The Chinese company is using a new strategy that involves the use of investments to boost profits.
The financial results from Alibaba’s first publicly traded quarter have now been announced and, along with those drooping figures, the company has also revealed its new strategy to inject some life back into its profits by backing investments into mobile marketing and m-commerce.
From July through September, Alibaba saw its net income drop by a dramatic 39 percent.
This occurred despite the fact that the company saw a massive surge of 54 percent in the company’s revenues, based on a powerful user demand. The results that were recently released showed that the company is using a strategy that is not entirely unlike one of its rivals, Amazon, the American e-commerce giant. This strategy involves using investments into mobile marketing, m-commerce, and other areas within itself in order to be able to boost its own growth over the long term.
In October, Amazon.com Inc. had reported experiencing a considerable third quarter loss and is also investing in mobile marketing.
This was the case, even though it had also seen a growth in revenue by 20 percent. It has been pouring its money into itself, hoping to build itself up in order to achieve greater profits over the long term. In this, it has been looking to advertise over smartphones, tablets, and even streaming television, as it promotes and encourages its m-commerce side.
That said, outside of that specific part of the strategy, the two companies have a very different way of operating. Amazon directly sells and distributes products and also works with third party sellers. Alibaba, on the other hand, is not in competition with merchants, nor does it carry any inventory.
Investments into mobile marketing and commerce are set to become an important opportunity for earning potential by the company that is continuing its rapid growth at the same time that all of this is happening around it and within it. It will be very interesting to watch the direction that the company takes throughout the current quarter, which is considered to be a critical one within the American marketplace.