The Chinese e-commerce giant will have $8 billion in cash after its IPO as well as valuable stock it can use for acquisitions. The ...
Imagine if eBay merchants could sell directly on Facebook or Twitter.
Imagine if eBay merchants could sell directly on Facebook or Twitter. That’s what’s starting to happen in China as a result of an alliance between Alibaba Group, China’s leading e-commerce company, and Sina Weibo, the country’s most popular social network.
The two companies began a test this week that lets three merchants that sell on Alibaba’s Taobao marketplace sell directly through posts on Sina Weibo. The retailer’s posts show the price, the merchant’s logo, its customer rating on Taobao, the product’s popularity and a button for sharing with other consumers.
“The new display design improves the efficiency of the message and avoids unnecessary searching on the Taobao site,” says Cheng Yu, general manager of the commercialization division of Sina Weibo.
One of the Taobao merchants participating in the test, food retailer Be & Cherry, used the new service Monday to post an offer for a fried green bean product. Only seconds later, the retailer received three orders from Weibo, two of them from mobile phones, the retailer says. In the first day of the test, traffic from Weibo accounted for 50.4% of the retailer’s online traffic, with most orders coming from mobile devices. In fact, the discounts boosted traffic so much so that visits from Weibo exceeded the merchant’s total traffic for the previous four days. Be & Cheery declined to release further sales details.
Besides Taobao, where some 7 million merchants sell, Alibaba also operates the Tmall online marketplace aimed at larger brands that want to reach Chinese online shoppers. Alibaba is No. 1 in the Internet Retailer Asia 500 rankings.
The linking of Taobao and the Sina Weibo social network, which combines elements of Facebook and Twitter, is Alibaba’s first major step toward taking advantage of its $586 million acquisition in April of an 18% stake in Sina Weibo. At the end of last year Weibo had over 500 million registered users who were posting 100 million short messages per day, with 75% of activity on mobile devices.
The alliance with Alibaba has led to concern among Weibo users that they may see too many offers that don’t interest them, and Weibo will have to keep that from happening, says Cheng Qu, CEO of Netconcepts China, an online marketing consulting firm. “To maintain healthy customers satisfaction, Sina Weibo has to control strictly how merchants send posts to users on Sina Weibo,” he says. Sina Weibo has promised it will limit the number of posts from merchants with low consumer ratings.
A Taobao-friendly version of Weibo, China’s most popular microblogging service, will soon be available, the first concrete manifestation of closer ties between Taobao’s parent, Alibaba Group, and Weibo owner Sina Corp.
The new product, which will begin to be rolled out on Aug. 5, is designed to make it simpler for Weibo users to shop via Taobao Marketplace using their mobile phones. Taobao merchants are also being offered improved marketing and management tools for selling their products via Weibo.
Features include the integration of Taobao and Weibo accounts systems so that users can use their login information from either platform to log onto both. There will also be a new display interface for Taobao products on Weibo, based on a virtual “name card” detailing product price, store credit rating, popularity of the product as well as a Buy button for direct order placement.
Taobao merchants will be able to add a software module to their existing store-management program allowing them more easily upload products and product information to Weibo. A data center will also be available to help sellers analyze the effectiveness of their Weibo promotions.
The tighter integration of Weibo and Taobao is the first fruit of a strategic alliance between China’s largest social media platform—Weibo has more than 500 million registered users—and Alibaba, the country’s largest e-commerce company.
Alibaba, which like many Internet companies is rushing to adapt to rapid growth of the mobile Internet, agreed in April to spend $586 million for an 18 percent stake in Weibo, with the right to increase its holding to 30 percent. When the investment was announced, Alibaba and Sino officials vowed to work together in a variety of areas including data exchange, social e-commerce, mobile advertising and electronic payments.