Alibaba’s Digital Marketing Strategy

ABOUT

Alibaba Group Holding Limited (also known as Alibaba Group and as Alibaba.com) is a Chinese multinational technology company specializing in e-commerce, retail, Internet, and technology.Learn Alibaba’s Digital Marketing Strategy to become one of the top 10 most valuable corporations in the world & takeaways for other companies.

WHAT IS ALIBABA?

Founded on 4 April 1999 in Hangzhou, Zhejiang, the company provides:
· consumer-to-consumer (C2C)
· business-to-consumer (B2C)
· business-to-business (B2B)

As well as

· Electronic payment services
· Shopping search engines
· Cloud computing services.

It owns and operates a diverse array of businesses around the world in numerous sectors.

With three main sites — Taobao, Tmall and Alibaba.com — and hundreds of millions of users, Alibaba handles more business than any other ecommerce company.

HISTORY OF ALIBABA

Alibaba Group was established in 1999 by 18 people led by Jack Ma, a former English teacher from Hangzhou, China.

From the outset, the company’s founders shared a belief that the Internet would level the playing field by enabling small enterprises to leverage innovation and technology to grow and compete more effectively in the domestic and global economies.

Since launching its first website helping small Chinese exporters, manufacturers and entrepreneurs to sell internationally, Alibaba Group has grown into a global leader in online and mobile commerce.

Today the company and its related companies operate leading wholesale and retail online marketplaces as well as businesses in cloud computing, digital media and entertainment, innovation initiatives and others.

It owns and operates a diverse array of businesses around the world in numerous sectors.

With three main sites — Taobao, Tmall and Alibaba.com — and hundreds of millions of users, Alibaba handles more business than any other ecommerce company.

ALIBABA TIMELINE

A timeline of how Alibaba grew
  • 1999: The company was founded by Jack Ma and 18 partners in Hangzhou, China.
  • 2000: The company raises $25 million in funding from Goldman Sachs, (GS) – Get Report Softbank (SFTBY) and Fidelity Investments, among others.
  • 2002: Alibaba turns its first-ever profit.
  • 2003-04: Alibaba rolls out Taobao, its consumer e-commerce site, and launches Alipay, its online payment system.
  • 2007: Alibaba is listed on the Hong Kong stock exchange.
  • 2009: On its 10th anniversary, Alibaba introduces its new cloud computing platform.
  • 2010: Ray-Ban and Gap (GPS) – Get Report open online stores on Alibaba’s Taobao Mall, opening a new path to profit for U.S. businesses doing business in China.
  • 2013: Jack Ma steps down as CEO of Alibaba. He is succeeded by Jonathan Lu, Ma’s hand-picked successor.
  • 2014: Alibaba grows to become the largest online commerce platform for small businesses. The same year the company goes public, with a $25 billion IPO and a new trading price of $68 per-share — besting big technology stalwarts like Facebook (FB) – Get Report and Google (GOOGLE) – Get Report .
  • 2016: Scandal and controversy shroud Alibaba, as the company is tied directly to the sale of illegal, fraudulent products. The U.S. government fuels the fire by labeling Taobao as a counterfeit e-commerce platform.
  • 2018: Alibaba rebounds from scandal as Taobao crests 580 million active monthly users and Tmall hits 500 monthly users. The same year, Jack Ma announces that he will step down as chairman of Alibaba in 2019.
  • 2019: Jack Ma makes good on his pledge to walk away from Alibaba.

CURRENT SITUATION

  • Jack Ma is succeeded by Daniel Zhang, now the current chief executive officer at Alibaba.
    Alibaba is smashing new e-commerce records.
  • Its mobile user base had grown to 1.1 billion. While revenues had grown by 42%.
  • The site now boasts 674 million active monthly users and represents (as of year-end 2018) 60% of the entire Chinese e-commerce market.
  • Its employee base had grown to 86,000 staffers worldwide and the company is delivering 57 million packages a year via its Cainiao Network.
  • The company’s stock price is experiencing robust growth as a result. It’s currently trading at $176 with a sturdy market cap of $458 billion.
  • Wall Street analysts expect share price growth to continue, with an average analyst consensus calling for BABA stock to rise to $222 per-share within a year’s time.
  • Even though Jack Ma is no longer calling the shots, Alibaba continues to thrive as one of the world’s largest online commerce marketplaces, and should do so for years to come. That more than fulfills the founder’s vision of an e-commerce platform for the Chinese populace — and make no mistake, Alibaba has achieved that goal and then some in just 20 years in business.

HOW DID THEY DO IT?

Before discussing how they did it, it will be helpful to know what was Alibaba’s TARGET MARKET and What was the Opportunity in China’s Advertising Market for Alibaba?

TARGET MARKET:

Alibaba’s Target Market include:

  • Small businesses
  • Product suppliers
  • Brand owners
  • Individual Business men
  • Medium size enterprise
  • English Speaking population
  • Asian market

Alibaba Group has launched a powerful new suite of marketing services that leverages data collected from the company’s 450 million active users to deliver a level of targeting and reach not yet seen in the China market to brands selling on its e-commerce platforms.

What was the Opportunity in China’s Advertising Market for Alibaba?

China is Alibaba’s (BABA) home market, and the company derives the majority of its revenue from the country. Alibaba is lucky to call China home, as China is one of the world’s largest and fastest-growing digital advertising markets.

  • Almost $80 billion were up for grabs in China’s digital advertising market in 2019.
  • Digital ad spending in China increased by 22% in 2019 to top $79.8 billion and accounted for 69.5% of the country’s total media advertising spending,
  • China’s digital advertising market is projected to grow to $134.3 billion by 2023 and account for 78.8% of the country’s total media advertising spending.

The unimarketing plan

Alibaba Group has launched a powerful new suite of marketing services that leverages data collected from the company’s 450 million active users to deliver a level of targeting and reach not yet seen in the China market to brands selling on its e-commerce platforms.

• Alibaba created a set of tools that aggregates and analyzes the data so brands can better identify, target, reach and retain their customers.
• By combining its massive data assets, businesses can identify, segment and build tailored content for the best results
• By revolutionizing data-driven marketing, Alibaba is evolving into a more strategic and sustainable brand-building platform.

Chief among the Uni Marketing tools that Alibaba will offer is what the company calls its “Brand Databank.

  1. It’s an online dashboard that shows brands how many consumers are interested in their products and where they are in that product life cycle.
  2. The Brand Data Bank will also track the success of the different campaigns offered by Alibaba, whether they are the 11.11 Global Shopping Festival, SuperBrand Days, live-streaming broadcasts or advertising placed on different sites in the company’s ecosystem.
  3. By analyzing this information, brands will know what works when they attempt to reach consumers. Then they can act on that information to generate new, more accurate marketing campaigns in the future.

Uni Marketing would “transform the way businesses do marketing” and help to address “critical challenges around customer targeting, relevant communication and return on investment.”

HOW ALIBABA = GOOGLE + FACEBOOK + AMAZON?

Retailers targeting the China market can build their brands, broadcast their messaging and sell to consumers all through Alibaba Group, according to a research report from Morgan Stanley, creating a one-stop solution that no other internet company—not Google, not Facebook, not Amazon–currently offers to merchants.
Unlike its global peers, Alibaba has businesses that connect the entire value chain of digital marketing and digital commerce.
Alibaba is “a beneficiary of a much larger addressable revenue pie” as it “helps its merchants to enhance distribution, marketing and productivity efficiency,”
In the U.S., a merchant targeting the U.S. would need to hire Google, Facebook and Amazon to get the same branding, broadcasting and selling services.

• Google’s YouTube and Facebook offer branding and brand communications.
• Google’s AdWords is used for online marketing.
• Amazon is the most popular e-commerce sales and distribution platform in the U.S.

Whereas, Alibaba is unique because its e-commerce sites are part of a larger E-commerce media ecosystem that allows merchants to increase their brand power in China and better engage with consumers
Whether it’s through content such as live-streamed talk shows or online communities of like-minded shoppers on Taobao, merchants are forming stronger bonds with their customers and, ultimately, increasing sales.
Alibaba’s heavily trafficked internet properties and partners include online shopping sites such as

• Taobao Marketplace and Tmall.
• Entertainment sites such as video hub Youku Tudou .
• Information portals such as UC News Feed and search engines such as mobile search provider Shenma.

All are “interconnected, highly complementary and synergistic.

Alibaba’s goal is to reach 100 percent of China’s internet users. To do that, the company is

  • expanding its product and service offerings through acquisitions, investments and partnerships
  • Developing the products and services itself.

Alibaba wants users to spend more time on its sites, so it’s building online communities and leveraging content to do so.
The link between all of these initiatives is data. As consumers use Alibaba through the day, the company is collecting information on their

  • shopping habits
  • payment and credit histories
  • search preferences
  • social networks
  • logistics needs
  • internet interests

Which “allows them to understand the real-time needs of their consumers”
Alibaba currently has data on 500 million people thanks to its “unified ID” feature, which tracks users across not only its internet properties but different devices as well. In addition, the company uses more than 8,000 different consumer labels related to gender, geographic location and various shopping preferences to allow for better categorization and targeting of those consumers.
All these factors make Alibaba greater than Google, Facebook and Amazon combined.

CAMPAIGNS USED BY ALIBABA

11:11

Also called Single’s Day, by Chinese younger generation, because the date is composed of four ‘1s’ that are supposed to represent four singles. A lot of events are organized on this special date to help the lonely hearts to find a partner.
In 2009, Alibaba the Chinese e-commerce giant decided to launch a shopping festival on the same date. Which is China’s equivalent to Black Friday and Cyber Monday.

Event Details

• The online event involves promotions up to 70% for local brands as well as for foreign brands. Eg: NIKE and TESLA

• The retail giant said that dozens of brands, including Apple, L’Oreal and Dyson, had received more than 100 million yuan, or $14 million, in pre-orders.

• Alibaba sold goods worth 268 billion yuan, or $38.4 billion on 11/11/19, easily exceeding previous year’s record $30.7 billion haul.

• Electronics gadgets and fashion items were among the most sold goods in the 11th edition of the Singles’ Day annual event.

• Alibaba Group netted its first $1 billion in sales in just 68 seconds and first $10 billion in half an hour.

• To bridge people in China and those living elsewhere, Alibaba also maintains a number of dedicated websites.

  1. AliExpress sells goods from Chinese brands to international residents;
  2. Tmall sells goods from global brands to China;
  3. Taobao sells Chinese brands’ goods to people in China.
  4. Lazada, a subsidiary of Alibaba Group that caters to Southeast Asian markets, saw the number of buyers and merchants double this year.

LIVE STREAMING:

  • The shopping glitz in Double 11 campaign hosted a number of celebrities, including Taylor Swift  and Asian pop icon GEM, to generate buzz. 
  • Last year, the Hangzhou-headquartered firm also focused on live-streaming via its platform, a phenomenon that has gained significant traction in China.
  • In a live-streamed video, Kim Kardashian  announced last week that her fragrance brand KKW will be sold on Tmall this Singles’ Day
  • Like Alibaba, JD.com and Pinduoduo also host similar campaigns each year.
  • This model has also been replicated by Amazon and Walmart -owned Flipkart  in India, Qoo10 in Singapore and 11th Street in South Korea.

This milestone should help Alibaba win some more confidence from shareholders when it begins selling shares worth $15 billion in Hong Kong later this month.

OLYMPIC ADS:

Alibaba Group has launched its first global advertising campaign for the Olympic Winter Games PyeongChang 2018. According to reports, Alibaba said a year ago that it would be an Olympics sponsor until at least 2028.

Reportedly, this will be the Chinese e-commerce giant’s first corporate advertising campaign outside China , and the first that features the brand Alibaba itself. 

The campaign

“To the Greatness of Small,” features commercials that illustrate how one small action can touch millions of people, how small moments of character can inspire the world, and how the underdog can achieve great things

  • One of the ads features the Kenyan ice hockey team, which Tung said Alibaba would bring to Korea even though they will not be competing.
  • Another vignette is of Australia’s Bobby Pearce, who stopped during an Olympic rowing race in 1928 to make way for a family of ducks.
Alibaba pays a tribute to the underdogs in the Olympics Games capturing the spirit of the brand as well.

TAKEAWAYS FOR OTHER COMPANIES :

Exercise the takeaways mentioned below using Digital Marketing and model the business structure keeping in mind these takeaways.

  • The content-centric approach of brand publishing.
  • Reinvent the Enterprise.
  • Keep resetting the vision.
  • Experiment with business models.
  • Focus on seizing and shaping strategic opportunities, not on executing plans.
  • Get good at adapting the organization.
  • Build systems that support fluidity and feedback.

Did you find the information in the above post helpful? do let me know in the comments section below. Want to learn more about digital marketing strategy or get a professional opinion? Get in touch with me.

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