Will GoPro Grow on Alibaba

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GoPro

GoPro (ex Woodman Labs, Inc) manufactures lightweight, compact and rugged camcorders for American consumers who fancy shooting extreme action videos while wearing them attached to their bodies, or mounted on their vehicles. Its main competition is Sony, Garmin, Xiaomi, Panasonic and Toshiba. Now it is hoping to penetrate China deeper on Alibaba’s Tmail online marketplace.

Part of a Bigger GoPro Expansion Plan

GoPro announced its intentions earlier this year following a successful IPO in 2014 with an expected price of $21 to $24 a share. The plan was to settle US$111 million debt and use the balance “to acquire or invest in complementary businesses, technologies or assets”. The chosen NASDAQ nom de plume is GPRO and it realised the top end value.

Why Alibaba, Why Now GoPro?

Revenues looked good enough in the first quarter of 2015 to inspire confidence, with a 45% better showing in the Americas of US$180 million. Conversely despite the booming China e-market  GoPro only managed US$44 million although this was about 66% better year on year. Some market analysts suggest Xiaomi’s February launch of its cheaper Yi action camera spurred GoPro on to make its move before Xiaomi grabbed a materially significant online China market share.

While Seeking Alpha pointed out that “high-end foreign electronics brands can fare well with more affluent [Chinese] buyers” despite the cost-sensitive nature of the market, one of their Twitterers may have been more on point with the comment, “What Action Sports does China have? Nearly Zero. No Planes, No Surfing, No Snow Skiing, No Scuba Diving, No large White Water Rafting”.

So Will the GoPro Gamble Work?

I am personally unsure about this. GoPro’s American marketing campaign focuses on the ‘sexy’ nature of its products with names like All Season Sports Camera, Digital Hero 4 and HD Hero Naked. Without even wondering how Chinglish would cope with Chinese reverse translations, I seriously question their intrinsic value compared to cheaper Asian products that may be just as good. Go well, GoPro. Go prove me wrong on Alibaba.

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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