Alibaba grows Despite the Economic Slowdown



Online shopping in China has been feeling the slowing economy for quite some time. However, this does not seem to be affecting Alibaba in the same manner. While many businesses are lowering their prices and using sales tactics in order to attract more consumers, Alibaba is still reigning king via online shopping. For years, when Alibaba was mentioned, immediately a person thought of Taobao. However, that is not the case anymore. Tmall is growing and will continue to grow, and is the one way that the slow economy has not driven down Alibaba.

Taobao versus Tmall Earnings for Alibaba

When looking at the earnings for both companies, Alibaba did fairly well in the market. However, these earnings also signal a change in which platform more consumers are utilizing. For the quarter that ended on September 30th, Taobao had a total sales volume of around $69 billion. This was an increase of around 15% compared to the same quarter of 2014. Tmall only saw $43 billion during this same quarter. However, compared to the previous quarter in 2014, Tmall saw a 54% increase.

Learn more about Tmall here

For Alibaba, the increase in interest in Tmall is thanks to the fact that the company is bringing more Western brands to the Chinese consumers. Chinese consumers want quality products that are manufactured and created in areas that have high standards. For example, Alibaba has already signed Macy’s and Unilever with Tmall.

The Future for Alibaba

The economy may be slow for several businesses, and many people may be complaining about the loss of interest in purchasing products. However, Alibaba does not seem to be feeling any of this stress. The company has a goal of selling $385 billion by 2020, and it would seem like they are on track for achieving these goals. CEO Daniel Zhang stated:

“We are on track to achieve this.”

It would make Alibaba even bigger in the online shopping world. So how has the economic slowdown affected just how many consumers Alibaba is seeing? Alibaba has stated that they added around 19 million new actives buyers, which means that for the past year that have had 386 million active buyers. This is up from 367 million of last year. These are the numbers during a time of economic slowdown, which could mean that Alibaba can greatly increase this number once the economy picks up.

Alibaba’s Vice Chairman Joseph Tsai stated:

“A temporary setback in the macroeconomy won’t affect the consumption patterns in a fundamental way.”

And it would seem that Tsai was right. While other companies are finding that their business is not as successful these past few months, Alibaba is showing increase in not only products being purchased, but in new buyers coming to them for their needs and wants.

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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