What’s so Magical About Alibaba? Should Internet Marketers Care?
Alibaba is a Chinese company that has successfully captured the largest marketplace in the world.
What is Alibaba?
- China’s biggest online commerce company
- Features three main sites: Taobao, Tmall, and Alibaba.com
- Taobao is China’s largest online shopping site
- B2B company that connects businesses to their target consumers
- Created by former teacher, Jack Ma
- Transactions on its online sites totaled $248 billion last year
- Alibaba’s IPO (Initial Public Offering) is the largest in U.S. history
On the outside, Alibaba may seem like you’re run of the mill website for businesses and consumers. In actuality, the company handles more global-business than any other. Out of the three respective websites of Alibaba, all of them have hundreds of millions of users, and host millions of merchants and businesses. By Alibaba’s corporate appeal and usage by most of the Chinese population through their B2B e-commerce website, the company has successfully captured the world’s largest marketplace.
Alibaba works as an Internet corporation involved with a plethora of Internet businesses. As the middleman, Alibaba brings the consumer closer to the business, and vice versa, for a more accessible marketplace. Unlike Amazon or EBay, Alibaba does not sell or ship orders to customers. Instead it functions like an Internet bazaar for all businesses to advertise and attain customers through the site.
Because Alibaba has a huge Eastern-Asian customer base, the amount of business that flows over its sites dwarfs that of other e-commerce companies. China’s population is about 1.3 billion people. America’s population is about 317 million people. Through Alibaba’s highly concentrated consumer base, the company is able to reach out to three times as many people than American corporations.
Alibaba recently held their 11/11 sale in which they sold a staggering $9.3 BILLION in a 24 hour period, in which 43% of those purchases came via mobile.
Alibaba is Going Global
After Alibaba’s success in raising $21.8 billion from its United States IPO, it became one of the most valuable public Chinese companies. While Alibaba is one of the largest businesses at the moment, the company earns less revenue in comparison to its global competitors. Ebay, Amazon, and Google make billions more in revenue than Alibaba. However, Alibaba’s popularity stems from the company having largest network of consumers and customers in the world. The company earns its money through small transaction costs between business and consumer. Otherwise, the revenue and products trade directly between the businesses and consumers. Alibaba facilitates these trades so that its customer’s have the most accessible items for the best price.
Through Alibaba’s initial achievement and mounting popularity, its IPO is now the third largest in history.
After dominating the Chinese market, Alibaba is transforming itself into an international powerhouse. The company’s market-base is significant enough to have U.S investors planning to buy shares of a company they are unlikely to have experienced. Despite western-nation’s unfamiliarity, many western businesses hope to gain a piece of China’s technological future through Alibaba’s shares. With Alibaba now participating in the New York Stock Exchange, western customers are more likely to find interest in this growing company.
Marketing and Alibaba’s role in the marketplace
While Alibaba is an extremely successful Chinese company, many within the Western world are unaware of the company’s existence. In order for Alibaba to better acquaint itself to western culture, the company is rumored to be planning mobile marketing, creating targeted social media campaigns, and continuing to branch out their services.
Through a successful mobile market, Alibaba could not only reach the largest mobile marketplace in the world, but also attain international recognition and revenue from many different countries and markets. Companies with mobile-specific sites are 51% more likely to achieve purchases, than if their competitors have a functional mobile site. Along with a mobile site, and mobile marketing, Alibaba will be more accessible to western markets. Through a concise, clear, and easy to find mobile marketing campaign, Alibaba can effectively expand into a new market.
By developing a western social media campaign, Alibaba would have efficient and popular platforms to spread the word. Through the different channels these social media platforms offer, Alibaba could develop building anticipation about their services arriving in America, Canada, England, etc. Thereby, raising their company’s interest, social value, and disseminate information to prospective clients for Alibaba’s arrival.
Along with new prosperous marketing campaigns, Alibaba should continue their plan to expand their business. Advancing its e-commerce, Alibaba is planning to become a site for all commerce needs. The company prepares to diversify its market by offering selling services.
Alibaba could not only be a thriving material marketplace, but a service based one as well. Selling services would place Alibaba on the map for almost anything a consumer could want. This is already something that Amazon is soon to be rolling out. Adding services to Alibaba’s repertoire would fulfill more consumer need.
The Chinese company is breaking into the international market as a major power. Through Alibaba’s acquired influence, western markets anticipate the unfamiliar company’s arrival. By participating in digital marketing, Alibaba is set to make a smashing debut out of its international success and expand its already tremendous international consumer outreach.
What this means for Digital Marketers
Just like Amazon is continuing to alter the way that B2B and B2C companies are selling to their customers and causing Brick & Mortar companies to close, Alibaba will just hasten that progress. By easily connecting suppliers and consumers, Alibaba will do for B2B what Amazon already did for the B2C market with direct to consumer shopping.
Forward thinking Digital Marketers will begin to understand Alibaba’s role in the West as they continue their expansion. Much like Amazon is its own unique algorithm, Alibaba will offer new challenges to ensure that your products rank well for your targeted terms.
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