Alibaba Is Building An ‘E-Commerce Media Ecosystem’

Retailers need to dispense with the idea that e-commerce is merely another sales channel for their products and embrace the marketing and brand-building potential that it offers, Alibaba Group CEO ‘Daniel Zhang’ said this year.

As consumers live more of their lives online via social media and smartphone apps, “branding and marketing is not only about sales, but about having consumers interact with brands, and about building relationships between brands and customers”, Zhang said during an Alibaba conference held in Hangzhou, China. The conference was attended by over 800 merchants who sell and operate on the e-commerce behemoth’s Tmall.com and Tmall Global marketplaces.

Alibaba, which runs China’s largest online-shopping marketplaces, is urging retailers to think of Tmall and sister website Taobao as signifcantly more than simply a virtual shelf space for listing and vending products.

Zhang introduced the idea of Alibaba’s “e-commerce media ecosystem” that reaches consumers through a variety of digital channels and is intended to carry marketing messages beyond the 407 million annual active users on Alibaba’s China retail marketplaces. Alibaba are proving to be very progressive and successful in their approach.

“We would like to connect our e-commerce platforms with media,” Zhang explained. Over the past few years Alibaba has been building ties with China’s most popular digital media outlets through partnerships and business investments. The company has a stake in microblogging website Sina Weibo and acquired China’s leading mobile browser, UCWeb. Alibaba also plans to buyout Youku Tudou, China’s largest video-streaming site.

These investments are aimed at helping merchants run targeted, multichannel advertising and marketing campaigns on a plethora of platforms to raise their brand awareness and drive e-commerce sales. The wider the scope for marketing and penetration the greater Alibaba’s potential for continued growth.

“We also have Taobao Headline, a shopping-news media app,” Zhang added, “and Weitao, a social media feature within Mobile Taobao which allows merchants to interact with users on smartphones via text, video and interactive campaigns.” This has the affect of humanizing and personalizing the e-commerce process, interactivity with dynamic Chinese consumers is key.

Data is vital for e-commerce platforms to reach the right audiences through targeted, intellectual campaigns where product recommendations for individual consumers are provided. Alibaba collects valuable user data from its online shopping sites and related media to tailor the shopping experience for the individual. This drive is set to continue with the aquisition of multi channel, other media related services as Alibaba grows it’s ‘media eco-system’.

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Benji lives in Shanghai, China and is passionate about providing solutions for western brands looking to expand into China, for more information see his blog and website here.

 

 

 

Think Goods Plus Services

eBay has bought Ticketbis, an online tickets marketplace. Whilst this alone is relatively unremarkable – eBay has been doing lots of ‘bolt-on’ acquisitions for years, a particular quote in the release caught my attention

“In a world where the richest moments in life are becoming less about the things people have and more about the experiences they have to share, the acquisition of Ticketbis will allow us to connect millions more people with inspiring events,” said Scott Cutler, President of StubHub

Whether you buy into the ‘sharing-economy’ or not, what is not up for debate is the fact that more and more services are moving online. And this market is essentially orders of magnitudes larger than physical goods we typically associate with ecommerce.

What we’re seeing with Airbnb, Uber etc is probably the tip of the iceberg. The future of ecommerce is physical goods plus services.

JD.com: Future World’s Largest Retailer?

If you don’t know about JD.com, think of it as China’s Amazon; a B2C ecommerce platform where you can buy just about anything. And now thanks to a fantastic analysis from Richard at Value Investor, you can learn just what they’re about today (and tomorrow).

The world’s largest middle class will create as many new retail giants in China and Asia at large as there are in North America and Europe combined. Despite the fact JD.com is already China’s largest B2C retailer, it still has enormous room for growth.

But the question for merchants outside China is going to be how can we take part? If you are selling to Asia (or more likely buying from) let us know what your future plans are for taking part in Asian ecommerce opportunity.

 

Re-evaluating Valuations

TechCrunch reports Rocket Internet – perhaps the most ambitious ecommerce play in terms of global operations and reach – has written down the valuation of it’s GFG fashion businesses.

On the heels of Alibaba investing in its Amazon clone Lazada, today the Berlin-based incubator announced that Global Fashion Group, the company’s unprofitable merged fashion businesses, raised €300 million ($340 million) “at least” (indicating there is actually a higher number that isn’t being disclosed).

What we learn with this news and previous Rocket Internet releases since they IPO’d that once again, ecommerce is a bear. Andy Dunn’s prescient essay correctly suggests that Rocket and indeed almost every other ecommerce bar Amazon and Ebay (and Alibaba) is struggling to generate cash.

It’s obvious that the economics of price are having a downward effect on pricing, regardless of the top line growth of most pure play ecommerce websites. Dunn’s remedy is still obvious; own your own proprietary brand or at least have some of proprietary merchandising in place.

So what’s the strategy for ecommerce in 2016 and beyond? Personally I still see ecommerce at the high-end (read luxury goods) doing well. But what I don’t see is low price/commodity ecommerce doing well despite the ongoing success of dollar stores and the like offline.

And what about the middle? Perhaps the toughest place to be in all of retail and it’s playing out right now with numerous established retailers biting the dust as well as employees being laid off everywhere.

What’s your ecommerce strategy? What do you think is working? Share in the comments.