organization.

This design ensures a clear temporal sequence, allowing us to attribute observed changes to the
introduction of digital transformation initiatives. It facilitates the identification of patterns and
trends, supporting the establishment of a cause-and-effect relationship (Thiese, 2014).

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The research paper adopts a segmented approach to analyze the context, dividing it into two
distinct phases. With Alibaba's acquisition of Daraz Group dating back approximately six years
to 2018, the study outlines the business's evolution into pre- and post-transformation periods.
The pre-transformation phase denotes the state of the business before Alibaba's involvement,
characterized by its operational dynamics and strategies before the acquisition. In contrast, the
post-transformation phase signifies the period after Alibaba's acquisition, during which Alibaba
initiated and executed digital transformation strategies aimed at enhancing Daraz's operational
efficacy and overall business performance. This structured segmentation makes it easier to
analyze the business's growth and the effects of Alibaba's radical tactics on Daraz.

In addressing inherent limitations in data collection from various sources such as customer
reviews and financial performance analysis due to the absence of pre-transformation data, a
tailored approach was adopted. Customer feedback analysis involved segmenting the sample into
distinct periods to understand user sentiments and preferences across various phases post-
acquisition by Alibaba, employing a time series approach for trend analysis. Similarly, financial
performance analysis utilized trend analysis to scrutinize key metrics over multiple reporting
periods, revealing the strategic utilization of digital technologies by Alibaba within its e-
commerce ecosystem including Daraz Group.

2.2. Research method

This study adopts a mixed-method approach to comprehensively investigate the impact of

Alibaba's digital transformation strategies, focusing on its subsidiary, Daraz Group. Integrating
quantitative and qualitative methods allows for a multifaceted exploration of the research
problem.

Quantitative data is collected through surveys comprising closed-ended questions, providing

structured insights into various aspects of Daraz Group's digital transformation. These surveys
are distributed among employees directly involved in e-commerce operations, offering firsthand
perspectives on the organizational changes driven by digital initiatives. Additionally, historical
data and document analysis complement the quantitative foundation, enabling the examination of
trends and patterns over time.

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Qualitative insights are obtained through open-ended survey questions, allowing respondents to
express their views, experiences, and perspectives in greater detail. Thematic analysis is
employed to systematically analyze and interpret these qualitative data, identifying recurring
themes, patterns, and insights relevant to the research objectives. Furthermore, customer
comments regarding the Daraz App, transformed through Natural Language Processing (NLP),
provide valuable direction on user experience, app management, performance, and promotions,
reflecting the impact of digital transformation on customer engagement and satisfaction.

A triangulation approach has been utilized to enhance the integration of qualitative and
quantitative findings. Quantitative data are analyzed to identify trends and correlations, while
qualitative insights offer contextual understanding and nuanced perspectives. The findings from
both methods are synthesized to provide a holistic understanding of the impact of Alibaba's
digital transformation strategies on the Daraz Group.

In addressing the main research question (RQ), quantitative data were derived from surveys
comprising closed-ended questions, historical data analysis, and document analysis. These
quantitative measures provided structured insights into various facets of Daraz Group's digital
transformation journey using the analytical lens of TOE framework. Complementing these
quantitative analyses, qualitative data were gathered through open-ended survey questions and
customer comments processed via Natural Language Processing (NLP). These qualitative
insights offered more nuanced perspectives on user experience, app management, performance,
and promotions, thus enriching the understanding of the digital transformation's impact.

Similarly, for sub-research question (Sub-RQ1), data sources like close-ended survey, provided
quantitative metrics to evaluate changes over time. Meanwhile, qualitative insights from open-
ended survey questions and customer comments, processed through NLP, offered deeper insights
into customer experiences and perceptions, as well as supply chain management dynamics
affected by the digital transformation initiatives.

Finally, in addressing the second sub-research question (Sub-RQ2), qualitative data sources
played a prominent role. Thematic analysis structured within the TOE (Technological,
Organizational, and External) framework provided valuable insights into the lessons learned
from Daraz Group's experience. This qualitative approach facilitated a comprehensive

19
understanding of the organizational shifts, technological advancements, and adaptations
necessary for successful digital transformation in the e-commerce sector.

2.3. Data subject

The research centers on multiple data subjects:

- Alibaba's Ecosystem: Encompassing aspects from customer engagement to supply chain

management. For this category, survey questionnaires have been designed to be filled in by
Alibaba (Daraz Group) employees to share their perceptions of the digital transformation
strategy employed by the organization. The parameters are set based on the theoretical
framework used for this research.
- Consumer Behavior and Preferences: Focused on the e-commerce platform (Daraz) of Alibaba.
This category aims to derive customers' opinions towards digital transformative results brought
out by Alibaba through its app.
- Historical Business Performance: Spanning Alibaba's digital transformation journey for
business performances over the years. This category aims to compare the business performances
of Alibaba post its digital transformation initiatives.

2.4. Data source

The author utilized the following data sources to ensure a comprehensive understanding of the
research:

- Surveys participated by Alibaba’s representatives and employees for insights into digital
transformative strategies, experiences, and impact on overall performances.
- The customer’s comments are available in the Google Play Store on the app store named Daraz.
It helps to evaluate customers' opinions and sentiments towards the transformative initiatives
taken by Alibaba on the Daraz App.
- Annual Reports and Documents published by Alibaba, detailing digital transformation
initiatives and their performances over the year.

20
2.5. Questionnaire survey

The data collected in this section can be characterized as semi-structured data. Employees'
perceptions and opinions regarding the impact of digital transformation strategies adopted by the
organization have been curated through survey responses for quantitative analysis. Since it can
gather significant amounts of data from a substantial number of respondents and let researchers
use probability sampling techniques to provide a representative picture of views and behaviors
within a population, it is highly useful for quantitative analysis (Holm, PhD, 2021). Additionally,
surveys are a useful instrument for researchers when utilized appropriately, given that they can
be tailored to focus on precise, manageable questions that provide quantitative information that
is clear and easy to understand (Mahmutovic, 2022).

Two sets of questionnaires were created which are related but relevant for different timelines, to
collect respondents’ perceptions and opinions about the impact of digital transformation strategy
throughout the pre- and post-digital transformation phase.

The sample comprises current and former employees of Daraz Group. The web-based survey
has been used via a self-selection sampling method. Survey questionnaires have been created and
rolled out using an online survey tool named LimeSurvey. In statistical data analysis, self-
selection sampling is a non-probability sampling method in which participants voluntarily sign
up to participate in the research. This approach does not use purposive sampling, which selects
individuals on purpose, or probability sampling, which selects people at random (Self-Selection
Sampling | Lærd Dissertation, n.d.). Participants' affiliation is with Alibaba and Daraz, and the
occupational focus includes their professional tenure in the company to gather data across the
different timelines to compare the results of the pre-and post-digital transformation phase that is
critical to the study.

The samples used in the research are related. In a pre-post study, related samples are those that
are used for both the pre- and post-assessments, enabling researchers to monitor changes over
time within individuals (Theodorsson-Norheim, 1987). Associated samples improve statistical
power, allow for the use of smaller sample sizes, and boost study dependability by acting as their
controls and concentrating on participant changes rather than group differences. Furthermore,
comparable samples in a pre-post study aid in precisely measuring the effects of treatments or
interventions on participants over time, offering insightful information on the effectiveness of

21
initiatives or interventions (Theodorsson-Norheim, 1987).

In total, 203 responses were received from employees across four different countries. Among the
total respondents, 66 responses were received regarding questionnaires designed for the pre-
transformation phase, and 137, responses received were relevant for the questionnaire from the
post-transformation phase. As previously mentioned by the author, the pre-transformation phase
included those employees whose professional tenure was six or more years in this company. On
the contrary, the post-digital transformation phase included those employees whose professional
tenure varied throughout more or less than six years in the company. Furthermore, among the
responses received, 91 were from Bangladesh and, 48 were from Pakistan. Whereas responses
received from employees located in Sri Lanka and Nepal were 36 and 28, respectively.

Table 2 represent the list of subsamples and their volume which were derived from two different
survey questionnaires participants.

Table 2. List of subsamples and their sizes

Categories Subsample Volume
Pre-digital transformation 66
phase
Transformation Phase
Post-digital transformation 137
phase

Source: Subsample based on raw data of survey questionnaire (2024); author’s calculation

The author adopted a personal interaction approach to engage with potential participants
(sample) for the research on Alibaba's digital transformation. Accessing the list of current and
former employees was facilitated through the social networking platform LinkedIn.
Subsequently, the author initiated contact with these individuals via direct messages, outlining
the purpose of the research, the significance of their insights, requesting their participation, and
providing details on how to express interest and participate in the study. The author's prior
experience working within the mentioned organization proved advantageous in capturing the
interest of prospective participants.

22
In the "Background" section, participants were queried about their country of employment and
professional tenure, subsequently utilized for descriptive analysis and configuring conditions
within the survey platform tool. To uphold anonymity, inquiries concerning personal
identification details such as name, email, or personal ID number were omitted, thereby
safeguarding participant identities. Furthermore, background information such as age, gender,
and other sensitive personal data were not solicited, as these variables appeared irrelevant within
the scope of the research context and were deemed ethically unsuitable for inclusion.

Table 3 presents a survey questionnaire to assess organizational aspects pre-Alibaba's digital

transformation at Daraz Group. It covers variables like technology perception, user engagement,
supply chain management, communication, collaboration, and organizational support and
resources, relevant to the TOE framework. This questionnaire aids in understanding Daraz's pre-
digital transformation landscape and analyzing Alibaba's impact within technological,
organizational, and environmental contexts, laying the groundwork for formulating RQs
exploring the organization's evolution post-transformation.

23
Table 3. Survey questionnaire on pre-digital transformation phase
Variables Number Description Relevancy with the
of components of TOE
Questions Framework
Technology 5 Measures tech efficiency, decision- Technology
Perception making, user experience.
User Engagement & 2 Evaluates user satisfaction with External task
Experience engagement tools. environment,
Organization
Supply Chain 2 Assesses supply chain process Organization
Management effectiveness.
Communication and 1 Gauges perceptions of Organization
Collaboration communication tools.
Organizational 1 Evaluates organizational slack Organization
Support and influencing innovation.
Resources

Source: Survey questionnaire on pre-digital transformation phase (2024), Appendix 1; author

Table 4 presents a survey questionnaire assessing various organizational aspects post-Alibaba's

digital transformation at Daraz Group. It covers technology perception, user engagement, supply
chain management, training, communication, collaboration, organizational support, and overall
satisfaction. Each variable is relevant to the Technology-Organization-Environment (TOE)
framework, aiding in understanding the transformation's effectiveness and implications within
Daraz's technological, organizational, and environmental contexts. It serves as a foundation for
crafting RQs that delve into the post-digital transformation state of the organization and its
implications on various organizational dimensions.

24
Table 4. Survey questionnaire on post-digital transformation phase

Variables Number Description Relevancy with the

of components of TOE
Questions Framework
Technology 7 Assesses perceptions of post- Technology,
Perception acquisition digital transformation External task
initiatives, focusing on tech environment
impact on business performance.
User Engagement 2 Evaluates user satisfaction with External task
and Experience engagement tools post- environment,
transformation. Organization
Supply Chain 2 Measures the impact of digital Organization
Management transformation on supply chain
efficiency.
Training and 2 Gauges employee preparedness Organization
Adaptation and adequacy of training for new
digital tools.
Communication 3 Assesses digital platform Organization
and Collaboration effectiveness in facilitating
communication and collaboration
and observed workplace culture
changes.
Organizational 3 Evaluates support and resource Organization
Support and allocation for digital
Resources transformation, including
commitment to employee support.
Overall 2 Measures overall satisfaction with Organization
Satisfaction and the digital transformation journey
Recommendations and likelihood of recommending
similar initiatives to others.

Source: Survey questionnaire on post-digital transformation phase (2024), Appendix 1; author

25
Table 5 features open-ended questions exploring challenges pre-Alibaba acquisition and
successes post-acquisition in utilizing digital technologies at Daraz Group. These questions,
relevant to the TOE framework, provide qualitative insights into technology, organization, and
the external task environment. They enrich the analysis of Alibaba's impact on Daraz's digital
transformation journey, complementing quantitative data and aiding in the formulation of
research questions.

Table 5. Open-ended questions for pre- and post-digital transformation assessment

Variables Number of Description Relevancy with the

Questions components of TOE
Framework
Pre-Digital 1 Explores challenges or obstacles Technology,
Transformation encountered by Daraz Group in Organization,
Phase utilizing digital technologies before External task
the acquisition by Alibaba. environment
Post-Digital 1 Solicits examples of positive Technology,
Transformation experiences or success stories related Organization,
Phase to the strategic utilization of digital External task
technologies after Alibaba's environment
acquisition.

Source: Survey questionnaire on pre- and post-digital transformation phase (2024), Appendix 1;
author

As referred to in the preceding section, two sets of questionnaires were designed to solicit data
from participants regarding their perceptions and observations concerning pre-digital
transformation and post-digital transformation strategies and their implications for the
organization. The author defined that employees with six or more years of tenure within the
organization had likely experienced the pre-transformation phase, whereas those with shorter
tenures were regarded as part of the post-digital transformation journey. Consequently,
individuals who had been employed for over six years encompassed both pre- and post-
transformation periods in their experiences.

26
Recognizing the convenience for participants, the author opted to consolidate the two sets of
questionnaires into a single survey accessible via a shared link, rather than necessitating
engagement in multiple surveys. This consolidation was facilitated through the segmentation of
participants into distinct groups within the survey tool, LimeSurvey, based on specified
conditions related to professional tenure. If a participant indicated six or more years of service at
Daraz Group, both sets of questionnaires about pre- and post-transformation phases were
automatically enabled. On the contrary, respondents indicating shorter tenures were exclusively
presented with questionnaires pertinent to the post-digital transformation phase. Notably,
employees who exclusively experienced the pre-transformation phase only were not included in
the survey invitation.

The duration to complete the survey was 10-12 minutes. A 5-point Likert scale has been used to
answer the questions on a scale of 1 to 5 (1 being strongly disagree, 5 being strongly agree). To
acquire qualitative insights from the participants, each set of questionnaires contained one open-
ended question. The language of the questionnaire was English. The questions were divided into
categories representing different variables and analyzed by averaging the responses. In the case
of unstructured data collection for the variable "Participants Opinion", open-text responses
shared by users are grouped based on their relevance for the thematic analysis and it is presented
in a tabular in the results chapter.

The survey has been made accessible to the participants on the given link.
https://limesurvey.ttu.ee/limesurvey/index.php/338778?lang=en

Once the survey period concluded, the collected data were exported to a data analysis tool, such
as SPSS 29.0.2.0. Processing involved cleaning the dataset, removing incomplete or irrelevant
responses, and calculating averages for questions where applicable. The refined data was then
subjected to further analysis to derive meaningful insights into the effectiveness and implications
of Alibaba's digital transformation initiatives on Daraz Group.

2.5.1. Descriptive analysis

Descriptive analysis is an essential aspect of statistical data analysis that includes various
methods such as measurements of frequency, central tendency, dispersion, and position. It assists

27
in comprehending the distribution of data, identifying errors and outliers, and exposing
correlations between variables (Loeb et al., 2017). In the current study, descriptive statistics
provided an overview of the central tendencies and distributions of key variables, enabling a
comprehensive understanding of the data before diving into more advanced analyses.

The following tables outline participant demographics based on location and professional tenure.
Table 6 depicts the distribution across Bangladesh, Nepal, Pakistan, and Sri Lanka and presents
tenure across two different transformation phases. They provide essential context for
understanding the diversity within the survey sample, aiding interpretation of results and
conclusions drawn for different employee cohorts.

Table 6: Descriptive statistics on survey participants based on employee location

Subsample
Pre-digital transformation phase Post-digital transformation phase
Professional Mean = Frequen MIN= MAX Mean = Frequen MIN = MAX
Tenure 6.59 cy = 66 6 =8 4.48 cy = 137 1 =8
Sri Sri
Location Bangladesh Pakistan Lanka Nepal Bangladesh Pakistan Lanka Nepal
= 39 = 13 =8 =6 = 52 = 35 = 28 = 22

Source: Descriptive statistics on survey participants (2024); author’s calculation

Notes: Location outlines frequency across different countries among two subsamples.

2.5.2. Independent samples t-test

The independent samples t-test is a statistical method to compare the means of two groups. It
serves to determine whether the means of two groups, which may originate from the same
population or distinct populations, show a statistically significant difference (Ross & Willson,
2017). This research used the aforementioned statistical analysis method to assess variables such
as technology perception, user engagement & experience, supply chain management,
communication and collaboration, and organizational support and resources, which were tested
throughout two different sets of questionnaires. Although there were some overlapping
participants, the majority of participants were those who only participated in post-transformation
questionnaires. Hence, the author has used an independent sample t-test to avoid dilution of
statistical results. It allowed to compare the responses before and after the digital transformation

28
phase while treating participants who only responded after the transformation as a separate
group. It also helped to provide a straightforward analysis to assess the impact of the
transformation on the variable of interest. Furthermore, the variance homogeneity was assessed
using Levene's F test, with p<0.05 regarded as statistically significant.

2.5.3. Statistical significance tests (P value)

Statistical significance tests, often indicated by p-values, are used to determine the likelihood
that observed differences or associations in data are due to random chance rather than true effects
or relationships (Shaver, 1993). In this research on comparing perceptions before and after digital
transformation, statistical significance tests, indicated by p-values, were crucial for assessing the
significance of observed differences. By comparing p-values to a predetermined significance
level (e.g., α = 0.05), the author aimed to determine whether the observed changes in perceptions
between the pre-transformation and post-transformation phases are statistically significant. It
helped validate the impact of digital transformation on various aspects of Alibaba's e-commerce
ecosystem.

2.5.4. Pearson’s correlation

The Pearson correlation coefficient, commonly symbolized as r, is a statistical metric utilized to

evaluate the magnitude and direction of the linear association between two continuous variables.
It measures the level of correlation between two variables, with scores between -1 and +1. A
correlation coefficient of +1 signifies a flawless positive linear relationship, whereas a
coefficient of -1 signifies a flawless negative linear relationship. A coefficient of 0 indicates that
there is no linear correlation between the variables (Sedgwick, 2012).

Table 7: Strength of correlation coefficient

Correlation Coefficient Value

Correlation Strength
(r)
0.70-1.00 Very strong
0.50-0.69 Strong
0.30-0.49 Moderate
0.10-0.29 Weak
0.01-0.09 Very Weak

29
Source: Strength of correlation coefficient (Davis, 1971).

Pearson's correlation is commonly utilized in research to investigate connections between

variables, recognize patterns, and evaluate the influence of one variable on another. It comes in
handy when analyzing survey data or studying the connection between various aspects of a
phenomenon. Evaluating Pearson's correlation coefficient requires an examination of its size and
direction. A stronger relationship is indicated by a larger absolute value, with the sign showing if
it is positive for direct relationships or negative for inverse relationships (Turney, 2022).

Pearson's correlation coefficient was used in the study to investigate connections between
different variables concerning Alibaba's digital transformation strategies in e-commerce, offering
insights into the dataset's interrelations and dynamics.

The formula for calculating Pearson's correlation coefficient (r) between two variables X and Y
is as follows (BYJUS, n.d.):

Where:
• n is the number of data points.
• X and Y are the two variables.
• ∑ denotes the sum of the indicated terms across all data points.
• ∑XY is the sum of the product of each pair of corresponding values of variables X and Y.
• ∑X and ∑Y are the sums of all values of variables X and Y, respectively.
• ∑X2 and ∑Y2 are the sums of the squares of all values of variables X and Y, respectively.

2.6. Customer feedback analysis with NLP

The customer feedback data obtained from the Google Play Store is in a semi-structured format,
consisting of user-generated comments regarding the Daraz app. These comments are textual,
containing information about users' experiences, preferences, and criticisms.

30
To enable computers and other digital devices to identify, comprehend, and produce text and
speech, natural language processing, or NLP, combines statistical and machine learning models
with computational languages is a rule-based modeling of human language (IBM, n.d.). Since
there are so many ambiguities in human language, it can be extremely challenging to create
software that reliably interprets text or audio input to represent the intended meaning. Various
NLP activities, such as speech recognition, speech tagging, sentiment analysis etc., deconstruct
human text and speech input so the machine can understand what it is consuming
(Gruetzemacher, 2022).

The Natural language Processing (NLP) analysis results involve categorizing the customer
feedback into different thematic categories using predefined keywords. This process resulted in
structured data where each feedback entry is assigned a category based on its content.
Subsequently, the results were stored in an Excel spreadsheet for further analysis.

Furthermore, sentiment analysis is a method that divides opinions into positive, negative, and
neutral sentiments by extracting, converting, and interpreting opinions from texts using Natural
Language Processing (NLP) (Fang & Zhan, 2015). It can be categorized into three levels such as
feature, document, and sentence levels. There are two primary approaches to sentiment analysis.
While the lexicon-based technique counts the positive and negative words that are associated to
the data, the machine learning approach uses algorithms to extract and detect sentiment from
data (Drus & Khalid, 2019).

Additionally, numerical ratings associated with each customer comment provided quantitative
information about the sentiment expressed in the feedback. These ratings, ranging from 1 to 5
stars, are included as a separate column in the Excel spreadsheet, allowing for easy reference and
analysis alongside the corresponding feedback.

The sample for gathering customer feedback comprises individuals who have interacted with the
Daraz app on the Play Store platform. The sample is not predefined but rather consists of
customers who have voluntarily provided feedback on the app. Participants in this sample are
users of the Daraz app, including both current and former customers who have engaged with the
platform. Their feedback was collected through the Play Store reviews section, where users can
leave comments and ratings based on their experiences with the app. The occupational focus of

31
the participants is not relevant in this context, as the sample is based on users' interactions with
the app rather than their professional affiliation. each feedback entry stands independently,
representing an individual user's experience and opinion regarding the Daraz app. The focus was
on gathering a broad range of opinions and experiences to understand overall user sentiment and
identify areas for improvement in the app's functionality and user experience.

The sample for gathering customer feedback has been segmented into distinct time periods to
facilitate a comprehensive analysis of user sentiments and preferences across different phases of
the Daraz app's evolution post-acquisition by Alibaba in 2018. Due to the absence of feedback
from the pre-digital transformation phase, the samples are not related in the same sense as in a
pre-post study.

Instead, the author has developed a time series approach to analyze customer feedback over time.
The data has been segmented into multiple categories based on specific timeframes:

- Feedback collected from 2018 to 2019 has been considered as the acquisition phase.
- Feedback gathered from 2020 to 2021 represented the early implementation phase.
- Feedback from 2022 to 2023 has been categorized as the optimization phase.
- Feedback from 2024 has been labeled as the stabilization phase.

This segmentation allows for a nuanced understanding of customer feedback and preferences at
various stages of the app's development and improvement. Each phase offers unique insights into
user experiences, enabling the identification of trends, patterns, and areas for enhancement over
time.

The author developed a code for data retrieval to collect a minimum of 2,000 individual
customer comments for each mentioned phase. However, certain inherent limitations were
encountered. For instance, there was limited availability of significant volumes of data in the
early years. Additionally, as the thesis was being drafted, the year, 2024, had only completed its
first few months. Consequently, the total number of unique comments collected amounted to
5,381.

The following table presents subsamples of customer feedback analyzed through Natural
Language Processing (NLP) across different phases of the digital transformation journey. It

32
outlines different phases, each representing a specific timeframe. The table indicates the volume
of customer comments collected for each phase, offering insights into the evolution of feedback
volume over time. It serves to illustrate trends and patterns in customer sentiment and
engagement throughout the transformation process.

Table 8. Subsamples of customers’ feedback analysis using NLP

Timeframes Subsample Volume
Acquisition Phase Year 2018-2019 591
Early Implementation Phase Year 2020-2021 1902
Optimization Phase Year 2022-2023 2333
Stabilization Phase Year 2024 555

Source: Subsample based on raw data of customer’s feedback analysis (2024); author’s
calculation
In gathering customer feedback for the Daraz app, no direct contact was made with individual
customers. Instead, the data was collected passively from publicly available sources on Google
Play. Play Store is a public platform that is operated and developed as a digital distribution
service by Google where users can leave reviews and ratings for mobile applications, including
the Daraz app.

Customer
feedback is Feedback is
retrieved from NLP techniques Numerical star processed and
the Play Store are applied to ratings are
using a Python categorize the used to gauge organized into a
library feedback into the sentiment structured
different of each format for
themes comment
further analysis

Thematic and Sentiment

Data Retrieval Data Processing
Analysis

Figure 2. Customers’ feedback analysis using NLP

33
Source: Author (2024); based on Appendix 2

Data extraction from websites is known as "web scraping" and it is legal as long as the content is
accessible to the general public and not protected by password-protected authentication systems
(Mitchell, 2018). Using ethical web scraping technologies, adhering to the target website's
policies, and being aware of the kind of data being taken to make sure it is utilized responsibly
and not maliciously are all part of ethical web scraping (Lambertus & Williamson, 2023).

Automated web scraping techniques were employed to extract customer reviews and associated
metadata from the Google Play Store. The author drafted a script using Python programming
language that utilized the google_play_scraper library to retrieve reviews in bulk, without the
need for direct interaction with users. It provided APIs that enabled the script to crawl the
Google Play Store for reviews and associated metadata. These APIs facilitate the retrieval of the
publicly available reviews section of the Daraz app's Play Store page and extract the relevant
information, such as user comments and star ratings in a structured format, streamlining the data
collection process.

Throughout the data collection process, strict adherence to data privacy regulations and
guidelines was maintained to ensure the protection of users' personal information and uphold
ethical standards. Users have the option to provide feedback anonymously on the Play Store,
without disclosing personal information. However, many users voluntarily shared their personal
information such as name, and photo on the platform too. Hence, commenters’ personally
identifiable information such as review ID, username, image, etc. was discarded. Consequently,
the collected data was anonymized and did not contain any identifiable information about
individual users.

By collecting data from a public platform without directly contacting customers, the study
ensured a non-intrusive approach to gathering customer feedback while still obtaining valuable
insights into user experiences with the Daraz app.

34
2.6.1. Thematic analysis

The data analysis process involved conducting a thematic analysis of the customer feedback
collected from the Google Play Store for the Daraz app. Thematic analysis is a qualitative
method used to identify patterns, themes, and meanings within textual data (BYJUS, n.d.).

At first, the collected feedback data, stored in an Excel file format, was read into a Python
environment using the pandas library. The author applied thematic coding to categorize the
customer feedback into different thematic categories. This was achieved by defining a set of
keywords and categories representing common themes within the feedback. The keywords and
their assigned thematic categories are illustrated in Table 9 as follows.

Table 9. Keywords for Thematic Categories

Thematic Categories Keywords
User experience UI, Experience, Interface, Notification,
Search, Compare, Bug
App management App, Update, Version, Install, Platform,
Improve
Performance and promotions Performance, Icon, Content, Feature,
Discount

Source: Thematic categories based on raw data of customer’s feedback analysis (2024); author’s
calculation
Notes: Comments which did not contain any of the predefined keyword were categorized as
“Irrelevant”.

The categorization process involved iterating through each feedback entry and comparing it
against predefined keywords associated with different thematic categories. If a keyword was
found within the feedback text, the entry was assigned to the corresponding thematic category.
Once categorized, the feedback data was updated with a new column indicating the thematic
category assigned to each entry. The modified data, now enriched with thematic categorization,
was saved back to a new Excel file for further analysis and interpretation.

35
The thematic analysis provided valuable insights into the predominant themes and topics within
the customer feedback for the app. By categorizing feedback into thematic categories, patterns,
and trends in user experiences, preferences, and criticisms were identified. These insights can
inform decision-making processes aimed at enhancing the app's functionality, user interface, and
overall user satisfaction.

Since the collected data already had assigned numerical ratings (1 to 5) to each review, further
sentiment analysis was not necessary to capture the sentiment expressed in the feedback. Here 1
star review represents the worst rating, whereas 5 stars represent the best rating. To avoid
diluting the trend of customers' opinions, the author did not retrieve any comments with a 3-star
rating that represented a "neutral" opinion. However, quantitative analysis, such as descriptive
statistics and time-series analysis, have been performed on the collected data to derive insights
and trends.

2.7. Historical documents and reports

The author has additionally employed a research method centered on historical documents and
reports to investigate how Alibaba strategically leverages digital technologies, including AI, big
data, and cloud computing, to enhance overall business performance within its e-commerce
ecosystem.

The immediate sources of data comprised various historical documents and reports sourced from
Alibaba, particularly:
- Annual Reports: These documents offer a comprehensive overview of Alibaba's financial
performance, strategic initiatives, and technology investments over time.
- Management's Discussion and Analysis (MD&A) Sections: Within annual reports, MD&A
sections provide qualitative insights into Alibaba's strategic direction and the role of digital
technologies in driving business growth.
- Financial Statements: These statements provide quantitative data on Alibaba's financial
performance, including revenue, profits, and investments in technology.
- Technology and Innovation Sections: Some reports feature dedicated sections discussing
Alibaba's technology investments, innovations, and their implications for business operations.

36
The collected data were predominantly available in textual, tabular, and graphical formats.

The data collection procedure involved systematically accessing and extracting relevant
historical documents and reports from Alibaba's Investor Relations website. Data verification
ensured accuracy and integrity, while organized storage procedures maintain accessibility and
traceability throughout the research process. This methodological rigor enabled the author to
comprehensively analyze Alibaba's strategic utilization of digital technologies within its e-
commerce ecosystem and derive meaningful insights into its impact on overall business
performance.

2.7.1. Trend analysis

Financial performance is a subjective measure of how well a firm can use assets from its primary
mode of operations and generate revenues. Investors are able to determine general corporate
health from the financial performance. It's a brief glance at the state of its finances and the
performance of its management. Its indicators are quantifiable metrics used to assess a
company's success. However, clustered measures in contrast of single estimates, should be used
to evaluate a company's financial success (BPP Learning Media, 2016).

This study employed trend analysis to examine the broader business segment which includes
Daraz Group and similar subsidiaries under Alibaba's umbrella. Trend analysis allowed to
examine patterns and shifts over time in key metrics such as revenue growth, profitability, and
technology spending. By tracing these trends across multiple reporting periods, the report
attempted to provide insights into the evolution of Alibaba's technology-driven initiatives within
its e-commerce ecosystem, which is often referred to as international commerce retail by the
company. This approach enabled assessing the effectiveness of digital technologies, including
AI, big data, and cloud computing, in optimizing overall business performance. Through trend
analysis, this research paper aimed to uncover how Alibaba's technology investments align with
its strategic objectives and contribute to sustainable growth and competitiveness in the e-
commerce market.

37
3. RESULTS

3.1. Independent samples t-test and descriptive statistics

Table 10. Analyzing the results of pre- and post-digital transformation phase questionnaires using
independent samples t-test

Relevancy Subsample t-value P value

with the Pre-digital Post-digital (two-
Variables components transformation transformation sided p)
of TOE phase (mean) phase (mean)
framework
Technology Technology 4.5727 4.2878 -5.848 <.001
Perception
User External task 1.4394 4.5882 51.855 <.001
Engagement & environment,
Experience Organization
Supply Chain Organization 1.4242 4.5699 43.384 <.001
Management
Communication Organization 1.9167 4.3726 31.159 <.001
and
Collaboration
Organizational Organization 2.1364 3.7624 15.675 <.001
Support and
Resources

Source: The results of independent samples t-test (equal variances not assumed) (2024); author’s
calculations based on Appendix 1

Technology perception: While the mean difference (-0.28493) indicates a decrease in technology
perception scores from the pre-transformation to the post-transformation phase, the interpretation

38
of the results needs to consider the different directionalities of the Likert scale questions in each
phase.

The Likert scale questions on pre- transformation phase were focused on identifying aspects that
needed improvement at Daraz Group before its acquisition by Alibaba. A higher score on the
Likert scale indicated that respondents perceived more room for improvement. Therefore, a
decrease in scores from this phase to the post-transformation phase suggests that respondents
perceived fewer areas requiring improvement after the digital transformation.

User engagement and experience: The results suggest that there is a statistically significant
difference in user engagement and experience between the pre- and post-digital transformation
phases. The substantial mean difference (3.14884) and the associated statistical significance
indicate that user engagement and experience significantly improved after the digital
transformation.

Supply chain management: The results indicate that there is a statistically significant difference
in perceptions of supply chain management between the pre-digital transformation and post-
digital transformation phases. The substantial mean difference (3.14561) and the associated
statistical significance suggest that employees’ perceptions of supply chain management were
significantly improved after the digital transformation.

Communication and collaboration: The findings reveal a significant difference in perceptions of

communication and collaboration between the pre- and post-digital transformation phases. The
notable difference in mean scores (2.45591), coupled with the statistical significance,
underscores a marked enhancement in communication and collaboration following the digital
transformation.

Organizational support and resources: The analysis reveals a significant contrast in perceptions
of organizational support and resources before and after the digital transformation. The
considerable difference in mean scores (1.62606), along with the statistical significance, implies
a substantial improvement in perceptions of organizational support and resources following the
digital transformation.

39
The questionnaires related to the following variables were only asked to participants of the post-
digital transformation phase. Thus, the author did not perform any comparative analysis such as
t-test or Chi-square test of independence, instead opted for using descriptive statistics. Table 11
represents the results of descriptive statistics of uniquely assessed variables in post-digital
transformation phase.

Table 11: Descriptive statistics of uniquely assessed variables

Variables Relevancy Mean Median Mode Standard Skewness
with the Deviation
components
of TOE
framework
Training and Organization 3.8051 4.0000 4.00 .86103 -.084
Adaption
Overall Organization 4.5919 4.5000 5.00 .42252 -.735
Satisfaction and
Recommendations

Source: Descriptive statistics of training & adaption and overall satisfaction & recommendations
variables (2024); author’s calculation based on Appendix 1

The mean represents the average value of the responses. Higher mean values suggest that
respondents, on average, perceive higher levels of training and adaption and expressed higher
levels of satisfaction regarding digital transformation strategies implemented by the organization.
The median is the middle value in the dataset. The data outlined in Table 11 indicates that at least
50% of the respondents rated the training and recommendation levels at or above these values.

The mode values additionally represent the most common ratings given by respondents for
training and recommendations, respectively. The standard deviation measures the dispersion or
variability of the responses around the mean. For the "Training and Adaption" variable, the
standard deviation of 0.86103 indicates a moderate amount of variability in the responses. On the

40
other hand, the "Overall satisfaction and recommendations" variable represents a standard
deviation of 0.42252, suggesting less variability in the responses compared to the other variable.

Skewness measures the asymmetry of the distribution of responses. For the "Training and
adaption" variable, the skewness is -0.084, indicating a slightly left-skewed distribution. For the
"Overall satisfaction and recommendations" variable, the skewness is -0.735, suggesting a more
pronounced left-skewed distribution.

Based on these interpretations, it seems that respondents generally rated the "Overall satisfaction
and recommendations" variable higher compared to the "Training and adaption" category, as
evidenced by the higher mean, median, mode, and lower standard deviation and skewness in the
"Overall satisfaction and recommendations" variable. Overall, these results suggest that
respondents have a relatively positive perception of both training and recommendations, with
slightly higher ratings for satisfaction and recommendations.

3.2. Pearson’s correlation

The statistical analysis reveals key factors that influence the following variables in the pre- and
post-digital transformation phase. The correlation matrix was coded as follows for easier
representation.

• SP = Strategic Phase**
• LO = Location
• WE = Work Experience
• TP = Technology Perception
• UE = User Engagement & Experience
• SC = Supply Chain
• CC = Communication & Collaboration
• SR = Support & Resources
• TA = Training & Adaption
• RC = Recommendations

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** The variable strategic phase represents the different timelines of the pre- and post-digital
transformation phase.

Table 12: Correlation matrix

SP LO WE TP UE SC CC SR TA RC
SP 1
LO 0.19* 1
WE -0.47* -0.33* 1
TP -0.37* -0.19* 0.38* 1
UE 0.96* 0.21* -0.50* -0.37* 1
SC 0.95* 0.20* -0.50* -0.36* 0.98* 1
CC 0.91* 0.25* -0.53* -0.40* 0.94* 0.92* 1
SR 0.76* 0.27* -0.58* -0.37* 0.81* 0.79* 0.90* 1
TA 0.93* 0.26* -0.57* -0.40* 0.93* 0.92* 0.94* 0.86* 1
RC 0.99* 0.22* -0.50* -0.38* 0.97* 0.96* 0.93* 0.80* 0.95* 1

Source: The results of Pearson’s correlation (2024); author’s calculations based on Appendix 1
Notes: Correlation is significant at the 0.01 level (2-tailed). *

Strategic Phase (SP): Positive correlation with all variables indicates that as the strategic phase
progresses (moving from pre- to post-digital transformation), there is a tendency for scores on all
other variables to increase. This suggests that as time progresses and the digital transformation
unfolds, there are overall positive changes across various aspects measured by the questionnaire.

Location (LO): Positive correlations with most variables suggest that employees' location has a
modest positive relationship with other aspects measured. However, these correlations are
relatively weak, indicating that location may not strongly influence perceptions or experiences
related to digital transformation.

Work Experience (WE): Negative correlations with most variables suggest that employees with
more years of work experience tend to have slightly lower scores on various aspects measured.
This might indicate that employees with more experience might be more critical or have different
perspectives on digital transformation compared to those with fewer years of experience.

Technology Perception (TP): Negative correlations with other variables suggest that as
perceptions of technology-related challenges or obstacles decrease (indicating fewer perceived
issues), other aspects measured tend to have higher scores. This implies that improvements in

42
technology perception are associated with positive changes in other areas.

User Engagement & Experience (UE), Supply Chain (SC), Communication & Collaboration
(CC), Support & Resources (SR), Training & Adaption (TA), Recommendations (RC): Positive
correlations among these variables suggest that as scores on one variable increase, scores on
others also tend to increase. This indicates that positive experiences or perceptions in one aspect
of digital transformation are often associated with positive experiences or perceptions in other
aspects as well.

Overall, the correlation coefficient results suggest interrelationships among different aspects of
digital transformation, with improvements in one area often coinciding with improvements in
others, while certain factors like work experience may influence perceptions differently.

3.3. Qualitative analysis of digital transformation impacts using the TOE

framework

For two open-ended questions, among the 203 participants, only 13 answers were received. The
author analyzed the answers and presented the underlying essence of each answer in a structured
form in Table 13 as given below. The qualitative analysis reveals a noteworthy enhancement in
performance after the implementation of post-digital transformation initiatives.

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Table 13: Topic mapping of open-ended questions

Relevancy with the Pre-digital transformation Post-digital transformation

components of TOE phase (challenges or phase (positive experience or
framework obstacles) (Number of success stories) (Number of
instances) instances)
Challenges in technology Adoption of advanced
implementation and technology solutions leading to
Technology optimization, hindering streamlined operations and
operational efficiency (6 enhanced customer experience
instances). (6 instances).
Resource constraints and lack Transformation towards data-
of strategic vision inhibiting driven decision-making,
digital transformation efforts resulting in improved
Organization
(3 instances) operational efficiency and
customer-centricity (7
instances).
Difficulties in adapting to Enhanced service efficiency and
digital market demands and customer satisfaction through
External task
optimizing logistics (2 digital enhancements and
environment
instances). expanded service offerings (3
instances).

Source: Qualitative analysis of open-ended questions answered by pre-and post-digital

transformation phase questionnaires participants (2024); author’s analysis based on Appendix 4

Several significant advances highlight this growth. Firstly, emerging technology adoption has
improved transactional efficiency by enabling faster and more secure payment operations.
Moreover, real-time data analytics and simplified operational management have been made
possible by the deployment of cutting-edge platforms and systems, which have increased
organizational agility and responsiveness. Furthermore, the implementation of dynamic delivery
methods and prudent strategies has enhanced logistical procedures, hence augmenting
operational efficiency. Additionally, the focus on customized experiences and the expansion of

44
service offerings have improved consumer satisfaction and service effectiveness, enhancing the
performance of the entire organization. Collectively, these qualitative insights signify a
comprehensive boost across various facets of the TOE framework as technology utilization,
organizational capabilities, and adaptation to the external task environment within Daraz Group
following the post-digital transformation strategies implementation by Alibaba.

3.4. Thematic sentiment analysis of customers’ reviews

From the author's perspective, the thematic sentiment analysis offers valuable insights into how
users perceive and experience the Daraz app across different phases of Alibaba's post-digital
transformation strategies. In this analysis, the author examined the user sentiment and
experiences across four key stages of post-digital transformation following Alibaba's acquisition
of Daraz. Each stage represents a distinct phase in the evolution of the Daraz app, reflecting
different milestones and objectives in the digital transformation journey. For this, summary
statistics have been composed (Appendix 2) and interpreted as follows:

Acquisition phase (Year 2018-2019): During the Acquisition Phase, users encountered challenges
with the Daraz app's User Experience, indicated by a mean rating of 2.90, and App Management,
with a mean rating of 2.84. Additionally, Performance & Promotions received the lowest rating
of 2.44, suggesting user dissatisfaction with the app's performance and promotional activities.

Early implementation phase (Year 2020-2021): During the Early Implementation Phase,
significant improvements were observed in User Experience, with a mean rating of 3.62, and
App Management, with a mean rating of 3.64. Additionally, Performance & Promotions
maintained a high rating of 3.59, indicating effective implementation of promotional activities
and enhancements in app performance.

Optimization phase (Year 2022-2023): During the Optimization Phase, User Experience saw a
slight decrease with a mean rating of 2.99, suggesting ongoing challenges despite initial
improvements. However, App Management improved with a mean rating of 3.20, indicating
continued efforts to enhance management processes. Performance & Promotions saw a slight
decrease to 2.78, possibly indicating challenges in maintaining promotional activities and app
performance during this phase.

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Stabilization phase (Year 2024): In the Stabilization Phase, User Experience significantly
decreased to a mean rating of 2.18, indicating significant user dissatisfaction. App Management
remained stable at a mean rating of 2.94, suggesting adequate maintenance of management
processes. However, Performance & Promotions saw a substantial decrease to 1.57, indicating
significant challenges with app performance and promotional activities during this phase.

Figure 3: Mean of customers’ review ratings about app

Source: Created by the author (2024), based on Appendix 2

The thematic sentiment analysis conducted on customer feedback across different phases of post-
digital transformation strategies implemented by Alibaba provides valuable insights into the
evolving user perceptions and experiences with the Daraz app. Overall, there were observable

46
improvements in thematic categories such as User Experience, App Management, and
Performance & Promotions during the Acquisition and Early Implementation Phases. These
enhancements likely reflect the initial efforts to refine the app's functionality, interface, and
overall performance following the implementation of digital transformation initiatives.

However, caution must be exercised when interpreting the findings for the Stabilization Phase
due to the limited data availability, as the thesis drafting period coincided with the initial months
of 2024. Despite this limitation, the decline in ratings for User Experience and Performance &
Promotions during this phase raises concerns about potential challenges or issues encountered by
users.

It's noteworthy that comments marked as "Irrelevant" under thematic categories were excluded
from the analysis, ensuring a more focused examination of relevant user feedback. Additionally,
as the business matures, regular customers may be less inclined to leave comments on the Play
Store, potentially biasing the results towards those with adverse impressions. This phenomenon
could dilute the overall perception of improvement over time.

In conclusion, while there were observable improvements in certain thematic categories over
time, further research beyond the thesis drafting period and additional data collection efforts are
warranted to validate the findings comprehensively. The thematic sentiment analysis underscores
the ongoing importance of monitoring, optimizing, and adapting digital transformation strategies
to address user feedback and ensure a positive user experience throughout all phases of
implementation.

3.5. Trend analysis on business performance

The financial data retrieved from the published annual report of Alibaba demonstrate the revenue
growth of its International Commerce Retail segment over five years, along with its percentage
contribution to the total revenue of the company.
- From 2019 to 2023, there is a consistent increase in the revenue of International Commerce
Retail, indicating a positive growth trend over time.

47
- The revenue has more than doubled from 2019 to 2023, demonstrating significant expansion in
this segment.
- Despite the revenue growth, the percentage of total revenue attributed to International
Commerce Retail remains relatively stable, ranging from 5% to 6% throughout the period.

Figure 4: Revenue growth of Alibaba’s international commerce retail segment

Source: Visualized by the author (2024), based on Appendix 3

Over the past five years, Alibaba has made significant technological investments and
advancements that have affected its operations. Among them are:

48
AI breakthrough: Advances in generative Artificial Intelligence (AI) were achieved by Alibaba
Cloud, which unveiled Tongyi Qianwen, an AI model that can do sophisticated tasks like
reasoning and copywriting. Alibaba Cloud was being used by half of China's major model
enterprises and 80% of the country's tech companies by October (Yong, 2022).

Logistics advancements: Alibaba's logistics service, Cainiao Smart Logistics Network, submitted
for an IPO in Hong Kong, increased cross-border delivery, and now provides first-rate 5-day
delivery services in several nations and areas (Alibaba Group, 2023b)

Technology innovations: Alibaba is a pioneer in technology, with a robust computing network,

vast data usage for efficiency and customization, and the creation of AI technologies like deep
learning and machine learning for rapid product launches (Staff, 2017).

New retail solution: Alibaba is trying to integrate online and offline shopping by using
technologies such as distributed voice recognition and digital shelf price tags for various
industries, including manufacturing, entertainment, and home automation (Liao, 2024).

In 2023, Alibaba continues to persist in granting investments in technology the highest priority to
stimulate growth and innovation. Alibaba Cloud made a major investment of $1 billion to
improve its global partner ecosystem, provide innovative products to promote enterprise
technology innovation and offer comprehensive client services for digitalization journeys (Yong,
2022).

MiniMax, a new artificial intelligence firm, was added to Alibaba's investment portfolio,
indicating the company's active involvement in the field. Alibaba's investment in MiniMax
demonstrates the company's continued interest in cutting-edge technologies and is part of a
strategy to raise bets on future leaders in China's AI sector (Dong, 2024).

In conducting the financial performance analysis, it's essential to acknowledge several potential
limitations. While the financial results are audited and the author has discussed several
technology investment decisions made by the company, attributing all growth solely to digital
transformation strategies may not be entirely accurate. Various factors beyond digital initiatives,
such as market conditions, competitive landscape, and strategic decisions, could contribute to
revenue growth and performance metrics. Additionally, without comparative benchmarks with

49
industry peers, contextualizing Alibaba's performance becomes challenging. Furthermore,
relying solely on historical data may limit the analysis's ability to offer forward-looking insights
or predictive forecasts.

The financial analysis encountered limitations in accessing isolated financial data from Daraz
alone, the primary subsidiary under investigation. Due to constraints in data availability and
reporting structures, it was impractical to segregate Daraz's financial performance from the
broader financial results of Alibaba's International Commerce Retail segment, comprising
multiple subsidiaries. Consequently, the analysis incorporates the performance of the entire
segment rather than solely focusing on Daraz. Notably, Alibaba implements uniform technology
and digital transformation strategies across its entire International Commerce Retail segment,
including Daraz, underscoring the rationale for analyzing the segment's overall financial results.
This approach enables a more comprehensive evaluation of the impact of digital transformation
initiatives across the segment's operations. By recognizing these limitations, the analysis
maintains a balanced perspective and opens avenues for further investigation into the nuanced
relationship between digital initiatives and business outcomes.

3.6. Empirical findings on research questions

3.6.1. Empirical findings on main research question

The empirical analysis aimed to investigate how the acquisition of Daraz Group by Alibaba and
the strategic utilization of digital technologies influenced the evolution of its overall business
performance over time.

The author demonstrated results generated through an independent sample t-test (presented
through Table 10) on the following variables for both pre- and post-digital transformation phase,
to assess the evidence against the main research question.

Technology Perception: The assessment of technology perception aims to evaluate the

technology component of the TOE framework. The statistical significance of the results indicates

50
that the observed difference in mean scores between the pre-transformation and post-
transformation phases is unlikely to have occurred by chance. The results of the independent
samples t-test indicate a significant decrease in technology perception scores from the pre- to
post-digital transformation phase. This suggests that respondents perceived fewer areas requiring
improvement after the digital transformation, indicating a positive impact on technology
perception within the organization.

User Engagement & Experience: The assessment of user engagement and experience perception
evaluates components such as the external task environment and organization from the TOE
framework. The analysis reveals a substantial improvement in user engagement and experience
between the pre- and post-digital transformation phases. This signifies that the digital
transformation initiatives had a positive impact on user engagement and experience within the
organization, aligning with the strategic objectives.

Supply Chain Management: The assessment of impact on supply chain management perception
evaluates the organization component of TOE framework. There is a significant improvement in
perceptions of supply chain management following the digital transformation. This highlights the
transformative impact of digital initiatives on supply chain management within the organization,
contributing to operational efficiency.

Communication and Collaboration: This segment aims to gauge the employees’ perceptions of
communication and collaboration that are categorized under the organization component of the
TOE framework. Results show a marked enhancement in communication and collaboration
following the digital transformation. This indicates the effectiveness of digital initiatives in
fostering improved communication dynamics and collaboration within the organization.

Organizational Support and Resources: This section aims to evaluate the results generated by
independent samples t-test under the organization component of the TOE framework. The
analysis reveals a substantial improvement in perceptions of organizational support and
resources after the digital transformation. This suggests that digital transformation initiatives
positively impacted resource allocation and organizational support within the organization.

Additionally, the correlation coefficient results suggest interrelationships among different aspects
of digital transformation, with improvements in one area often coinciding with improvements in

51
others, while certain factors like work experience may influence perceptions differently.

The empirical analysis indicates a positive impact of Alibaba's acquisition of Daraz Group and
its digital transformation efforts on overall business performance. Significant improvements
were observed across key variables such as technology perception, user engagement, supply
chain management, communication, and organizational support. These findings affirm the
transformative influence of digital technologies, supporting the main research question regarding
the evolution of business performance post-acquisition.

3.6.2. Empirical findings on sub research question 1

Sub-RQ1 investigates the impact of digital transformation on customer engagement and supply
chain management within Daraz Group's e-commerce operations. The empirical findings from
Pearson’s correlation analysis and thematic sentiment analysis of customer reviews shed light on
this aspect.

Pearson’s correlation analysis: The analysis indicates positive correlations between various
variables, including user engagement & experience, supply chain management, communication
& collaboration, and support & resources. These positive correlations suggest that improvements
in one aspect of digital transformation tend to coincide with enhancements in others.
Specifically, as the strategic phase progresses from pre- to post-digital transformation, there is a
notable increase in scores across all variables. Additionally, negative correlations with
technology perception imply that as perceptions of technology-related challenges decrease, other
aspects measured tend to have higher scores.

Thematic sentiment analysis of customer reviews: The thematic sentiment analysis provides
insights into users' perceptions and experiences with the Daraz app across different phases of
post-digital transformation. During the Acquisition and Early Implementation Phases, significant
improvements were observed in user experience, app management, and performance &
promotions. However, challenges emerged during the Optimization and Stabilization Phases,
particularly regarding user experience and performance & promotions.

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Overall, the empirical findings suggest that digital transformation initiatives have a significant
impact on customer engagement and supply chain management within Daraz Group. Positive
correlations among various variables and improvements observed in thematic categories indicate
a comprehensive influence on different facets of the organization's operations. However, ongoing
monitoring, optimization, and adaptation of digital transformation strategies are essential to
address challenges and ensure a positive user experience throughout all phases of
implementation.

While challenges emerged in later phases, the overall trend suggests a positive impact of digital
transformation on customer engagement and supply chain management. Therefore, the evidence
suggests that Sub-RQ1 was positive, indicating the beneficial effects of digital transformation
initiatives on these key components of Daraz Group's operations.

3.6.3. Empirical findings on sub research question 2

Sub-RQ2 sought to draw lessons from Daraz Group's experiences within Alibaba's ecosystem for
other companies navigating the digital era in the e-commerce sector.

The qualitative analysis, structured within the TOE (Technological, Organizational, and
External) framework, provides valuable insights into the lessons learned:

Technology: Daraz Group's experience underscores the importance of adopting advanced

technology solutions to streamline operations and enhance customer experiences. The successful
implementation of technology initiatives facilitated operational efficiency and improved user
engagement.

Organization: The transformation towards data-driven decision-making was a key organizational

lesson. By leveraging data analytics and insights, Daraz Group was able to enhance operational
efficiency and prioritize customer-centricity. Moreover, overcoming resource constraints and
fostering a strategic vision were critical organizational shifts necessary for successful digital
transformation.

53
External Task Environment: Adapting to digital market demands and optimizing logistics
emerged as significant lessons. Daraz Group's experience highlights the importance of enhancing
service efficiency and customer satisfaction through digital enhancements and expanded service
offerings.

These lessons offer valuable guidance for other companies navigating the e-commerce sector in
the digital era. Embracing advanced technology solutions, prioritizing data-driven decision-
making, overcoming resource constraints, and adapting to digital market demands are essential
strategies for success.

Furthermore, descriptive statistics of uniquely assessed variables in the post-digital

transformation phase indicated generally positive perceptions among respondents. Higher mean,
median, and mode values for overall satisfaction and recommendations compared to training and
adaption suggest a relatively positive perception of digital transformation strategies, with slightly
higher ratings for satisfaction and recommendations.

Financial performance: The trend analysis on business performance indicates a positive growth
trend for Alibaba's International Commerce Retail segment, supported by significant
technological investments and advancements. Investment on AI breakthrough, logistics
advancements, new retail solutions etc underscore the importance of prioritizing innovation and
technology in navigating the digital era.

Overall, other organizations looking to prosper in the e-commerce industry during digital
transformation can learn a lot from Daraz Group's experiences within Alibaba's ecosystem.
Through the implementation of similar tactics and the emphasis on innovation, companies can
set themselves up for success in the rapidly changing digital environment.

54
4. DISCUSSION

The primary objective of this study was to provide a pertinent answer to the following pool of
research questions.

RQ: How has the acquisition of Daraz Group by Alibaba and its strategic utilization of digital
technologies, including AI, big data, and cloud computing, influenced the evolution of its overall
business performance over time?
Sub-RQ1: How has digital transformation at Daraz Group impacted customer engagement and
supply chain management, key components of its e-commerce operations?
Sub-RQ2: What lessons can be drawn from Daraz Group's experiences within Alibaba's
ecosystem for other companies seeking to navigate the digital era in the e-commerce sector?

On the main research question, Alibaba's accomplished use of digital technologies on Daraz, as
revealed by quantitative analyses, significantly enhanced various facets of its e-commerce
operations. Despite having a statistical decrease, the shift reflects perceived improvements post-
digital transformation, signifying effective technology utilization. A substantial increase post-
transformation signifies enhanced customer satisfaction and engagement, reflecting successful
digital initiatives.

Additionally, significant improvement in perceptions post-transformation indicates enhanced

efficiency and effectiveness in supply chain operations. Marked enhancement in perceptions
post-transformation underscores improved organizational dynamics, facilitating streamlined
operations. Significant improvement post-transformation highlights optimized resource
allocation and support systems, enhancing operational efficiency. In summary, the acquisition of
Daraz by Alibaba has created a great synergy. Alibaba's strategic use of digital technologies on
Daraz, including AI, big data, and cloud computing, effectively optimized various aspects of its
e-commerce ecosystem, leading to improved overall business performance.

The analysis further provided compelling evidence of the positive impact of digital
transformation on both customer engagement and supply chain management within Alibaba’s e-
commerce ecosystem focusing on Daraz. Post-digital transformation, there was a significant
increase in mean scores for user engagement and experience, indicating a substantial

55
improvement in customer satisfaction and interaction. These findings suggest that Alibaba's
digital initiatives enabled Daraz to effectively enhance customer engagement, leading to a more
positive user experience and improved business performance.

Similarly, perceptions of supply chain management showed a significant improvement post-

digital transformation, highlighting the positive impact of digital initiatives on supply chain
efficiency and effectiveness. These results imply that Alibaba's digital transformation strategies
successfully optimized Daraz’s supply chain processes, resulting in enhanced operational
performance within the e-commerce ecosystem. Overall, the findings underscore the
transformative effect of digital transformation on both customer engagement and supply chain
management, emphasizing the pivotal role of digital technologies in driving operational
excellence and business success within the e-commerce sector and so answering sub-research
question 1.

Finally, the research answered sub-research question 2, emphasizing Alibaba's successful digital
transformation journey that offers valuable lessons for companies navigating the digital era in the
e-commerce sector. It underscored that effective utilization of digital technologies is crucial for
addressing operational challenges and driving business growth in the digital age. Organizational
agility and a culture of innovation are essential for responding to technological advancements
and market dynamics. Furthermore, prioritizing customer needs and preferences, leveraging
data-driven insights, and continuous innovation are key to delivering value and remaining
competitive. In essence, companies can learn from Daraz's experiences within Alibaba’s
ecosystem by strategically utilizing digital technologies, fostering organizational adaptation, and
adopting a customer-centric approach to drive success in the e-commerce sector.

The findings of the research have important significance for understanding how digital
technologies are strategically used in e-commerce ecosystems, both in academia and business.
This study adds to the expanding collection of research on digital strategy and innovation
management by clarifying the effects of digital transformation on many aspects of organizational
performance.

Moreover, Alibaba's digital transformation journey and the radical tactics applied on Daraz
provides essential lessons for companies navigating the e-commerce sector in the digital era. Key
takeaways include the importance of effective technology utilization to address operational

56
challenges and foster growth, the necessity of organizational agility and innovation to adapt to
market dynamics, and the critical role of a customer-centric approach driven by data insights and
continuous innovation. By learning from Alibaba's experiences, companies can strategically
leverage digital technologies, promote organizational adaptation, and prioritize customer needs
to achieve success in the evolving e-commerce landscape.

The findings of this study align with previous research that has explored the impact of digital
transformation on various aspects of business performance within the e-commerce sector. For
instance, Schneider & Kokshagina (2021) demonstrated that companies leveraging digital
technologies effectively, witness enhancements in customer engagement and operational
efficiency. They noted that digitalization enables companies to improve customer engagement
and operational efficiency through the strategic use of technology. It mirrors the positive effects
observed in Alibaba's digital initiatives on customer engagement and supply chain management.

Additionally, The alignment between the findings of G. Elia et al. (2020) and Alibaba's
customer-centric approach highlights the importance of data-driven decision-making and
innovation in driving customer value. By leveraging data insights to inform strategic decisions
and fostering a culture of innovation, Alibaba has been able to enhance customer satisfaction,
loyalty, and overall business performance. This customer-centric approach lies at the heart of
Alibaba's digital transformation journey, driving its success in the competitive e-commerce
landscape. Similarly, Zhang et al. (2021) highlighted the importance of organizational agility and
innovation in responding to technological advancements. Their study emphasized that
organizational agility and innovation are critical for adapting to technological advancements and
market dynamics. This notion supports the emphasis in current research regarding the
significance of organizational adaptation in navigating the digital era.

In the realm of supply chain management, the study by S. Elia et al. (2021) and Shashi et al.
(2020) corroborated the author's findings, illustrating that effective utilization of digital
technologies enhances efficiency and effectiveness. They concluded that effective utilization
of digital technologies leads to enhanced efficiency and effectiveness in supply chain
management. This alignment supports the notion that digital transformation initiatives can yield
tangible benefits in streamlining supply chain processes. However, it is essential to acknowledge
that challenges may vary across contexts, necessitating tailored approaches to digital adoption
within specific organizational settings.

57
Moreover, Pandey et al. (2020) emphasized the pivotal role of technological innovation in
driving business growth within the e-commerce sector. They underscored that technological
innovation is critical for driving business growth in the e-commerce sector. The current research
echoes this sentiment, highlighting the strategic utilization of technology as a key driver of
performance improvement. By aligning with these findings, this research underscores
the overarching significance of leveraging digital technologies to remain competitive and foster
growth in the rapidly evolving e-commerce landscape.

The research conducted by Porfírio et al. (2021) and Klein (2020) echoes the central theme of the
current study by emphasizing the crucial role of leadership in digital transformation (DT)
initiatives. Their analysis highlights how specific management characteristics, particularly
managers' coherence towards the company's mission, promote more advanced stages of DT.
Similarly, this research underscores the significance of leadership alignment with strategic
objectives to drive meaningful DT. All these studies contribute to understanding the conditions
necessary for successful DT, emphasizing the importance of leadership and management
coherence in navigating the complexities of digital transformation within organizations.

However, some studies also examined the impact of digital technologies on supply chain
management and found that while digitalization can enhance efficiency in certain areas, it may
also introduce new vulnerabilities and risks. For instance, reliance on digital platforms and
interconnected systems increases the potential for cybersecurity threats and supply chain
disruptions, which could undermine the overall effectiveness of digital transformation efforts
(O’Brien et al., 2023). While the author's findings align with the positive impacts of digital
initiatives, it's crucial to acknowledge the nuanced challenges that may arise alongside these
advancements. Similarly, Elgendy et al. identified pitfalls linked to data-driven decision-making,
emphasizing the importance of cautious interpretation of vast data sets. They noted that
organizations may encounter challenges in managing and interpreting vast amounts of data,
leading to decision-making biases and ineffective innovation strategies (2022). While the current
study showcases the benefits of digital transformation, these contrasting perspectives underscore
the need for organizations to navigate digitalization carefully, considering both opportunities and
risks.

In synthesizing these insights, it becomes evident that while digital transformation offers
substantial opportunities for enhancing business performance, it also poses inherent challenges

58
and risks that require careful management. By critically examining the findings of previous
research and comparing them with the author's own, a nuanced understanding of the multifaceted
nature of digital transformation within the e-commerce sector could be achieved. This
comprehensive analysis aims to enhance the ability to contextualize current research findings
and contribute meaningfully to the broader research landscape, fostering a deeper understanding
of the implications of digitalization on organizational performance.

The practical implications of this research are manifold. Firstly, the insights derived from
Alibaba's experiences can guide other companies in formulating and implementing effective
digital transformation strategies tailored to their specific contexts and objectives. By leveraging
emerging technologies and fostering a culture of innovation, organizations can enhance
operational efficiency, customer satisfaction, and competitive advantage in the digital age.

Furthermore, the findings underscore the importance of continuous monitoring and adaptation to
changing market dynamics and technological advancements. By embracing a proactive approach
to digital transformation, companies can position themselves for sustained growth and resilience
in an increasingly digitalized business environment.

Despite the valuable insights obtained from this study, several limitations should be
acknowledged. Firstly, the research focused solely on Daraz’s experiences within the e-
commerce ecosystem of Alibaba, limiting the generalizability of the findings to other industries.
While Alibaba is a significant player in the e-commerce sector and its digital transformation
journey provides valuable insights, generalizing findings from a single case study to the entire
industry may limit the broader applicability of the results. Additionally, the study relies heavily
on quantitative analyses such as independent samples t-tests and descriptive statistics, which may
overlook nuanced qualitative aspects of Alibaba's digital transformation.

Moreover, the data collection process, including the use of questionnaires and financial
performance analysis, may introduce biases or limitations in terms of response rates, data
accuracy, and completeness. The reliance on self-reported data and the limited sample size in
certain analyses may also introduce bias and affect the reliability of the results.

Furthermore, while efforts were made to analyze the financial performance of Alibaba's digital
transformation, external factors beyond digital initiatives may have influenced the observed

59
outcomes. The study's temporal scope was confined to a specific period, potentially overlooking
long-term trends and fluctuations in Alibaba's performance. Future research could address these
limitations by conducting longitudinal studies and incorporating a broader range of industries
and companies to provide a more comprehensive understanding of digital transformation
dynamics.

60
CONCLUSION

In conclusion, this research aimed to investigate the impact of leveraging digital technologies in
the e-commerce sector to enhance customer engagement, optimize supply chain management,
and elevate overall business performance and competitiveness, on Daraz's experiences within
Alibaba ecosystem serving as a guiding case study. The main results of the study revealed
significant improvements in technology perception, user engagement, supply chain management,
communication, and collaboration within Alibaba's e-commerce ecosystem following its digital
transformation initiatives imposed on Daraz. These findings underscore the transformative
potential of digital technologies in addressing operational challenges and driving business
success.

The primary objective of this research was to explore how companies in the e-commerce sector
can strategically utilize digital technologies to enhance their competitiveness and operational
efficiency. By examining Alibaba's successful digital transformation journey, it aimed to identify
key lessons and insights that could inform and guide other organizations navigating the digital
era.

The study uncovered a series of key findings. The study revealed substantial enhancements
across key areas including technology perception, user engagement, supply chain management,
communication, and organizational support. These improvements signify the tangible impact of
effectively harnessing digital technologies, such as AI, big data, and cloud computing, to
overcome operational hurdles and bolster overall business performance. The author, hence,
interpreted that by strategically deploying these technologies, Alibaba (Daraz) has successfully
optimized its operations, paving the way for sustained growth and competitiveness in the
dynamic e-commerce landscape.

The study's insights offer actionable guidance for organizations seeking to replicate Alibaba's
success in digital transformation. By imitating Alibaba's strategic approach and investing in
robust technology infrastructure, businesses can strengthen their operational foundations,
enhance efficiency, and elevate customer engagement and satisfaction levels. Moreover, the
study underscores the critical importance of fostering a culture of innovation and adaptability to
thrive in an ever-evolving digital landscape. By embracing innovation and remaining agile,

61
companies can proactively respond to market shifts and emerging technological trends,
positioning themselves for sustained growth and competitive advantage in the e-commerce
arena.

While this study provides valuable insights into the impact of digital transformation in the e-
commerce sector, there are several avenues for future research. Firstly, comparative studies
across multiple companies and industries could provide a more comprehensive understanding of
digital transformation strategies and their effects. Additionally, exploring emerging technologies
such as blockchain, augmented reality, and virtual reality could offer new insights into the future
of e-commerce. Furthermore, longitudinal studies tracking the long-term effects of digital
transformation initiatives would contribute to a deeper understanding of their sustainability and
effectiveness over time.

62
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APPENDICES

Appendix 1: Survey questionnaire

Variables Pre-digital Transformation Phase Post-digital Transformation Phase

Location/Country
Professional
Tenure
Technology The following aspects at Daraz The following digital
Perception Group before its acquisition by transformation initiatives
Alibaba had room for introduced by Daraz Group after
improvement: its acquisition by Alibaba has
1. The efficiency of customer highly transformed the business
service interactions performance:
2. The decision-making process 1. The introduction of AI-powered
lacking data-driven analytics chatbots for customer service
3. User experience, especially in a 2. The implementation of data-
mobile context driven analytics for decision-
4. Personalization of product making
suggestions 3. The integration of cloud-based
5. Substantial improvements were solutions for enhanced scalability
needed in work processes. 4. The adoption of a mobile-first
approach for user experience
5. The launch of personalized
recommendation engines for
product suggestions
6. I have observed substantial
improvements in my work
processes as a result of the digital
transformation.
7. Significant challenges were
faced in complying with

74
 government policies during the
digital transformation.

User Engagement 1. User satisfaction with the tools 1. I am satisfied with the user
and Experience and platforms for engagement was engagement tools and platforms
optimal. introduced during the digital
2. Customer feedback was transformation.
extremely positive regarding their 2. I have received extremely
experience. positive feedback from customers
regarding their experience with
the newly introduced/transformed
tools.
Supply Chain 1. The supply chain management 1. The digital transformation has
Management processes were effective. positively impacted supply chain
management processes.
2. Efficiency in supply chain 2. I have experienced increased
operations was optimal. efficiency in supply chain
operations since the
implementation of digital
technologies.
Training and N/A 1. I felt well-prepared in adapting
Adaptation to the new digital tools introduced
during the transformation.
2. Sufficient training resources
were provided to help me navigate
and utilize the new digital
technologies effectively.
Communication 1. Communication tools used 1. Communication within the
and Collaboration within Daraz Group were optimal. organization has improved with
the introduction of digital tools.
2. Currently used digital platforms
are very effective in facilitating

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 collaboration among teams and
departments.
3. I have noticed positive changes
in the overall workplace culture
and communication dynamics
since the digital transformation.
Organizational 1. The adequacy of organizational 1. The organization has provided
Support and slack influencing innovation were exceptional support and resources
Resources optimal. for a smooth digital
transformation.
2. There were no significant
challenges or gaps in resources
that hindered the optimal
implementation of digital
technologies.
3. The overall organizational
commitment to supporting
employees during the digital
transformation is high.

Overall N/A 1. I am extremely satisfied with

Satisfaction and the overall outcome of Alibaba's
Recommendations digital transformation journey.
2. I highly recommend other e-
commerce companies to learn
from and adopt the digital
transformation initiatives taken by
Alibaba.

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Appendix 2: Summary statistics of thematic sentiment analysis

Mean of Median of Count of

Timeframes Thematic Categories
Ratings Ratings Ratings

Acquisition Phase User Experience 2.90 2.00 169.00

Acquisition Phase App Management 2.84 2.00 301.00

Performance &
Acquisition Phase Promotions 2.44 2.00 9.00
Early
Implementation
Phase User Experience 3.62 4.00 596.00
Early
Implementation
Phase App Management 3.64 4.00 862.00
Early
Implementation Performance &
Phase Promotions 3.59 4.00 37.00

Optimization Phase User Experience 2.99 2.00 632.00

Optimization Phase App Management 3.20 4.00 1,029.00

Performance &
Optimization Phase Promotions 2.78 2.00 37.00

Stabilization Phase User Experience 2.18 1.00 90.00

Stabilization Phase App Management 2.94 2.00 254.00

Performance &
Stabilization Phase Promotions 1.57 1.00 7.00

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Appendix 3: Financial performance

Revenue Growth of Source

International
Commerce Retail
Period
% of
US$
Total
(million)
Revenue
2019 2,914 5% (Alibaba Group, 2019)
2020 3,435 5% (Alibaba Group, 2020)
2021 5,259 5% (Alibaba Group, 2021)
2022 6731 5% (Alibaba Group, 2022)
2023 7262 6% (Alibaba Group, 2023)

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Appendix 4: Open-ended questions

Relevancy with Pre-digital transformation Post-digital transformation phase

the components phase (challenges or (positive experience or success
of TOE obstacles) (Number of stories) (Number of instances)
framework instances)
Difficulty in developing user- Implementation of Alipay's
friendly tracking systems for technology for faster and secure
packages and implementing online payments. (2)
faster delivery/refund
processes. (3)
Outdated technology Adoption of XSpace platform for
Technology hindering customer smoother Omni Channel
engagement and supply chain maintenance and real-time data
optimization. (2) analytics. (2)
Lack of technological tools Launch of Digibox package delivery
generating inefficient results system and Packaging Material
in various aspects. (1) Information Management System.
(2)
Lack of financial resources Enhanced efficiency, productivity,
and vision hindering and customer experience through
revolutionary digital data-driven decision-making. (3)
transformation. (2)
Organization
Lack of clear management Focus on revamping customer
motivation for implementing experience, including faster refund
digital transformation. (1) processes and integration with
payment aggregator banks. (4)
Difficulty in adapting to Improved satisfaction and service
digital demands and efficiency through enhancements in
External task
streamlining mobile services, personalized
environment
inventory/logistics across shopping experiences, and expanded
diverse markets. (2) delivery/payment options. (3)

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Appendix 5: Non-exclusive licence

A non-exclusive licence for reproduction and publication of a graduation thesis1

I Subarna Islam Sharna

1. Grant Tallinn University of Technology free licence (non-exclusive licence) for my thesis
Digital transformation in Alibaba's e-commerce ecosystem: Leveraging technology for
transformation, supervised by Tarmo Koppel, PhD,

1.1 to be reproduced for the purposes of preservation and electronic publication of the
graduation thesis, incl. to be entered in the digital collection of the library of Tallinn University
of Technology until expiry of the term of copyright;

1.2 to be published via the web of Tallinn University of Technology, incl. to be entered in the
digital collection of the library of Tallinn University of Technology until expiry of the term of
copyright.

2. I am aware that the author also retains the rights specified in clause 1 of the non-exclusive
licence.

3. I confirm that granting the non-exclusive licence does not infringe other persons' intellectual
property rights, the rights arising from the Personal Data Protection Act or rights arising from
other legislation.

27.05.2024

1
The non-exclusive licence is not valid during the validity of access restriction indicated in the student's application for
restriction on access to the graduation thesis that has been signed by the school's dean, except in case of the university's right to
reproduce the thesis for preservation purposes only. If a graduation thesis is based on the joint creative activity of two or more
persons and the co-author(s) has/have not granted, by the set deadline, the student defending his/her graduation thesis consent to
reproduce and publish the graduation thesis in compliance with clauses 1.1 and 1.2 of the non-exclusive licence, the non-
exclusive license shall not be valid for the period.

80