Alibaba considers online services for mobiles
Alibaba, which controls China's largest business-to-business marketplace, plans to make internet services that include the country's largest online auction site available to mobile-phone users amid concern over government plans for the sector.
'Last year, mobile was too hot,' said Jack Ma, founder and chief executive of Hangzhou-based Alibaba. 'So, after we acquired Yahoo, I closed down the mobile division. This year it is not that hot. The service providers are in trouble. It is time to do something.'
China Mobile, the country's dominant mobile operator, in July announced under government pressure a series of policies aimed at protecting users of mobile value-added products, such as requiring double confirmation from customers before they can subscribe to new services. The move caused many service providers to issue profit warnings.
Tom Online, the largest service provider by revenue, said third-quarter revenue could decline between 31 per cent and 35 per cent from the previous quarter. Profitability could fall even more significantly, it said.
Even so, mobile-related services offered potential, Mr Ma said.
That potential was evident before the recent curbs. The total mainland market size of mobile valued-added services, such as short messaging and ringtones, grew 44 per cent to 48.3 billion yuan last year, according to Beijing market research firm Analysys.
Mr Ma said many of his business units are thinking of offering mobile services, including online auction site Taobao, the online payment division Alipay, and Alibaba, the business-to-business marketplace.
'We are thinking of the right strategy. It can be either partners or acquisitions,' Mr Ma said. 'We have the required licences.'
He declined to indicate a timeframe or budget for the moves.
Mobile search is not part of Mr Ma's plans, although Yahoo China is keen to be a leader in search-engine services, he said.
China Mobile is in talks with Google, the world leader in search engines, for mobile search services, the phone operator's chief executive Wang Jianzhou said this month.
Meanwhile, Alibaba, which competes with Nasdaq-listed Global Sources and Growth Enterprise Market-listed HC International for the lead in the business-to-business marketplace, plans to expand beyond the mainland, Mr Ma said.
Such a move will bring it into further competition with Global Sources and HC International, in which Global Sources has a 10 per cent stake. The two companies plan to merge in the middle of next year, they said last month.
'In 10 years, Alibaba wants to be one of the top three internet sites in the world, not just in China,' he said.
Earlier approaches by Chinese companies to grow globally were wrong, he said.
'The last generation of Chinese companies were not born for global growth,' Mr Ma said. 'They wanted to sell cheap things - competition on price - going to such extremes as buying dying firms. This is not the way.
'Globalisation means creating jobs and value locally. Globalisation means finding local people and building a local operation. Alibaba in India can be very different from Alibaba in China, as long as people like it.
'Our generation is different. From the start, Alibaba knew it had to grow globally. We hire people globally,' he said.
Privately held Alibaba said it expected sales of more than US$200 million this year from more than US$100 million last year.
