Alibaba.com, the world’s largest business-to-business e-commerce services provider, could see its non-core offerings or value-added services account for about 30 per cent of sales from paying members by next year.
That development would take Alibaba another step closer to chairman Jack Ma Yun’s vision to meet a large proportion of the information-technology, sales and financial needs of the country’s millions of small and medium-sized enterprises (SMEs).
The Hangzhou-based firm, which had 53.44 million registered users and 712,867 paying members as of June, offers dozens of value-added services, including a wholesale transaction platform, small loans programme, website development software and virtual showrooms.
In a report, analysts at JP Morgan Securities forecast that value-added services in Alibaba’s English-language international marketplace website, used by global traders, would constitute more than 30 per cent of sales next year.
Alibaba.com, the world’s largest business-to-business e-commerce services provider, could see its non-core offerings or value-added services account for about 30 per cent of sales from paying members by next year.
That development would take Alibaba another step closer to chairman Jack Ma Yun’s vision to meet a large proportion of the information-technology, sales and financial needs of the country’s millions of small and medium-sized enterprises (SMEs).
The Hangzhou-based firm, which had 53.44 million registered users and 712,867 paying members as of June, offers dozens of value-added services, including a wholesale transaction platform, small loans programme, website development software and virtual showrooms.
In a report, analysts at JP Morgan Securities forecast that value-added services in Alibaba’s English-language international marketplace website, used by global traders, would constitute more than 30 per cent of sales next year.
For domestic buyers and sellers who use the e-commerce firm’s Chinese-language home market, value-added services revenue will be about 24 per cent.
Alibaba connects SMEs that have little or no marketing budgets with international and domestic buyers on those two online trading websites.
In the quarter to June, sales of value-added services made up 25 per cent of total revenue from the so-called China Gold Supplier members in the international marketplace and 20 per cent from the mainland marketplace’s ‘China TrustPass’ members.
‘Alibaba.com management believes the significant demand from SMEs is under-addressed,’ a Deutsche Bank report said. ‘For example, SMEs need better logistics, insurance, warehousing, access to loans, translation and legal services.’
Total second-quarter revenue for Alibaba, whose business model takes cash up front from members through annual fees, rose 49 per cent to 1.37 billion yuan (HK$1.57 billion) from 919 million yuan a year earlier.
That gain was made on the back of faster than anticipated adoption of value-added services and a significant increase in paying members. Alibaba’s most popular value-added services last quarter were the AliExpress wholesale transaction platform, Ali-ADvance keyword listing, premium placement for search results, and Ali-Loan.
China TrustPass membership grew 34.3 per cent in the second quarter to 593,498 from 441,799 a year earlier. The number of premium-priced China Gold Supplier members rose 50.2 per cent to 105,810 from 70,453. ‘Global Gold Supplier’ membership, however, continued to decrease, to 13,559 from 19,219 after Alibaba added features and raised prices.
Alibaba had 53.44 million registered users as of June
The forecast contribution of Alibaba’s value-added services as a percentage of next year’s sales: 30%
