So­cial net­work Face­book would love

Taobao evolves into a one-stop-shop app, dou­bles mo­bile rev­enue in­March-June quar­ter

China Daily (Canada) - - BUSINESS - By BLOOMBERG

Alibaba Group Hold­ing Ltd has tried to shake the per­cep­tion that it’s just the eBay Inc or Inc of China, by push­ing into so­cial media and en­ter­tain­ment and ac­tively in­vest­ing in star­tups like Snapchat Inc.

Chair­man Jack Ma’s sprawl­ing pur­suits are start­ing to pay off. Alibaba’s Taobao mo­bile app is a riot of tiny print and icons that al­low users to join a chat group for fish­ing enthusiasts, book a trip and buy a new rod. The one-stop-shop for­mat has res­onated with China’s young users, who are spend­ing longer on the site than vis­i­tors to Amazon or Twit­ter Inc’s mo­bile sites, and has helped more than dou­ble mo­bile rev­enue in the most re­cent quar­ter.

“To cap­ture the at­ten­tion and imag­i­na­tion of young peo­ple you have to pro­vide more so­cial fea­tures,” Alibaba’s co-founder and Vice-Chair­man Joseph Tsai said. “We want to con­tinue the sense of com­mu­nity so that they’ll come back and en­gage with the plat­form.”

Alibaba started Taobao in 2003 as an eBay-like site for small busi­nesses and en­trepreneurs to sell di­rectly to con­sumers. In the past few years, it has added so­cial and en­ter­tain­ment fea­tures to keep peo­ple on the app longer, in­creas­ing the chance they’ll buy prod­ucts. The strat­egy worked.

Monthly mo­bile ac­tive users in­creased 39 per­cent to 427 mil­lion and mo­bile rev­enue jumped to $2.6 bil­lion in the June quar­ter. Peo­ple visit the app more than seven times a day for more than a to­tal of 25 min­utes. That com­pares with about nine min­utes on Amazon’s mo­bile app and 16 min­utes on Twit­ter’s app on days when users visit.

“Amazon doesn’t get peo­ple on the web­site seven times a day,’’ said Gil Luria, an an­a­lyst at Wed­bush Se­cu­ri­ties Inc. “The level of en­gage­ment Alibaba’s able to cre­ate is more than what we’d con­sider with search com­pa­nies and so­cial com­pa­nies. They’re in­vest­ing a lot into mak­ing their tools have so­cial en­gage­ment like Face­book.”

Taobao users can join one of its 1,000 spe­cial in­ter­est groups to chat about top­ics from wed­ding plan­ning to sports to baby show­ers. Last year, the site started a pro­gram to get blog­gers and ex­perts to post con­tent by of­fer­ing them a com­mis­sion for mak­ing prod­uct rec­om­men­da­tions.

Alibaba also re­cently rolled out the Taobao news feed that’s grown to more than 1,300 media out­lets that pro­vide con­tent to its 80 mil­lion­plus monthly ac­tive users. A few months ago, Taobao added video live-stream­ing for blog­gers and mer­chants to in­ter­act with con­sumers.

Tsai said that more so­cial fea­tures will be added to Taobao, but only ones that will lead to more sales. Users may not make a pur­chase every time they openTaobao, but the ac­tiv­i­ties pique their in­ter­est in po­ten­tial mer­chants, whether that’s watch­ing a live broad­cast with a Chi­nese celebrity test­ing out new makeup or par­tic­i­pat­ing in a spe­cial in­ter­est group dis­cussing fish­ing prod­ucts.

“We’re al­ready at the holy grail point where our users have very high de­sire to buy things and they’re very com­mer­cially minded,” Tsai said. “On Face­book you’re friend­ing all of your friends be­cause you al­ready know each other. In our case, we start with strangers but then use data to find a com­mon­al­ity of in­ter­est and cre­ate a com­mu­nity around that in­ter­est.”

In re­cent years Face­book has also been search­ing for ways to con­vince its users to shop on the so­cial net­work, try­ing dig­i­tal store­fronts, birth­day gifts and a “buy” but­ton. It too is test­ing a shop sec­tion for busi­nesses to sell di­rectly from their Face­book page. Pin­ter­est Inc and Twit­ter have in­tro­duced ways to buy prod­ucts from their sites as well.

Amazon hasn’t made any ma­jor in­roads in ad­ding life­style fea­tures to its e-com­merce site, though the com­pany in­vests in rou­tine so­cial media pro­mo­tions. Seat­tle-based Amazon’s big­gest so­cial media push was in 2014 with its $970 mil­lion ac­qui­si­tion of Twitch In­ter­ac­tive Inc, an on­line fo­rum that lets users dis­cuss gam­ing and watch oth­ers while they play.

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