Taobao Turns Shoppers Into Sales Force for 12.12 Event

Leveraging Chinese consumers’ love of mobile phones and social media, Alibaba Group is offering online shoppers a chance to get paid just for sharing “likes” for their favorite products during an upcoming Taobao Marketplace e-sale.

From Dec. 7 through Dec. 12, consumers who create personal shopping lists using the Mobile Taobao app and share it with friends or through social media will be eligible for cash awards—think sales commissions—if others complete purchases by clicking on product links on the lists.

Taobao says it plans to dole out a total of RMB 100 million ($15.6 million) in cash to consumers, payable to their Alipay accounts, for the promotion. The company did not say how much consumers will receive for each successful recommendation.

Through the promotion, which is part of Taobao’s annual 12.12 sale, Mobile Taobao is encouraging greater social sharing, instead of just shopping, through the app, officials said. “We hope all users can become content creators and providers,” said Jiang Fan, Mobile Taobao senior director, at a Nov. 30 press conference in Beijing. The promotion aims to use word-of-mouth to introduce more consumers to quality merchandise and “establish closer connections among consumers,” Jiang said.

Chinese consumers are famous for being social media junkies who rely heavily on advice from others when they make purchasing decisions. According to an August report from global consultancy McKinsey & Co., two-thirds of China’s consumers cite recommendations from families and friends as the critical factor influencing their decision to buy, compared with only one-third of consumers in the U.S. A report released last year by global digital and technology agency DigitasLBi found that 78 percent of Chinese social media users posted their recent purchases on social networks, a rate far higher than their counterparts in other countries.

These factors are heightened by the growth of the smartphone as the preferred device for Internet access in China. As merchants and consumers increasingly migrate to mobile, Mobile Taobao is making the shopping experience more personalized, at the same time making it easier for users to interact online with other consumers as well as with brands and merchants. To engage mobile users, Mobile Taobao recently launched a new feature called Wendajia (“ask others”) that lets consumers raise questions about products and other consumer issues with Mobile Taobao users.

Jiang said his team also is working with partners to produce value-added content that enhances the “interactive community experience.” In September, Mobile Taobao began posting consumer-focused content from well-known bloggers and other online personalities in special tabs on the app titled Taobao Headlines, Youhaohuo (“good products available”), Aiguangjie (“like doing shopping”), and Hongrenquan (“online personalities community”). The content includes travel tips, discussions of fashion trends and tech products, and other information.

Through the program, bloggers can earn commissions for successfully engaging new consumers. Mobile Taobao expects to pay out some RMB 2 billion ($313 million) in commissions to content providers over the next three years.

The upcoming Mobile Taobao promotion starting on Dec. 7 extends the social sales commission model to ordinary consumers during Alibaba’s annual 12.12 online sale.

Taking place a month after Alibaba’s giant 11.11 Global Shopping Festival, the 24-hour 12.12 sale is geared to give a revenue boost to C2C website Taobao Marketplace’s small- and micro e-tailers, who have difficulty competing against deep-pocketed major brands that sell on Alibaba Group’s Tmall.com marketplace, a B2C site, during the 11.11 event.

Taobao during this year’s 12.12 sale is highlighting local services available online as well as quality products made by Chinese manufacturers, which is part of a larger effort by the website to help low-end contract manufacturers move up the value chain by designing innovative products and building unique brands through their Taobao storefronts. According to Taobao, about 4,500 companies have joined the project.