Hey big spender - Alibaba confers elite status on 100,000 super users of its Taobao, Tmall sites
More than 100,000 users of Taobao and Tmall have been conferred ‘Alibaba Passport’ holders - as they spend an average of US$45,000 collectively on the online shopping sites every year
Among the 500 million monthly active users shopping Alibaba’s online platforms Taobao and Tmall, a very small group at the top of the spending pyramid have been quietly classified with a unique status.
The group, made up of roughly one out of every 5,000 users, are rendered “Alibaba Passport” holders, with the label “APASS” appearing on their user profile.
The membership programme has maintained a low profile since its launch in 2014, as Alibaba has never publicly unveiled its selection criteria.
More than 100,000 users are classed as APASS members as they spend an average of 306,000 yuan (US$45,000) on Taobao and Tmall every year, according to Alibaba data. Minimum spending on the two platforms among APASS members still exceeds US$15,000 yearly.
There are also APASS members in Hong Kong, where a third of the city’s more than 7 million residents are Taobao members, according to Alibaba.
An Aliresearch note has drawn an even clearer picture of the APASS membership. About 60 per cent of APASS members are well-educated, born between 1980 and 1989. In terms of income, about 60 per cent have monthly household earnings above 50,000 yuan (US$7,353) after tax. Females make up 60 per cent of the APASS members. Of the entire APASS membership, 90 per cent channel the majority of their discretionary spending online.
APASS members can be broadly divided into the categories of business leaders, young entrepreneurs, engaged millennials, and young families.
Hong Degang, 28, owns a workshop studio in Wuhan, Hubei province that designs and produces advertisements for companies. The young entrepreneur, a self described “super fan” of electronics products, spends about 500,000 yuan a year on Taobao and Tmall, and has been invited as an APASS member since 2015.
Hong says for the first six months of this year his spending has already exceeded 300,000 yuan.
Hong says he shops online as the most up-to-date products are often available on e-commerce platforms before they appear in brick-and-mortar shops.
“Most of the time when I walk into an electronics shop in Wuhan for the latest computer accessory, it is either unavailable or the salesman has no idea what I am talking about,” Hong said.
When shopping online, Hong said he often discovers rarely-seen products and frequently asks for customised services.
Alibaba has been trying hard to keep consumers on its two e-commerce platforms, the consumer-to-consumer Taobao and business-to-consumer Tmall marketplaces. Other established players, including JD.com and Amazon, are also gearing for a battle in the fast growing marketplace, where in 2016 the gross merchandised volume (GMV) of online shopping surged by 23.9 per cent to 4.7 trillion yuan.
The research agency iResearch in February estimated that the GMV of online shopping in China will expand 19.1 per cent from this year to reach 7.3 trillion yuan by 2019.
JD.com, backed by Chinese technology giant Tencent, the second biggest e-commerce company after Alibaba, reported revenue for the fourth quarter ended December 31, 2016 reached 80.3 billion yuan, beating its forecast of 75 billion yuan to 77.5 billion yuan.
Last year JD.com’s active users surged by 46 per cent to 226.6 million.
But unlike Amazon which requires users to purchase their Prime membership, or JD.com which confers “Diamond Membership” status by offering cheaper prices and better customer service, Alibaba has organised its APASS programme as a private club. Benefits include private gatherings for members or even overseas trips paid for by high-end brands.
In the second half of 2016, Alibaba organised an all-expenses-paid vacation to Italy and France for two groups of APASS members. The tours visited wineries, luxury automotive factories as well as luxury cosmetics and fashion boutiques.
In March this year, seven APASS members were selected to join a luxury tour to Australia, which was partially live-streamed on social media platforms such as Weibo and Youku.
“High-end brands including cosmetics, cars and apparel have paid great attention to APASS members,” said Yan Zhenzhen, head of the APASS Program.
Alibaba is also trying to broaden its APASS base by lowering the level of expenditure to qualify. It recently launched a new measurement called “Tao Qi Zhi”, a comprehensive calculation based on a user’s purchasing power, engagement to the platforms, credit records and other factors.
Those whose “Tao Qi Zhi” score is above 2,500 will have a chance to be invited as an APASS member, according to Yan.
According to a wealth report released by Bain Consulting and China Merchants Bank in June, the number of high-net-worth individuals in China who own more than 10 million yuan in investable assets will reach 1.87 million this year, up 18 per cent from a year earlier. Total assets they possess have also increased by 19 per cent to 58 trillion yuan, according to the report.
Alibaba is the owner of the South China Morning Post