Alibaba is making headlines as it sells the Chinese dream at its Gateway ’17 event in Detroit, aimed at convincing U.S. businesses they can get rich selling to China through online marketplaces. But it was the brand’s Investor Day summit in China earlier this month where the tech giant stated that its own strategy for success is not just focused on the sale of merchandise on Taobao and Tmall, but also on digital media and marketing through platforms such as livestreaming.
According to data from L2’s new Insight Report on Alibaba, Tmall’s livestreaming platform is a top choice for brands because it connects to commerce with see now, buy now technology lacking on Western live stream platforms. A total of 68% of Index Beauty brands have livestreamed on Tmall as of February 2017, making it the sector’s most popular livestreaming platform in China. Livestreaming giant Yizhibo comes in second with less than a third of all Beauty brands present on the platform.
Alibaba’s focus on digital media was a key theme of its 2017 Investor Day summit held on June 8 and 9 at its headquarters in Hangzhou. It highlighted the synergies between its e-commerce sites and entertainment investments, which include livestreaming and music, as well as acquisitions of a film studio, online video site Youku, and film ticket service Damai. In 2016, it established the Alibaba Digital Media & Entertainment Group, which plans to invest $7.2 billion in content over the next three years.
These entertainment investments are tied into Alibaba’s new “Uni Marketing” program unveiled at Cannes Lions two days ago after being teased at the Investor Day event. It collects data on users’ activities across Alibaba-owned platforms via a “unified ID” that can track not only purchases on Alibaba platforms, but also entertainment preferences on sites such as Youku. This allows stores to tailor their product recommendations and storefronts to users’ individual tastes. Brands will also have access to a “Brand Databank” that tracks the performance of livestreaming campaigns or promotions through Alibaba’s online shopping festivals such as Singles’ Day.
This extensive access to consumer data is expected to boost the company’s advertising revenue in the years to come. Reporting that it sold $550 billion of merchandise over the last fiscal year at the investor event, Alibaba predicted that sales growth for the upcoming year would be between 45 to 49%. Digital marketing is predicted to be a major driver of that growth in contrast to merchandise sales, as the company’s CFO stated that 60% of its revenue comes from its advertising platform. The company received an estimated 30.1% of all digital ad revenue in China in 2016, and the share is expected to increase to 34.3% by 2019.