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.
Alibaba intends to launch an IPO in the near future, aiming for US listing
The Alibaba Group, China’s largest e-commerce organization, has announced plans to seek listing on the U.S. stock exchange. The company is preparing to launch an initial public offering (IPO), but has not yet released details concerning this process. Alibaba is currently considered one of the most successful e-commerce groups in the world and has been making a strong push into the mobile commerce sector. In order to provide its forthcoming IPO with additional momentum, Alibaba has been pushing to make its new taxi application more popular among consumers.
Taxi-hailing application expected to add value to Alibaba’s mobile initiatives
The application takes advantage of a taxi-hailing service. The service allows users to schedule a taxi for transportation directly from their mobile device. The service can be paid for through the Alipay application, which facilitates mobile payments. This type of taxi-hailing service is quite popular in China, where people are beginning to rely more heavily on transit services. Taxis in large cities are finding that business from mobile consumers is rising significantly.
Alibaba and Tencent continue to fight in the mobile market
Alibaba is currently working to compete with Tencent, one of China’s largest Internet organizations. Tencent has been pushing into the mobile commerce field as well and has managed to establish a strong presence therein through its WeChat application. WeChat is the most popular messaging application in the world and is heavily used throughout Asia. Tencent has been working to transform WeChat into a mobile commerce platform and has managed to find success in this endeavor thus far.
Taxi-hailing applications may be a boon for both Tencent and Alibaba
Both Alibaba and Tencent are focusing heavily on taxi-hailing services. Both companies believe that taxis could power future growth and add further value to their mobile commerce initiatives. Alibaba anticipates that it will raise more than $15 billion from its IPO, but there are no details concerning when this IPO will be launched. Alibaba is likely to continue working to establish a lead in China’s growing mobile market.
