Alibaba Giving Away Smartphones to Speed M-commerce Adoption

Alibaba Group is pushing millions of merchants selling on its Taobao shopping marketplaces to adopt mobile e-commerce through a RMB 500 million ($82 million) investment program that includes giving away smartphones to willing e-tailers.

Trying to speed up the pace at which Taobao’s estimated seven million merchants are shifting from PC-based online shopping to shopping by mobile phones, Alibaba officials are spending heavily to build up a mobile-services platform that will make it easier for Taobao sellers to make the switch.

The company started selling mobile-service packages through a Taobao website on Monday. The packages, which range from RMB 1,699 ($279) to RMB 2,699 ($443), provide Taobao sellers with a starter guide on how to set up online stores for mobile devices, data analysis tools, and e-book coupons. More expensive packages include guidance on legal matters.

To sweeten the already discounted packages, Alibaba Group will throw in a free smartphone running Alibaba’s mobile operating system for every subscriber. The smartphone will include software optimized for the needs of Taobao sellers, the company said in a statement.

Alibaba Group Chief Executive Jonathan Lu said he hopes Taobao sellers can quickly embrace m-commerce to speed up China’s economic transformation, drive domestic consumption and spur employment.

Since taking over the CEO post from Alibaba founder Jack Ma in May, Lu has made m-commerce a centerpiece of the company’s strategy. In September, Alibaba Group launched Laiwang, a mobile-messaging app, to compete in China’s rapidly growing mobile chat space.  Last week, Alibaba’s e-payment affiliate Alipay tied up with Intime Department Store to allow Alipay’s mobile application, Alipay Wallet, to be used as a payment option at store checkout registers.

The scorching growth of m-commerce was in evidence during the recent 11.11 Shopping Festival.  About 21 percent of the total number of transactions, recorded during the 24-hour sale were completed through mobile devices, up from five percent during the festival last year. The 11.11 sale saw RMB 35 billion worth of goods transacted in that one day. According to a Taobao report, the value of online purchases made via mobile devices last year soared 600 percent on Taobao Marketplace and Tmall.com, Alibaba’s dominant online-shopping marketplaces.

Taobao customers who shop with mobile devices now number more than 320 million, said Eddie Wu, Alibaba Group senior vice president. “In the future, the smartphone will become one of the main channels for people to shop,” Wu said.