Alibaba introduces low price Gold Supplier
Alibaba.com, the largest business-to-business e-commerce website on the mainland, has introduced a low-price version of its premium membership in the face of the economic downturn.
Many existing customers are expected to switch to the new starter pack, which costs 60 per cent less.
'[Alibaba] is allowing current [Gold Supplier] members to switch membership to the lower-price starter pack upon expiration of existing membership,' said Alan Hellawell, an analyst at Deutsche Bank.
The starter pack costs 19,800 yuan (HK$22,433) a year, compared with 50,000 yuan for Gold Supplier, Alibaba's premium membership, but offers most of the basic functions. The company plans to reintroduce the Gold Supplier membership at the same price but with more value-added services.
The Hangzhou-based company has derived more than 60 per cent of its revenue from selling Gold Supplier memberships to mainland exporters. But as the economic downturn has hurt mainland exporters severely, new paying Gold Supplier memberships have dropped significantly, from more than 3,000 a quarter at the end of last year to a likely level of 500 in the third quarter, Mr Hellawell estimated.
The company aims to have 70,000 to 80,000 paying members in two years, up from the existing 30,000, Richard Ji, an executive director of Morgan Stanley, said.
Alibaba plans to spend US$30 million on a marketing campaign next year to attract global buyers.
The company is also introducing a quality supplier programme. To counter claims of fake goods, it plans to delist products and terminate the accounts of those members who have repeatedly violated others' intellectual property.
Shares in Alibaba.com dropped 4.41 per cent to HK$4.34 yesterday, compared with a 2.69 per cent rise in the benchmark Hang Sang Index.
