Alibaba and Social Networks

Executives at Alibaba’s Taobao, the dominant Chinese online marketplace, suggest its 9 million merchants provide more customized products or services to mobile shoppers who account for more than half of traffic.

Mobile and differentiation were the key words when Alibaba Group Holding Ltd.’s top executives introduced their strategy to 800 merchant attendees last week at the annual meeting of sellers on Taobao, its largest Chinese web marketplace.

About 9 million merchants sell 1 billion items on Taobao.com, according to Alibaba.

Mobile has become the major shopping venue on Taobao.com. “Mobile is evolving at a speed that is much faster than our expectation,” says Zhang Jianfeng, president of retail marketplaces at Alibaba, “Mobile traffic now accounts for 55% of our total traffic, and that number was 25% a year ago. We anticipate it will exceed 70% by the end of this year.”

Taobao.com is responding by creating new mobile services for merchants, including some that focus on social media marketing. In March, Taobao.com launched Xiaopu (which means “small booth” in Chinese), a feature in the Taobao app that enables merchants to upload product listings more quickly through mobile devices and connect more effectively with consumers through social media.

“Xiaopu simplifies the steps to manage a store and could reduce the time to upload a product listing from 20 minutes to 3 minutes. For example, merchants can scan a bar code on a product to post a product,” says Zhang Kuo, director of Alibaba’s mobile business, “Xiaopu also allows merchants to post messages on Chinese social network Weibo to reach followers based their location. Consumers could buy products that are close to them, and even get the product from a merchant in person.”

The focus on social media reflects its growing role in driving traffic to Taobao merchants, and the declining traffic from mobile consumers using Taobao’s internal search engine. “The mobile traffic from searches is decreasing. Now only 50% of our mobile traffic comes from search, and more traffic is coming from recommendations in online communities and social media,” Zhang says.