What factors are important in understanding this decision situation?

When you’re already big it can be hard to get bigger. That’s why Alibaba is working hard to continue to expand its e-tailing empire.
In 1999, Jack Ma, inspired by a trip to the U.S. where he first encountered the Internet, led a group of 17 friends to form Alibaba.com. Initially, the website was a business-tobusiness portal to bring together Chinese exporters, manufacturers, and entrepreneurs with overseas buyers. Today, the Alibaba Group, often called the Chinese Amazon, is a leading online and mobile marketplace in retail and wholesale trade, cloud computing, and other services. For fiscal year 2018, the group’s retail businesses had more than 552 million active users and 51 percent of the Chinese e-commerce market. Its Singles Day (a kind of Black Friday event) generated 812 million orders and USD$25.3 billion—in a single day!
In China’s growing urban centers, about 73 percent of the population is connected online. However, that number drops to about 27 percent in rural areas, even though more than 42 percent of the country’s population lives in those regions.
Due to the constraints of lower incomes, dispersed populations, and poor logistics, rural traditional retail options are limited, have higher prices, and inferior product quality. These limitations make for tremendous prospects for expansion of online sales, which, according to recent reports, represents only around 17 percent of total retail sales in China. To take advantage of this opportunity, Alibaba’s e-commerce business, Rural Taobao, has opened service centers in many rural villages. There, residents can search for deals on products like mobile phones, toothpaste, apparel, and more using companyprovided computers. As of 2018, Rural Taobao had expanded to cover 29 provinces and more than 30 villages. And Alibaba has committed to investing over USD$1.5 billion on logistics, hardware, and training in more than 100,000 villages to support the Rural Taobao strategy.