Alibaba’s Path To Mobile Commerce Domination

Since going public last September, Alibaba has shown how an eCommerce company can set the bar for what it means to be the global leader in mobile commerce.

Alibaba did that once again last week when it shared its 352 percent annual increase in mobile revenue from the year prior. While joining the world of publicly-traded companies certainly helped give Alibaba some more press about its mobile efforts, it’s clear from looking at a snapshot of Alibaba’s last four quarters that it’s been a mobile leader for quite some time.

Take, for example, the quarter that ended Sept. 30, 2013, just a year before the company went public. Outside of the Chinese eCommerce market, Alibaba wasn’t making the headlines that competitors like Amazon, or Apple or even PayPal/eBay were, but its 91 million mobile active users across its eCommerce apps should have gotten its name into the ring with the other payments players. By the end of June in 2014, Alibaba had already grown that mobile figure by nearly 100 million to 188 million. And by the time Alibaba went public, it had around 217 million active monthly mobile users across its eCommerce app platforms.

The chart below shows Alibaba’s mobile GMV growth (in RMBs). 

“Alibaba is very much a mobile company,” Joseph Tsai, Alibaba executive vice chairman said in the company’s third-quarter earnings call, confirming Alibaba’s position in the mobile commerce space. Of course, Alibaba has one huge advantage at their side: China’s population is more likely to have a smartphone than a computer to shop from – smartphone penetration in China is estimated to be around 45 percent.

Alibaba also has another tool in their mobile commerce book — and that’s Alipay, the mobile payment option that has north of 300 million users. Last quarter, Alibaba executives wouldn’t break out how many Alipay transactions are made, but they did reveal that Alipay accounts for 78 percent of transactions made on its eCommerce platforms.

“We believe that the continued trend towards mobile provides us with a unique advantage to deliver a better consumer experience, as well as more value to merchants, because mobile users shop more frequently and we can serve them more targeted search results. We believe the increasing use of our mobile apps will field significant future growth in our China commerce retail business,” Tsai said in the company’s Q3 earnings call.

But just how much has Alibaba’s mobile commerce grown since going public? A snapshot into the past year of Alibaba’s mobile figures paint a pretty clear picture as to how its mobile commerce efforts have evolved.

To break down the above chart in USD, here is how Alibaba’s mobile GMV and user growth has evolved:

Alibaba Mobile Commerce
Q4: March 2015 Quarter
Mobile GMV	$49 billion
Monthly Mobile Active Users	289 million — 77 percent YOY increase; 9 percent QoQ increase
Mobile Revenue	$846 million —352 percent increase YOY
Q3: December 2014 Quarter
Mobile GMV	$53 billion
Monthly Mobile Active Users	265 million — 95 percent YOY increase; 22 percent QoQ increase
Mobile Revenue	$1.66 billion — 448 percent increase YOY
Q2: September 2014 Quarter
Mobile GMV	$32 billion
Monthly Mobile Active Users	217 million — 138.5 percent increase YOY; 15.4 QoQ increase
Mobile Revenue	$606 million — 1,020 percent increase YOY
Q1: June 2014 Quarter
Mobile GMV	$26.5 billion
Monthly Mobile Active Users	188 million
Mobile Revenue	NA until Q1 June 2015 report
Q4: March 2014 Quarter
Mobile GMV	$19 billion
Monthly Mobile Active Users	163 million
Mobile Revenue	$187.2 million

In Alibaba’s Q4 earnings call last week (April 7), CFO Maggie Wu also gave some indication of how Alibaba’s mobile commerce statistics have grown and how they expect it to be a major part of the company’s mobile strategy. While computers used to be the dominant force for online commerce (and very much is for most eCommerce companies still), Alibaba is seeing a rapid shift toward mobile.

“It already accounts for more than half of our total GMV. So that growth on mobile business pretty much exceeds everybody’s expectations, and that trend is continuing,” she said, later noting that the “mobile take rate should approach PC or even higher than PC.”

And she also gave some indication as to how Alibaba knows it’s poised for mobile growth.

“We have more data on mobile, the location-based data and buyer behavior data. So that made us believe that the value generated through the mobile platform could be very significant and could be higher. And eventually, that will drive the mobile monetization [and the take rate],” Wu said.

Driving that mobile monetization growth as an element of mobile GMV is what has helped (and will likely continue to help) Alibaba on its path of mobile commerce dominance in the eCommerce market. Particularly if the new, mobile-focused CEO has an impact on the company’s next steps toward mobile commerce growth.