Alibaba Group and Focus Media jointly announced recently at their 'new retail, new marketing, new connectivity' event to activate a new 'U Zhong Plan'. The title of the initiative is derived from an amalgamation of 'U' from the 'Uni Marketing' solution from Alibaba launched in 2017, and the second Chinese character of Focus Media’s name.
Focus Media already owns a formidable offline advertising network which includes digital screens on streets, in subways and in elevators, reaching 300 million middle-class consumers across 300 Chinese cities. The company is expanding what it can do digitally by leveraging Alibaba's online infrastructure and big data capabilities. Alibaba's 'Uni Marketing' initiative is meant to unify all useful data about a consumer from its e-commerce, entertainment and other aspects of its ecosystem. The data enables businesses and brands to make smarter decisions from consumer insights to improve their services in the 'new retail' world in real time. This approach to digital marketing offers more advanced and more reliable tools than traditional marketing and has always been at the core of Alibaba's 'new retail' concept.
Underpinning this 'new retail' push, Focus Media’s distribution strength offers sellers on Alibaba’s various e-commerce platforms an alternative avenue through which more potential customers can be reached, particularly within China’s growing middle-class community. Through Focus Media, which set a medium-term goal of having five million touchpoints in 500 Chinese cities and possibly reaching 500 million consumers, Alibaba can offer new channels for merchants to connect with these potential consumers and tap into their rising spending power. The two companies hope to merge online and offline marketing eventually, as well as help brands transition to fully-digital operations. The resulting upgrade to a 'new marketing' world will support the growth of 'new retail' across all sectors in future.
Focus Media's founder and CEO Jason Jiang Nanchun said the main idea is to have consumers interact with businesses, brands, merchants and retailers under a single, unified identity spanning across physical and online locations. He explained how the 'U Zhong Plan' will enable offline businesses or physical stores to go digital, and transact with Alibaba’s over-500 million users. When this happens, there will be an "explosion" of new connections between brands and consumers, both online and offline, he said.
Tmall's success reflects the importance of Focus Media's footprint. Tmall has been a foundational piece of Alibaba’s e-commerce ecosystem that reaches consumers through a wide range of digital channels. With the 'U Zhong Plan' in beta last year, Focus Media enabled Tmall to achieve true online and offline marketing integration as well as visibility, quantifiability and optimisability.
In fact, Focus Media made a significant contribution to Tmall's success during 2018’s Singles Day. 76% of buyers were new customers who saw advertisements on Focus Media's platforms. Also, according to ten participating brands, 40% of their total transactions were from customers who saw a product advertised via Focus Media.
In July 2018, Alibaba acquired a minority stake in Focus Media as it looked to engage with shoppers on the move. The company paid US$1.43 billion (RMB9.63 billion) for a 6.62% share of Focus Media then. The investment is a part of Alibaba's larger 'new retail' strategy that integrates the best aspects of online and offline commerce to make shopping more engaging and convenient for consumers; while offering enhanced marketing tools and analytics to merchants via its martech unit Alimama.