Alibaba chief Jack Ma confident on mobile push
Jack Ma is counting on Weibo collaboration, and a little luck, to broaden e-commerce reach
Alibaba Group chairman Jack Ma Yun has expressed confidence that his company will boost its mobile expertise to expand e-commerce activity across the mainland and stay competitive against Tencent, the country's largest internet company.
But Ma acknowledges that Alibaba, the country's top e-commerce services provider, "needs some luck" to reach that objective. "Luck takes time," he said.
The opportunity for mobile e-commerce is huge, with the mainland's 1.15 billion total mobile subscribers at the end of March. By comparison, there were 242 million mainland internet users who shopped online last year.
On Monday, Hangzhou-based Alibaba forged a strategic alliance that could help shorten its learning curve in the mobile space and quickly raise its profile to a vast new audience.
Alibaba, through a wholly owned subsidiary, agreed to invest US$586 million and take an 18 per cent stake in Weibo, the Twitter-like microblogging service with more than 503 million users. It is owned by Nasdaq-listed Sina, a leading online media company based in Shanghai.
The two companies will initially co-operate in the areas of user account connectivity, data exchange, online payment, online marketing, search and mobile internet services. They will also explore new business models for social e-commerce based on the interactions of the hundreds of millions of users on Weibo and on Alibaba's various e-commerce platforms.
Their alliance is expected to generate about US$380 million in advertising and social e-commerce services revenue for Weibo over the next three years. Alibaba has an option to increase its shareholding to 30 per cent.
"This is a game-changer for Alibaba," said Kitty Fok, the general manager of technology researcher IDC China. "Integrating social media to the Taobao online shopping platforms and Alibaba's vast business-to-business service would not only increase their user base on the mainland, but around the world."
The Weibo collaboration also ensures that Alibaba carried, more or less, the same "firepower" as Tencent, based on a recent analogy by Ma. At the Credit Suisse Asian Investment Conference in March, he said Tencent and Alibaba represented "the only two aircraft carriers" in China's internet industry.
Tencent, which is also the mainland's leading online gaming provider, competes against Sina's Weibo with its Tencent Weibo service. It also has its WeChat social mobile application available outside the mainland, TenPay online payment and PaiPai, an e-commerce platform.
With Alibaba's Weibo alliance, Ma said the mobile internet was now also "a core part of our strategy".