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M-commerce, marketing boost Alibaba

News, 01 February 2016

BEIJING: A slowing Chinese economy failed to hold back Alibaba as its total revenue grew 32% in the final quarter of 2015, which the internet giant attributed to a growing number of mobile users and its ability to monetise their activities.

Chief Executive Officer Daniel Yong Zhang told a quarterly earnings call that the business had added 47m monthly active users on mobile in the quarter ending December 31 – bringing the total to 407m – and that they were using shopping apps to buy goods and services on the Tmall and Taobao marketplaces.

"On our platforms, marketing activities contribute relevant content that enriches the consumer experience," he said. "Brands invest on our platform to build relationships with customers that deliver lifetime value in the form of repeat purchase and brand loyalty."

Nor was that lifetime value creation restricted to online channels: "Investments in online marketing on our platform influence and shape consumer behaviour offline," Zhang claimed, as he observed brands starting to integrate online-to-offline strategies.

He went on to explain that where online advertising is generally split into brand ads and direct response ads, "within [the] Alibaba ecosystem, with our retail platforms and our media platforms we are building up, we can do a very unique combined effect".

More and more brands were realising the value of this type of ad, he said. "They can not only catch the eyeballs of the audience, but also drive them back to their retail platforms to make interactions".

Zhang expected that this would create opportunities for both customer acquisition and repeat purchases.

But, he added, it was vital to measure these effects, "and that's the job we are doing right now … build[ing] a new set of measurements together with our partners for the brand – for the advertisements and the partners".

And he linked that back to the slowing economy. "When people are cautious, people care more about the effectiveness of the marketing dollar usage," he said.

"They continue to spend more dollar on our platform because that's one of the few platforms they can find to get the close-looped consumer track and the consumer interaction."

Data sourced from Seeking Alpha; additional content by Warc staff