Online marketplace Alibaba will soon be joining the Indian online retail industry. It has already acquired its first office in India but keeps us guessing about how it will enter Indian ecommerce. As China’s largest ecommerce company, it is raking in even bigger bucks these days. So much so the etailer has increased its projection of revenue growth from 48% to 53% for fiscal 2017. This brightens things up for investors in spite of the deceleration of the county’s economy which is holding back Alibaba from its true ecommerce potential
Amazon’s growth in revenue despite economic slowdown
The Chinese online marketplace benefited big from its Singles’ Day sale in November. It obtained a greater online advertising share from rivals like Baidu Inc. And, in the December quarter, it saw more than a double in cloud computing sales.
However, as transactions slow down, Alibaba is still generating more revenue. How you ask? Well, the etailer sells its merchants promotion services to attract more consumers and is expanding its entertainment arm similar to Netflix.
Ray Zhao, a Shenzhen-based analyst at Guotai Junan Securities Co. said, “The growth is mostly coming from the strong performance in Alibaba’s digital entertainment platforms, its ability to make money from cloud computing. Investors will have a huge reaction to the revenue forecast raise.”
Alibaba’s new focuses
- Alibaba wants to concentrate on globalisation this year, said Daniel Zhang, chief executive officer. In the US the etailer wants to get on board at least a million small sellers.
- Most of the company’s revenue comes from China at the moment and the etailer plans on penetrating deeper into its rural regions too.
- It is also purchasing Hollywood content to boost its digital media division that is currently making losses.
- Alibaba is also planning to merge the online and offline retail worlds for expansion with the purchase of Intime Retail
- The company wants to offer more targeted marketing strategies for brands through big data and cloud computing services and one-stop solutions with its shopping sites and video streaming, said Julia Pan, a Shanghai-based analyst at UOB Kay Hian.
Alibaba has many goals for this year, can we exprct its entry into India to be another one of its goals for 2017?