Alibaba Gets Set for December Sales Event

By Casey Hall

SHANGHAI — Fresh from the success of its biggest-ever Singles’ Day sale on November 11, Alibaba’s Taobao Marketplace is gearing up for another sales event: 12.12.

The December 12 sale was launched by Alibaba in 2011 to promote its Taobao Marketplace, which is China’s largest online shopping platform by gross merchandise volume, according to data from iResearch.

Many of the millions of small and medium-sized vendors that sell on Taobao are largely shut out of the shopping extravaganza of Singles’ Day because they offer a more niche product range and often don’t have the bandwidth to offer the same discounts as the major brands.

This year, reflecting the increasing importance of m-commerce in China’s online shopping sphere — mobile sales accounted for more than 70 percent of the $14.3 billion in sales racked up over last month’s Singles’ Day event — the Mobile Taobao app will offer 100 million yuan (or $15.6 million at current exchange) in cash incentives to reward users who help their network of contacts discover and purchase products.

“I think it’s a smart move,” Patrice Nordey, chief executive officer of digital inception agency Velvet, said. “This 100 million yuan is marketing money that is better spent on these [cash rewards], rather than a splashy ad campaign featuring big brands, which makes sense for Singles’ Day, but less so for the 12.12 sale, which is more focused on these small, mom and dad sellers.”

From December 7 through the end of the sale event on December 12, Mobile Taobao users can create product recommendation lists, which they can then share using social media. If their friends then buy products from the shared lists, the original poster is eligible for cash rewards, which will be deposited into their Alipay accounts at the conclusion of the sale.

“Mobile Taobao will focus on building a content ecosystem and a close community of shoppers. It will no longer just be a platform for merchants to provide product information,” said Jiang Fan, head of Mobile Taobao.

“We hope all users of Mobile Taobao could become content providers, offering product recommendations that can meet different consumer needs and fostering closer connection among our users.”

“Taobao has been a social platform from the start, built on the comments and ratings of users. WeChat has more recently become a challenger in the social e-commerce space, but this shows how important the social e-commerce is to Taobao and in China generally,” Nordey said.

It’s the first time that everyday consumers have been offered cash rewards, and follows the introduction of a program in September to allow media, bloggers, celebrities, professional organizations and content creators to make money by generating shopping-related content for the Mobile Taobao app.

Two billion yuan ($313 million at current exchange) worth’s of commissions will be distributed to the program’s participants over the next three years.

Source: WWD