Social network Facebook would love
Taobao evolves into a one-stop-shop app, doubles mobile revenue inMarch-June quarter
Alibaba Group Holding Ltd has tried to shake the perception that it’s just the eBay Inc or Amazon.com 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.