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28 Jul, 2013

Chinese Online Giant Alibaba Plans Big Expansion in Lifestyle Services

By Shen Jingting and Meng Jing

Beijing, July 26, 2013, (China Daily) – Chinese e-commerce giant Alibaba Group Holding Ltd plans to boost its presence in China’s online market, and is adding services to ease consumers’ daily lives, from ordering food to booking movie tickets.

Online shopping has become a new way of life for many Chinese consumers looking for greater convenience. [Photo / Provided to China Daily]

The company expects the new business area to become a major revenue source in the future.

Online shopping has become a new way of life for many Chinese consumers, said Zhang Jianfeng, vice-president of Alibaba Group. And the company has realized that customers are not satisfied with merely buying items on Internet.

“Gradually, consumers are developing a strong demand for daily life services, in fields like catering, entertainment and travel,” Zhang said at a Beijing news conference on Thursday.

Taobao Life, a platform owned by Alibaba that provides such services, has been receiving unprecedented attention from Alibaba’s management since the beginning of the year. In March, Alibaba’s chairman Jack Ma said that “amazing” things will happen if everyday activities are combined with mobile Internet services.

Ma compared the growing importance of e-commerce in people’s lives to “the rising sun at 5 or 6 am”, and Alibaba expressed its ambition to develop the new business to reach a scale similar to its booming Taobao Marketplace.

If so, investors who are eyeing Alibaba’s possible initial public offering will find another bright spot for the company’s future profitability, analysts said.

Alibaba is said to be planning to include its e-commerce platforms – Taobao Mall, Taobao Marketplace and eTao – into the planned IPO package. Last year, Taobao Mall and Taobao Marketplace posted about 1 trillion yuan ($163 billion) in total transaction value.

Zhang revealed that the Taobao Life platform has three strategic business sectors. One is Taobao Diandian, a mobile application launched in July that helps customers order food. More than 100 restaurants in Beijing, Shanghai and Hangzhou have opened services on Diandian.

Meanwhile, Taobao Movie is the nation’s biggest mobile platform to buy film tickets. It allows clients in more than 100 Chinese cities to select seats from about 800 theaters, Zhang said.

The company also set up a platform on Taobao Life, known as Offer, which provides people with classifieds in areas such as apartment rentals and housekeeping services.

Song Yang, e-commerce senior analyst with the Beijing-based research firm Analysys International, said that there’s a promising future for companies able to successfully combine people’s everyday needs with the Internet-based services.

“There are no official statistics about the size of the market, but this is the future of e-commerce. Because the services are all about making people’s everyday life better and easier, ” Song said.