April 23, 2019

BABA, 700 HK, ByteDance Ltd., JD, PDD, TCEHY, VIPS, WB, Xingyin Information Technology Co. Ltd., Zhejiang Jishang Network Technology Co. Ltd.

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SOURCES AND BACKGROUND

26 sources representing 10 domestic vendors, 12 international vendors and 4 agencies representing 11.39 billion yuan ($1.70 billion) sales through Taobao and Tmall in 2018

REPEAT SOURCES 18 from OTR Global’s January report INTERVIEWS March 31 through April 15

AVERAGES Weighted according to each source’s 2018 sales on Tmall/Taobao

Content, Promos Drive Vendor Sales

Recommendation advertisements, live streaming and deeper discounts helped drive traffic on Alibaba's Tmall and Taobao during FY4Q19.

  • FY4Q19 vendor sales through BABA's Tmall and Taobao up 19%–24% yy (vs. up 20%–25% during FY3Q19); sales met or exceeded plan for 23 of 26 sources (vs. 15 of 25 in FY3Q19)KOL marketing promos drove traffic; precise recommendation ads helped conversion rates
  • Vendors' overall FY4Q19 cost paid to BABA platforms 13%-18% of sales (vs. 14%–19% in FY3Q19); ad budgets up yy for content, live streaming
  • BABA's main competition is social ecommerce; BABA reacting to PDD threat by providing more resources to support its discounting channels
  • Area to Watch: Recommendation ads free in FY4Q19, but Taobao testing paid ads in April
by Meredith Sun
Asia