Search:
Newsletter signup:
Engagement

The business of social media marketing, storytelling and gamification

Social Business

Integrating social business thinking and technologies throughout the enterprise.

Social Analytics

The business of social media listening, understanding and reputation

Sustainability

Social media meets social responsibility.

Social Commerce

Where social media relationships translate into transactions

Home » Funding, News, Social Commerce, Social Commerce Spotlight, Social Media News

Social commerce spotlight: What does Alibaba’s massive Weibo investment mean for social shopping in China?

Submitted by on May 3, 2013 – 9:29 amNo Comment

China’s biggest e-commerce group Alibaba has bought an 18% stake in China’s fast-growing micro-blogging platform Weibo.

The deal, valued at $586m, is thought to be the biggest web deal of this year and pushes Weibo’s value to over $3bn.

The move will provide more advertising revenue to Weibo as it tries to monetize its service and increase its lead over rival Tencent Holdings’ social messaging service, WeChat, while also helping to drive more web traffic to Alibaba’s Taobao Marketplace, China’s largest consumer-facing e-commerce site.

The agreement comes with an option to increase Alibaba’s stake to 30% in the future, but at present is expected to generate around $380m in revenue over the next three years.

With up to 500 million accounts (although this is disputed), Weibo is ripe for monetization, but until now has struggled to generate much from its advertising, so adding a commerce component could help kick-start this facet of the business. Indeed, phone maker Xiaomi’s stab at selling some of its phones on the platform last year proved hugely successful: 1.3m reservations for its new model were logged in just five minutes. This was only a short-term experiment, not a long-term sales channel, but indicates the potential success similar strategies could have on a more permanent basis.

It’s also likely that Weibo will play a pivotal role in Alibaba’s future mobile plans, with the company’s founder and chairman Jack Ma commenting: “We believe that the cooperation of our two robust platforms will bring unique and valuable services to Weibo users, as well as making the mobile internet a core part of Alibaba’s strategy.”

Share

Leave a comment!

Add your comment below, or trackback from your own site. You can also subscribe to these comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

This is a Gravatar-enabled weblog. To get your own globally-recognized-avatar, please register at Gravatar.

Additional comments powered by BackType