Alibaba continue to grow in China

Endaba Group

Chinese ecommerce giant, Alibaba has posted its strongest revenue growth for the past four quarters. Growth in their international division has picked up strongly, however it is China has that driven the group’s success. Whilst bricks and mortar retailers are notoriously struggling in the challenging Chinese market, ecommerce sales are continuing to grow in the country. Chinese consumer’s spending on FMCG grew just 2% in the first quarter of 2016, compared to a year ago; whereas spending on consumer goods via ecommerce channels has risen 48.1%.

Alibaba’s success has been put down to 3 main factors:

  1. Reach – Alibaba’s investment is allowing it to reach huge numbers of the Chinese population, even reaching rural areas through its Rural Taobao platform – in a way that other ecommerce businesses struggle to do.
  2. Customer engagement and understanding – Alibaba’s platforms are much more than distribution sites. Consumers can look for news, understand trends and interact with the brands, increasing engagement and aiding sales conversion.
  3. Success with Western brands expanding into China – Alibaba is now the Chinese partner of choice due to its distribution network and ability to provide intelligence and insight into consumer trends and habits.

Whilst there is no denying Alibaba’s success in China, the company have not seen the same success internationally, and have now adopted a more selective approach to their expansion.