E-COMMERCE
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Alibaba

Start-ups offered fresh funds by Alibaba to create more apps for China's growing e-commerce market

PUBLISHED : Friday, 17 July, 2015, 9:16am
UPDATED : Tuesday, 25 August, 2015, 10:26am

E-commerce powerhouse Alibaba Group has set up a 1 billion yuan (US$163 million) fund to help accelerate efforts by Chinese software start-ups to develop smartphone applications for new on-demand local services.

Alibaba affiliate Ant Financial Services Group, which operates the popular Alipay online payments system, will also provide another 1 billion yuan in low-interest loans to the entrepreneurs.

The two initiatives are part of the Shengyi 1.0 programme unveiled on Thursday at Alibaba’s software developers conference held in its home city of Hangzhou.

This programme also includes staging a series of training workshops for developers several times a year, according to a report by the company’s Alizila corporate news site.

Alibaba hoped the development programme would foster the wider use of its technologies, such as online payment and location-based services, in a new generation of mobile apps.

“Diversity is the charm of the mobile internet and it means great opportunities,” Alibaba chief executive Daniel Zhang Yong said.

“I have seen lots of mobile applications recently, from raising pets to online groceries to seeking babysitters. Each app is recreating a scenario and reshaping the value chain. You can hardly adopt a single business standard or service type to define e-commerce today.”

As the world’s biggest market for smartphones and having the fastest rollout of 4G mobile networks, mainland China has seen its consumers rapidly adopt apps for a host of local services like booking taxis, ordering take-out lunches and buying movie tickets.

Shengyi 1.0 would encourage apps developers to extend those local services to include, for example, adding a consumer-credit component. Ant Financial recently launched a credit-scoring system called Sesame Credit.

One app featured in the Alibaba developers conference was Aiqianggou, which translates to “seeking bargains”, that was introduced 28 months ago. A user can identify special promotions at nearby stores and pay for merchandise with their smartphones. In addition, a user can share the information on bargains with friends through social media to qualify for special discounts.

That app uses the location-based services supplied by Alibaba’s AutoNavi subsidiary as well as online transaction and payment systems, customer-relationship management system and various services that enable so-called online-to-offline (O2O) e-commerce activities.

Shengyi 1.0 is part of a larger Alibaba programme called Baichuan that was established last year to support mobile app developers.

More than 10,000 app developers have joined Baichuan, according to Alibaba. Some 600 apps have been launched under this programme, which has achieved 115 million total downloads to date.

Alibaba vice-president Wang Xiruo said on Thursday that the business model for stand-alone shopping websites has become “outdated in the era of the mobile Internet”.

Wang said Alibaba expected the e-commerce industry to nurture the development of specialised mobile apps to “tap into niche markets and meet local users’ needs”.

Last month, Alibaba and Ant Financial committed investments worth nearly US$1 billion into an O2O joint venture called Koubei in line with efforts to promote the use of apps for local services.

This venture will initially target the market for ordering meals online from local restaurants. That will entail Alibaba’s transfer of its existing food ordering and delivery business, called Taodiandian, to Koubei.

Over time, Ant Financial’s merchant services in the areas of offline retail, healthcare and vending machines will be absorbed by the venture.