2. E-COMMERCE
e-Commerce (electronic commerce) is the trading and facilitating of
trading in products or services using computer networks, such as the
Internet or online social networks.
11. Future & Trends
Mobile e-commerce is
rising
U.S. mobile commerce sales last
year totaled $104.05 billion, up 38.7
percent from $75.03 billion in 2014,
according to Internet Retailer
magazine.
12. Future & Trends
E-commerce & Holidays
Cyber Monday is the largest online shopping day of the year in the U.S., with $3.45
billion in sales (2016). In China, Alibaba has turned Single’s Day (Nov.11th) into the
world’s largest shopping extravaganza, breaking the one-day e-commerce sales
record with $17.8 billion this year.
16. Alibaba group was founded in 1999
by 18 people led by Jack Ma, a
former English teacher from China.
The company's goal was to
champion small businesses, in the
belief that the internet would level
the playing field by enabling small
enterprises to leverage innovation &
technology to grow and compete
more effectively in the domestic
and global economies.
17. Mission
“We provide the fundamental technology
infrastructure & marketing reach to help
merchants, brands and other businesses
that provide products, services and digital
content to leverage the power of the
internet to engage with their users and
customers. Our businesses are
comprised of core commerce, cloud
computing, digital media and
entertainment, innovation initiatives and
others. Through investee affiliates, we
also participate in the logistics and local
services sectors.”
18. Vision
“We aim to build the future infrastructure of commerce.”
Meet @ Alibaba
We enable hundreds of millions of commercial & social interactions
among our users, between consumers and merchants, and among
businesses every day.
Work@Alibaba
We empower our customers with the fundamental infrastructure for
commerce and data technology, so that they can build businesses
and create value that can be shared among our ecosystem
participants.
Live@Alibaba
We strive to expand our products and services to become central to
the everyday lives of our customers.
102 Years
For a company that was founded in 1999, lasting at least 102 years
means we will have spanned three centuries, an achievement that
few companies can claim. Our culture, business models and
systems are built to last, so that we can achieve sustainability in the
long run.
19. Alibaba
Alibaba has a simple yet aggressive strategy; partner with millions of
merchants - serving 2BN consumers
20. Alibaba
Alibaba Group Offerings:
Alibaba operates various
businesses and also derives
support for their ecosystem
from businesses and services
of the related/affiliated
companies shown here.
21. Taking a closer look at three of
Alibaba’s subsidiaries
Taobao.com
⊡ Launched in May 2003
⊡ The online shopping
destination of choice for
Chinese consumers
⊡ Features hundreds of
millions of products and
services
⊡ China’s largest mobile
commerce destination by
monthly active users in
2015
TMALL.COM
⊡ Launched in April 2008
⊡ Provides a premium
shopping experience
⊡ Offers top-quality
branded merchandise
⊡ China’s largest 3rd party
platform for brands &
retailers by monthly active
users in 2015
ANT FINANCIAL
⊡ Financial services
provider focused on small
& micro enterprises
⊡ Vision is to “bring small &
beautiful changes to the
world”
⊡ Dedicated to building an
open ecosystem of
internet thinking &
technologies
24. Lakeside Partners
In July 2010, the Lakeside Partnership was formalized.
The partnership has helped Alibaba better manage the company, by enabling senior managers to
collaborate and override bureaucracy and hierarchy.
The Alibaba partnership consist of 34 members which include 26 members of Alibaba’s
management team, 7 members of Ant Financial and 1 member of Cainiao Network.
25. Lakeside Partners (continued)
Jingxian CAI Principal
Engineer
Li Cheng
Chief Technology Officer, Ant
Financial Services
Trudy Shan DAI
Chief Customer Officer
Luyuan FAN
President, Payment Business, Ant
Financial Services
Yongxin FANG
Director, Human Resources
Simon Xiaoming HU
President, Alibaba Cloud Computing
Jane Fang JIANG
Chief People Officer
Peng JIANG
Senior Vice President
Jianhang JIN
President
Eric Xiandong JING
President, Ant Financial Services
Zhenfei LIU
Chief Risk Officer
Eric Xiandong
President, Ant Financial Services
Jonathan Zhaoxi LU
Vice Chairman
Jack Yun MA
Executive Chairman
Xingjun NI
Principal Engineer, Ant Financial Services
Lucy Lei PENG
Chief Executive Officer, Ant Financial Services
Sabrina Yijie PENG
General Manager, International, Ant Financial Services
26. Strategies
Long Term Strategic Goal
Serve 2,000,000,000
consumers served around the world
support 10,000,000
businesses to operate profitably.
Alibaba has embarked into three key initiatives to achieve the strategic goal:
1. Globalization
2. Rural Expansion
3. Big Data/ Cloud Computing
29. Global [current fiscal year (YE March 31,2016)]
All amounts in $USD.
● Total Revenue $15.7B
○ 33% YoY Growth
● Annual GMV $485B
● 423M Active Buyers
● Free Cash Flow $7.953B
● 410M Mobile MAUs
○ 63% of China Commerce Retail
Revenue (up from 30% in PY)
● BABA Stock Price $93.01 (11/27/16);
○ $68.00 (IPO on Sept. 2014)
● EPS (diluted) $2.60
○ 20% YoY Growth
● EBITDA $8.1B
○ 28% YoY Growth
BABA Global Revenue Growth
Growth Of Alibaba Group
Holding Limited
30. Segment [current fiscal year (YE March 31,2016)]
● Core Commerce $14.3B ($11.2B in 2015)
● China Commerce Retail (Taobao.com,
Tmall.com, Juhuasuan.com, cun.tabao.com,
Alimama.com, Tmall Global)
● China Commerce Wholesale (1688.com)
● International Commerce Retail (AliExpress,
Lazada)
● International Commerce Wholesale
(Alibaba.com)
● Cloud Computing $468M ($205M in 2015)
○ Alibaba Cloud (aliyun.com)
● Digital Media Entertainment and Others
$958M ($889M in 2015)
○ UC Web, YouKu, Alisports.com, Alibab Music,
Tmall TV, AutoNavi, YunOS, DingTalk
Growth Of Alibaba Group
Holding Limited
(continued)
32. Consolidated financial statements include company, its subsidiaries (including wholly-foreign-owned enterprises), and variable interest
entities (for which the company is the primary beneficiary). A subsidiary is an entity which the company owns more than 50% of the
voting power. A VIE must be consolidated by the primary beneficiary if the non-company equity holders do not have characteristics of a
controlling financial interest. A VIE must be 100% owned by PRC citizens or by PRC entities owned by PRC citizens that hold the Internet
content provider licenses or other business operations licenses in which foreign investment is restricted or prohibited.
Principles of Consolidation
Taobao Holding Limited (Cayman Islands)
Taobao China Holding Limited (Hong Kong)
Zhejiang Tmall Technology Co., Ltd. (PRC)
Taobao (China) Software Co., Ltd. (PRC)
Ali Panini Investment Holding Limited (Hong Kong)
Alibaba Group Services Limited (Hong Kong)
Alibaba (China) Co., Ltd. (PRC)
Alibaba Group Treasury Limited (BVI)
Alibaba Group Properties Limited (Cayman Islands)
Alibaba Investment Limited (BVI)
Ali UC Investment Holding Limited (Cayman Islands)
Ali WB Investment Holding Limited (Cayman Islands)
AutoNavi Holdings Limited (Cayman Islands)
Ali YK Investment Holding Limited (Cayman Islands)
Ali CV Investment Holding Limited (Cayman Islands)
Perfect Advance Holding Limited (BVI)
Hangzhou Ali Venture Capital Co., Ltd. (PRC)
Ali CN Investment Holding Limited (BVI)
Ali KB Investment Holding Limited (Cayman Islands)
Alibaba.com Limited (Cayman Islands)
Alibaba.com Investment Holding Limited (BVI)
Alibaba.com China Limited (Hong Kong)
Alibaba (China) Technology Co., Ltd. (PRC)
Shen Zhen OneTouch Business Service Ltd. (PRC)
Alibaba.com International (Cayman) Holding Limited (Cayman Islands)
Alibaba.com International (BVI) Holding Limited (BVI)
Alibaba.com Singapore E-Commerce Private Limited (Singapore)
Alimama Limited (Cayman Islands)
Alimama Investment Holding Limited (BVI)
Alimama China Holding Limited (Hong Kong)
Hangzhou Alimama Technology Co., Ltd. (PRC)
Hangzhou Alimama Software Services Co., Ltd. (PRC)
Alisoft Holding Limited (Cayman Islands)
Alisoft Investment Holding Limited (BVI)
Alisoft China Holding Limited (Hong Kong)
Zhejiang Alibaba Cloud Computing Ltd. (PRC)
Alibaba Cloud Computing Ltd. (PRC)
Hangzhou Alibaba Advertising Co., Ltd. (PRC)
Hangzhou Ali Technology Co., Ltd. (PRC)
Zhejiang Taobao Network Co., Ltd. (PRC)
Zhejiang Tmall Network Co., Ltd. (PRC)
33. Alibaba CEO outlines 2016 Expansion Strategy
➔ Increase market share in first-tier China cities.
➔ Promote e-commerce among rural Chinese residents.
➔ Promote e-commerce globally.
CEO indicated that Alibaba will:
➔ Continue to build-up channels that allow international brands and merchants the opportunity to
sell online to Chinese consumers (Tmall Global, g.taobao.com).
➔ Invest in operations that allow retailers to tap the growing purchasing power of rural Chinese
consumers, and platforms that help rural farmers sell and deliver agricultural products to online
big-city shoppers.
➔ Continue to drive innovation in omnichannel retailing and
build-up on-demand service offerings.
Acquisition/Investment
Strategy of Alibaba
(continued)
34. General Approach to Acquisition/Investment Strategy
➔ Full acquisition.
➔ Initial minority investment (instead of full acquisition) when investee:
◆ Has strong management in place.
◆ Does not fit within core business operations but generates synergies.
◆ Demonstrates clear strategic value but capital/integration risk support a
phased-in approach.
➔ Post-initial investment: increase investment or acquire if business results,
cooperation and relationship with management show increasing value to ongoing
business strategy (UCWeb, AutoNavi, Youku Tudou).
Acquisition/Investment
Strategy of Alibaba
(continued)
35. Recent Mergers & Acquisitions
Activity of Alibaba Group
2010 Vendio Services
San Mateo, CA
100.0% Platform that provides sales management software by subscription
across multiple online sales channels. $27.8M.
2013 Kanbox 100.0% Network disk and synchronization tool that is used for file
management and backup.
2014 Alibaba Health
Information
Technology Limited
70.0% Develops the technology for systems related to pharmaceutical and
medical products in China. Chairman of Company owns 30% through
general partner (Yunfeng Capital). Subsequent to March 2016,
Company and Alibaba Health entered into a services agreement under
which Health will provide outsourced services to product categories in
Tmall online pharmacy.
2014 AutoNavi Holdings
Limited
100.0% Provider of digital map content and navigation based solutions in
China. In May 2013, Company owned 28%. In July 2014, Company
purchased all remaining shares. Rational of purchase: enable Company
to expand its products and services beyond e-commerce.
2014 UCWeb, Inc. 100.0% Developer of leading mobile web browsers in China, India and
Indonesia. Prior to June 2014, Company owned 66% of equity. UCWeb
is an important part of Company’s ecosystem to offer mobile services
from China as well as other parts of the world. Strengthens user
engagement and enables new marketing channels for merchants.
36. Recent Mergers & Acquisitions
Activity of Alibaba Group
(continued)
2014 Shenzhen OneTouch
Business Services, Ltd.
100.0% Provider of comprehensive export-related services tailored to the
needs of small businesses in China. Prior to 2014, Company owned 65%
interest. Rational: to expand Company’s products and services.
Company believes acquisition will help to serve the wholesale sellers
on the international wholesale marketplace by adding services.
2015 Guagdong Yueke
Software Engineering
Co.
100.0% Develops software for ticket bookings and theater management.
$134M. Purchased by Alibaba Pictures Group.
2015 Alibaba Pictures Group
Limited
49.5% Producer of movies and television programs in China. In June 2014,
Company owned 60% equity interest. In June 2015, Pictures placed
newly issued stock. Company’s interest diluted to 49.5%. Company
de-consolidated Pictures as a result of the dilution.
2016 Beijing
Zhuoyixunchang
Science & Technology
Limited Co. (Wandoujia)
Undiscl
d.
China-based search engine for mobile entertainment. $128M in 2
rounds.
2016 Quixey Inc.
Mountain View, CA
Undiscl
d.
Mobile technology company that provides better access and
engagement with apps. $134M in 5 rounds. Company initially invested
in equity and followed with debt financing.
37. Recent Equity Investment
Activity of Alibaba Group
2014 Weibo Corporation 30.0% Social media platform in China. In 2013, Company made initial
investment of 18% interest. Upon Weibo’s IPO, Company acquired
additional shares pursuant to an option to increase interest.
2014 Haier Electronics
Group Co., Ltd.
2.0% Research, development, manufacture and sale of electrical
appliances, especially large home appliances. In addition, Company
completed an acquisition of 9.9% equity interest in a wholly-owned
subsidiary of Haier that is engaged in the logistics business in China.
Furthermore, Company completed the subscription for a convertible
bond which is either convertible into ordinary shares of Haier or into a
24% equity interest in the subsidiary.
2014 1stdibs (FirstDibs)
New York, NY
Undisclsd. Retailer of upscale interior designs and decorations. $15M series C
round financing.
2014 TutorGroup Undisclsd. Multi-national on-line education company with an emphasis on
language. $100M from Company and 2 other investors.
2014 ChinaVision Undisclsd. Producer of several popular Chinese-language TV shows and movies.
$804M Company paid for a majority stake.
38. Recent Equity Investment
Activity of Alibaba Group
(continued)
2014 TangoMe, Inc.
Mountain View, CA
Undisclsd. US-based messaging app. 200M registered users, 70M MAU. $280M
investment.
2014 Guangzhou
Evergrande Taobao
F.C.
40.0% Professional soccer club team in the Chinese Super League. Possible
50% interest (conflicting info).
2014 Kabam, Inc.
San Francisco, CA
Undisclsd. Company produces online and mobile games. $120M deal involves
Company distributing Kabam’s products in China via Taobao.
2014 MomentCam Undisclsd. Photo app that transforms people into comic book characters.
2014 Intime Retail (Group)
Company Limited
9.9% Leading department store operators in China. Company also has a
subscription for a convertible bond which, upon conversion, would
increase interest to 26%.
2014
2015
Singapore Post
Limited
Post subsidiary
10.0%
34.0%
National post service provider in Singapore and leading provider of e-
commerce logistics solutions in the Asia-Pacific region. Company
agreed in 2015 to subscribe to newly issued ordinary shares which will
raise Company’s interest to 15%. Provides end-to-end e-commerce
logistics and fulfillment services across the Asia-Pacific region.
Subject to customary closing conditions.
39. Recent Equity Investment
Activity of Alibaba Group
(continued)
2015 Magic Leap, Inc.
Dania Beach, FL
10.0% Technological company focuses on development of augmented
reality technology. Investment is in newly issued convertible
preferred shares.
2015 CMC Holdings Limited
Limited partnership
managed by
founder
of CMC
21.0%
20.0%
Platform that focuses on the media and entertainment sectors.
Objective of partnership is consistent with that of CMC.
2015 Beijing Shiji
Information
Technology Co., Ltd.
13.0% Engaged in development and sale of hotel information management
system software, integration and service.
2015 Huayi Brothers Media
Corporation
4.0% Production of TV programs and movies in China.
2015 Koubei Holding
Limited
49.6% Integrates the convenient aspects of mobile commerce and big data
to provide consumers with information and promotional benefits
from local restaurants in China. Joint venture with Ant (Ant owns
49.6%). Unrelated third-party affiliated with a major Chinese
restaurant chain holds the remaining minority equity interest.
40. Recent Equity Investment
Activity of Alibaba Group
(continued)
2015 YTO Express
(Logistics) Co., Ltd.
12.0% One of the leading express courier companies in China. YTO is one of
the strategic express courier companies participating in the data
system of Cainiao Network to fulfill orders from the Company’s core
commerce business. Another company filed an application to
purchase all equity interest in YTO through a reverse takeover in
March 2016.
2015 Meizu Technology
Corporation Limited
29.0% Leading smart phone manufacturer in China.
2015 Wasu Media Holding
Co., Ltd.
0.0% Digital media broadcasting and distribution in China. Company
invested in wealth management products which serve as collateral to
the issuing bank for issuance of financing to one of Company’s
founders to support his minority interest in Wasu. Rational:
Company entered into strategic cooperation agreements with a Wasu
major shareholder in order to enhance the Company’s capabilities
and profile in the China entertainment sector.
2015 Best Logistics
Technologies
Limited
22.0% Provider of comprehensive supply-chain solutions and services
including express delivery, freight delivery, warehouse fulfillment,
software development and consulting to cross-border logistics
services. Since 2009, Company has participated in several rounds of
financing.
41. Recent Equity Investment
Activity of Alibaba Group
(continued)
2015 Lyft, Inc.
San Francisco, CA
Undisclsd. Peer-to-peer transportation platform.
$2.01B in 9 rounds.
2015 Jasper Infotech
(Snapdeal.com)
Undisclsd. India’s largest online marketplace in terms of sellers transacting on its
platform. $1.76B in 12 rounds.
2015 One97
Communications
Limited (Paytm brand)
Undisclsd. India’s largest mobile commerce platform. $680M. Investment may
be through Ant Financial.
2015 Snapchat, Inc.
Venice, CA
Undisclsd. Photo messaging app. $200M investment. As app is blocked in
China, it is unclear what value the investment brings to Company.
Company’s competitor, TenCent, invested in Snapchat in 2013.
Snapchat files for IPO (largest IPO since Alibaba in 2014).
2015 Suning Commerce
Group Co., Ltd.
(deal not completed
by end of fiscal year
March 31, 2016)
19.99% One of the largest consumer electronics retail chains in China. Suning
will subscribe to newly issued shares of the Company which
represents a 1.1% interest in the Company for cash. The companies
have entered into a strategic collaboration agreement to build on
synergies in e-commerce, logistics and incremental business through
joint omni-channel initiatives.
42. Recent Equity Investment
Activity of Alibaba Group
(continued)
2016 Rajax Holding
(“Ele.me”)
22.0% Operator of one of the largest mobile food ordering and delivery
services in China. Rational: complements Company’s investment in
Koubei in local services. Ant Financial and Company subscribed for
newly issued convertible preferred shares.
2016 Xiaoju Kuaizhi Inc.
(Didi Chuxing)
10.0% Provides taxis and vehicles for hire in China via smartphone
applications. World's largest mobile transportation service platform
(ride-sharing company providing transportation services). Purchased
Uber's China unit in August 2016. In 2016, committed to invest a
further $200M (initial investment $445M).
2016 Youku Tudou Inc. 98.0% Leading multi-screen entertainment and media company. In May
2014, Company owned 16.5% interest. In May 2016, Company
purchased all remaining shares that it - or its affiliate Yunfeng Capital
- did not own and Youku became a consolidated subsidiary. Yunfeng
has option to purchase up to 15% of equity. Youku is a core part of the
Company's strategy to offer digital entertainment to consumers.
2016 Cainiao Smart
Logistics Network
Limited
47.0% Operational experience in logistics, retail, and real estate in China. In
2014, Company took part in establishing Cainiao Network Technology
Co. Ltd. (CNTCL) with other parties and owned a 48% interest. In
March 2016, CNTCL restructured and became a wholly-owned
subsidiary of Cainiao Smart. Company's interest was diluted to 47%.
43. Recent Equity Investment
Activity of Alibaba Group
(continued)
2016 UCAR (Shenzhou
Zuche)
Undisclsd. One of the largest chauffeured car service providers in China. $1.37B
in 3 rounds. AutoNavi to be used in services.
2016 Lazada Group S.A.
(deal not completed
by end of fiscal year
March 2016)
Controllin
g Stake
Operates e-commerce platforms in Indonesia, Malaysia, The
Philippines, Singapore, Thailand and Vietnam. Company and certain
Lazada shareholders have a put and call arrangement (Company right
to purchase, shareholders right to sell collectively) for remaining
equity interest during a 6 mo. period after the first anniversary of the
closing.
2016 SCMP Group Limited Asset
purchase
Acquired media business which includes South China Morning Post
(premier English newspaper in HK, magazine, outdoor media, events
and conferences, and digital media assets.
2016 AGTech Holding
Limited
59.0% Integrated lottery technology and services company in China. Ant
Financial owns most other interest. 59% equity interest assumes that
Company subscribes for convertible bonds which are convertible into
ordinary shares.
2016 Sanjiang Shopping
Club Co. Ltd.
32.0% Supermarket chain. Rationale: increase Company's retail presence.
In November, Company subscribed to private placement equivalent
to 25% stake. Company also plans to invest in convertible bonds and
a share transfer.
44. ● Launched in 2016.
● Applicants are required to use at least one of Alibaba’s services.
● The missions of the funds are to help Hong Kong and Taiwan-based
entrepreneurs and young people realize their dreams and visions for
their businesses and communities.
Other Strategic Investments
2016 Health2Sync Makes an app for diabetics. Financing round led by Company raised $3M. May
align with Alibaba Health ambitions.
2016 Istaging Makes virtual and augmented reality software. Creates tours of property listings
and interior designs (allows customers to virtually try furniture in their homes).
$2M investment. Technology may be applied to enhance shopping experience for
Company’s users.
Taiwan Entrepreneurs Fund ($312M)
45. Other Strategic Investments
(continued)
2016 YEECHOO Operates an online designer apparel rental business.
2016 Shopline Provides cloud based computing solutions for small and medium-sized companies
to launch/manage e-commerce operations.
2016 GoGoVan Offers intra-city logistics services through a real-time platform that connects
customers with delivery service providers.
2016 Grana A fashion e-commerce retailer that offers wardrobe essentials created from
fabrics sourced worldwide.
2016 DayDayCook Creator of food and lifestyle content in Asia which produces bilingual cooking
videos with recipes.
2016 NOSH An O2O food delivery company that prepares and delivers health-conscious
meals.
Hong Kong Entrepreneurs Fund ($129M)
48. Pricing and Membership
Strategies
⊡ Pricing: Alibaba uses a competitive pricing model where
they set the price of a product based on comparing what
competitors are pricing the same product. Pricing is one
of the marketing strategies that Alibaba deploys to set a
low price in order to increase sales and market share.
⊡ Discount: Alibaba’s intent is to stimulate sales as well as
retaining customers through their discounting model.
Discounts are commonly offered on the company’s sites
during festivals and when customers make bulk
purchases.
⊡ Free Membership: Earlier in Alibaba’s existence the
company offered new customers free membership to
their site as a tactic to attract new users. Once the
company reached a significant membership registration
milestone it withdrew its free membership and began
charging membership fees.
⊡ Value-Added Services: Services such as shipping, instant
delivery, guarantees, and warranties are offered to help
increase the profitability of the product sale.
49. Overseas Strategies
⊡ Target: The global marketplace
based in English Language that cater
to international exporters and
importers.
⊡ Gateway to China: Alibaba’s B2B
marketplace has acted like a gateway
to China and the growing economy’s
enormous capacity to produce goods
that the world wants.
50. Overseas Strategies
BUILD TRUST
Alibaba does everything it can
to build more trust, opening the
gates wider to the world. This is
evidenced in initiatives like
business verification, factory
inspections, and stringent
demands on quality of products.
LOCALIZATION
In order to get a huge portion of
market share, Alibaba has localized the
e-trade services by developing websites
that locate to 100 different languages
and modify their design and layouts,
which suits the local cultural in
overseas. On the Single’s day, they start
to allow customers in Hong Kong and
Taiwan to purchase discounted items
using local currency and local payment
methods.
DISPLAY ADS
AliExpress, utilized an aggressive
online marketing strategy, and
managed to surpass eBay in global
desktop traffic. AliExpress manage
to increase their worldwide
desktop traffic by 366% from May
2014 to July 2015.
EFFECTIVE PROMOTION METHODS
Alibaba charges sellers for the
benefit of using their promotion
methods. This ensures that
customers see your product
specifically when they search for
related items.
ADDITIONAL FEATURES
Alibaba offers many tools and
features which are also paid for by
the seller. These include a search
engine, link engine, forums and
live help.
52. Shopping is not just a transaction in China, it is an event.
Celebration of mark-downs
&
Star-studded countdown gala
&
Live-streamed contests
&
Reality TV shows through multiple channels
Watch Video
Campaign Strategies
53. Nov. 11th, the annual Singles’ Day, is a
shopping celebration organized by
Chinese e-commerce giant Alibaba.
The e-tailer began celebrating the
day, a “folk holiday” on which China’s
many single people buy gifts for
themselves, in 2009 with just 27
merchants. Since then, the event has
grown into a multibillion-dollar
enterprise. This year, it includes
40,000 merchants offering
discounts on millions of products.
Campaign Strategies
54. Singles’ Day has become not
just the largest e-commerce
shopping day in China but
the largest in the world.
Singles’ Day sales have
grown from around $100
million in 2009 to $17.8
billion in 2016, according to
research firm IDC.
For comparison, Cyber
Monday in the U.S.
generated $3.45 billion in
sales this year (2016).
Campaign Strategies
55. Rural Taobao
Estimated 600 million
Chinese reside in rural areas.
They are not only a source of
a vast number of products
and resources in demand.
56. ⊡ The number of online shoppers in rural areas
increased to 77.14 million in 2014,
expanding 40.6% year-over-year,
according to CNNIC.
⊡ At the end of 2014, there were just 178
million Internet users in rural China, fewer
than one out of very three rural residents,
according to CNNIC.
Rural Taobao
57. ⊡ In October 2014, Alibaba Group
announced it would invest $1.6
billion (RMB10 billion) over the next
three to five years to build 1,000
county-level “Taobao rural operations
centers” and 100,000 village-level
“Taobao rural service centers”
throughout China.
⊡ As of the end of 2015, more than
12,000 village-level service centers
were open in more than 20
provinces.
Rural Taobao
58.
59. In 2016, Buy+ was launched
ahead of China’s Singles’ Day
shopping festival.
On Day One, an hour after it
launched, 30,000 people had
tried the platform.
The occasion produced
150,000 cardboard headsets
sold.
Future Strategies
Organizational Structure:
The structure of Alibaba is also significant. The company has an unusual partnership structure, consisting of a group of 36 managers dubbed the "Alibaba Partnership," who have the power to nominate a majority of board members.
Roughly one-quarter of the team is affiliated with Alibaba through the holding company for its sprawling Internet finance businesses, including the payment processor Alipay.
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I am excited to show you how Alibaba accomplish so many achievement by several special marketing strategies.
As we showed you before, Alibaba shares a huge part of the e-commerce marketplace including C2C, B2C and B2B.
They also have different platforms for international buyers and domestic buyers.
For example, Aliexpress is a C2C platform for international buyers. And their main competitor is ebay.g
How Alibaba became so successful ? These are 4 key strategies. I want to point out two of them.
Pricing: Alibaba uses a competitive pricing model where they set the price based on what competitors are pricing the same product. You can usually find the product on Alibaba’s platform with the lowest price.
Free Membership: The company offered new merchant free membership earlier to their site as a tactic to attract new users. More merchants
Speaking of the overseas market, Alibaba has targeted English speaking population few years ago and now is heading to several developed countries around the world. Their ultimate goal is being the international gateway to China.
These are several strategies that Alibaba uses to increase international sales. For example,
build trust: provide business verification, factory inspections, → customers feel safe to buy.
LOCALIZATION: develop websites that locate to nearly 100 different languages, including popular language like English, Spanish, and language in small population like Nepali language. They also modify their design and layouts, which suits the local cultural overseas.
AliExpress, utilized an aggressive DISPLAY ADS strategy. It has surpass eBay in global desktop traffic in 2015, last year.
Singles day, the most special campaign that Alibaba has ever conducted. 7 years ago, the concept of Singles day did not even exist. Now it is China’s Massive Shopping Holiday
Let’s take a look what singles day is about.
The success does not end. On the eve of Singles’ Day, the company also hosted a star-studded countdown gala in the technology hub of Shenzhen. Hollywood actress Scarlett Johansson, sports celebrity David Beckham, fashion designer Victoria Beckham and basketball legend Kobe Bryant were among those that attended. Pop star Katy Perry had been named to be the event’s global ambassador, but she pulled out at the last minute, citing a family emergency, according to the company.
The group is taking Singles’ Day outside mainland China for the first time this year, allowing customers in Hong Kong and Taiwan to purchase discounted items through its shopping site Tmall using local currency and local payment methods.
In 2009, it was only with just 27 merchants. This year, it includes 40,000 merchants offering discounts on millions of products.
Here’s the chart of Alibaba’s singles day sales. It is continuing to grow. It's only 100 million in 2009, this year it hits 17.8 billions.
There are roughly 600 million Chinese reside in rural areas.
The number of online shoppers in rural areas increased to 77.14 million in 2014, expanding 40.6% year-over-year
invest $1.6 billion to build 1,000 county-level “operations centers” and 100,000 village-level “service centers”
Some experts predicted that VR/AR is going to change the E-commerce marketplace rapidly.
Buy+ was launched ahead of China’s Singles’ Day
On Day One, an hour after it launched, 30,000 people had tried the platform. produced 150,000 cardboard headsets sold.