Alibaba to spend more on B2C site
Updated: 2012-01-12 07:53
By Gao Yuan (China Daily)
BEIJING - The Chinese e-commerce giant Alibaba Group pledged on Wednesday to invest more this year in Tmall.com, a website that allows businesses to sell products directly to customers.
The company hopes to ensure Tmall has the largest market share among all so-called business-to-customer websites.
"This investment in Tmall.com will definitely be higher than the amount this past year," said Wang Shuai, chief marketing officer of Alibaba Group, declining to name an exact amount.
Alibaba said in late October that it will invest 1.8 billion yuan ($285 million) to help small and medium-size merchants expand their businesses in an attempt at appeasing merchants who grew angry after the website issued plans to raise its service fees five- to 10-fold.
Tmall.com became Alibaba Group's business-to-customer website after it was spun off in June from Taobao.com, a site that allows customers to sell goods to each other. Tmall.com took up more than 50 percent of the business-to-customer market this past year, the company said on Wednesday.
"The new investment is likely to be used to improve Tmall.com's customer service rather than enlarge its market share," said Ding Jiaqi, an analyst from iResearch Consulting Group.
He said Tmall.com will not lose its dominance of the market in the short run.
The new investment could go into shipping and storage, Ding said. A large number of orders overwhelmed Tmall.com's distribution system on Nov 11, an unofficial holiday in China known as Singles Day.
"As a business website, Tmall.com will improve its infrastructure and pay more attention to providing better service to merchants and its partners in 2012," said Zhang Yong, CEO of Tmall.com. He also pledged to give merchants more marketing channels.
Last year, 100 billion yuan worth of goods were sold through Tmall.com, up 3.5 times from the amount for the previous year, Zhang said.
The number of unique visitors to Tmall.com reached 10 million in December, putting the website among the 10 most-viewed in China.
Even so, other business-to-customer websites are not going down without a fight.
"Intense competition among e-commerce companies is foreseeable in the next year, despite investors' attitudes toward making investments," said Chen Shousong, analyst from Beijing-based research company Analysys International.
"Other business-to-customer websites, such as 360buy.com, could be Tmall.com's potential competitors in the future."
Tmall.com also introduced its new Chinese name on Wednesday. The old name, which meant "Taobao mall", has been replaced by tian mao, which translates as "heavenly cat".
Analysts believe the move was meant to draw customers' attention to the site.
Meanwhile, Zhang denied that the company was considering making an initial public offering. "We will not pursue an IPO after the split from Taobao.com," he said.
(China Daily 01/12/2012 page16)