Home Ecommerce Alibaba Helped By Revenue From Display Ads And Mobile

Alibaba Helped By Revenue From Display Ads And Mobile



E-commerce giant Alibaba – often referred to as the Amazon of China – had a rosy third quarter, its first as a public company after a whopping $25 billion IPO (the one that put about $6 billion in stakeholder Yahoo’s pocket). (Earnings release.)

Alibaba’s Q3 revenue growth was “mainly driven by the growth in online marketing service revenue and commission revenue,” which includes both performance display on the merchant side and transaction commissions, according to the company. Alibaba’s origins as a B2B marketplace position it quite differently from its American nemesis Amazon.

Via online properties Taobao and Tmall.com, Alibaba offers targeting both on- and offsite in the form of e-commerce search and display ads. Alibaba also enables real-time bidding on- and off-network through its Taobao Ad Network and Exchange (TANX).

Posting an overall 53.7% increase in revenue to $2.7 billion on Tuesday, Alibaba similarly saw strong traction in mobile, where it pulled in $606 million, which accounted for 35.8% of the company’s gross merchandise volume (GMV). At the close of the third quarter, Alibaba counted 217 million monthly active users, up 15.4% from the 188 million recorded last quarter.

“We are encouraged by continued improvement of mobile monetization, which demonstrates the strong commercial intent of our users,” Alibaba Group CEO Jonathan Lu said in statement. “On our China retail marketplaces, gross merchandise volume for the quarter increased 49% and annual active buyers increased 52% year on year.”

Alibaba’s ad-derived revenues for its e-commerce platforms may grow faster than its GMV for the next couple of years, Forrester Research analyst Bryan Wang predicted when Alibaba made its New York Stock Exchange debut. The reason being that the GMV growth rate in the overall Chinese e-commerce market is expected to slow down.

The company’s entry into the B2C world by way of Tmall.com and shopping search engine eTao, along with the consumer-to-consumer Taobao Marketplace, which was built out of the acquisition of auction site EachNet, ramped up both on- and offsite advertising products.

Alibaba recently inked a data and technology deal with Chinese digital video company Youku Tudou, which will enable Alibaba’s digital marketing platform Alimama to link signals from video-based marketing campaigns to commerce transactions. Additionally, Alimama rolled out a data-management platform (DMP) to unite shopper and intent data for brands and merchants. Alibaba has its own DMP, which hooks up to TANX.


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