Alibaba Is Building an ‘E-commerce Media Ecosystem’

Retailers need to ditch the idea that e-commerce is a merely another sales channel for their products and embrace the marketing and brand-building potential that it offers, Alibaba Group CEO Daniel Zhang said this week.

As consumers live more and more of their lives online via social media and smartphone apps, “branding and marketing is [becoming] not only about sales, but about having consumers interact with brands, and about building relationships between brands and customers” online, Zhang said during an Alibaba conference held in Hangzhou, China, that was attended by more than 800 merchants who sell through the e-commerce giant’s Tmall.com and Tmall Global marketplaces.

“More and more merchants are realizing that branding and marketing will be redefined in the Internet era,” he said.

Retailers Speak at Alibaba’s Tmall Merchants Conference

Alibaba, which runs China’s largest online-shopping marketplaces, is urging retailers to think of Tmall and sister website Taobao as more than just virtual shelf space for listing and vending products.

In fact, Tmall is a foundational piece of what Zhang called Alibaba’s “e-commerce media ecosystem” that reaches consumers through a variety of digital channels and can carry marketing messages beyond the 407 million annual active users on Alibaba’s China retail marketplaces.

“We would like to connect our e-commerce platforms with media,” Zhang explained. Over the past two years, he said, Alibaba has been building ties with China’s most popular digital media outlets through partnerships and investments such as the company’s stake in microblogging website Sina Weibo, its acquisition of China’s leading mobile browser provider UCWeb, and its planned buyout of Youku Tudou, China’s largest video-streaming site.

These investments are all aimed at helping merchants run targeted, multichannel advertising and marketing campaigns to raise their brand awareness and drive Tmall sales. For example, through Alibaba, retailers can place ads and brand-building content via two UCWeb products that each has hundreds of millions of users: mobile search engine Shenma Search and smartphone content aggregator UC Headline.

“We also have Taobao Headline, a shopping-news media app,” Zhang added, “and Weitao, a social media feature within Mobile Taobao which allows merchants to interact with users on smartphones via text, video and interactive campaigns.”

Data is the key to reaching the right audiences through targeted campaigns and providing product recommendations to individual consumers, Zhang said, “because data can be shared.” Alibaba already collects valuable user data from its online shopping sites and related media.

“When we invest in (media outlets such as) Weibo and Youku, the first thing we do is to allow users to log in to those sites using the same ID they use for other Alibaba sites,” Zhang said. “We hope to be able to recognize our customers across all e-commerce sites and media, enabling merchants to learn about and operate for their target customers.”

Zhang also encouraged retailers to innovate in the way they engage with consumers by creating and distributing unique content that helps consumers engage with and better understand their brands, to build “a solid fan base.” Merchants can also establish relationships with China’s “cyber-celebrities” and noted online shopping experts to help spread their marketing messages through social media. “I want to call them content generators,” Zhang said. “They don’t manufacture products by themselves, but they generate and deliver lifestyles.”

“Alibaba is building the best platform for content generators,” Zhang added, “a platform to allow merchants to do transactions, branding and marketing, and manage their customers in multiple channels … brands should make Tmall their official operations battlefield.”

At the Alibaba-sponsored merchants conference, Zhang may have been preaching to the choir. Representatives for several Western companies selling on Tmall talked about how they are leveraging advertising and marketing tools available through Alibaba to build awareness among Chinese consumers.

P&G executive Jasmine Xu, vice president for Greater China E-Business & Branding, said the consumer-brands multinational last year started to integrate e-commerce with its brand-building efforts on the mainland through a series of campaigns aimed at interacting with “potential customers, new customers and regular customers, including the brand’s young fans born in 1990s.”

“We are so glad e-commerce is no more only a sales platform,” Xu said, “but plays a significant role in building brands. This is changing P&G’s century-long brand-building model.”

Said Kyle Freebairn, general manager for ICON Health & Fitness, a U.S.-based manufacturer of exercise equipment including NordicTrack and HealthRider: “There is no e-commerce, it’s just commerce. There is no online, offline. It’s just melding together, especially in China. So for us, it’s bringing that integrated strategy, so consumers have a very comfortable experience, and Tmall’s a key part of that.”