The company recently upgraded the app, which claims a user base of more than 400 million, to improve online-to-offline (O2O) functionality, allowing mobile phones to be used to purchase products in traditional retail settings. For example, Taodiandian (淘点点), a food catering and delivery service, was launched in December.
Participating in the sale will be 800 restaurants, 37 department stores, 1,500 in-store brand outlets, 230 karaoke parlors and 288 movie theatres all across China, according to Alizila.com (Alibaba Group’s corporate news site). Limited karaoke sessions and movie tickets sell for just RMB 3.80, for example.
The company is promoting the sale as a mobile version of Tmall.com’s '11.11 Shopping Festival', an annual 24-hour online event that last year generated US$5.7 billion (RMB 35 billion) in transactions. About 21 per cent of transactions were completed through mobile devices, up from five per cent during the 2012 festival.
To speed up the adoption of m-commerce, last November Alibaba even gave away free smartphones running Alibaba’s mobile operating systems to willing merchants through a US$82 million (RMB 500 million) investment program. That certainly made it easier for Taobao sellers to make the switch to mobile, but consumers at large still form the major m-commerce battleground.
To get consumers habituated to using mobile phones to pay for goods and services on a daily basis, both Alibaba Group and rival Tencent Holdings have been spending millions to subsidise taxi fares via rebates from using taxi-hailing mobile apps financially backed by them—Kuaidi Dache (快的打车) and Didi Dache (嘀嘀打车), respectively.
The battle further intensifies: Didi Dache is linked to Tencent’s popular instant messaging app WeChat, while Kuaidi Dache is built into Alibaba’s payment app, Alipay.
What's really at stake is future dominance of the country’s increasingly mobile-focused population. Several reports on the growth of m-commerce in China reflect this, though estimates of the pace of growth vary. Statistics recently released by People's Bank of China showed mobile transactions climbed 317 per cent in 2013 to US$1.58 trillion (RMB 9.64 trillion), but this accounted for only three per cent of the country's overall non-cash transactions.
According to Analysys, China's mobile-payments market grew 800 per cent in Q4 2013, with total transactions hitting US$212.2 billion (RMB 1.30 trillion). Alibaba’s Alipay led the market with a 69.6 per cent share, while Tencent’s Tenpay had 3.3 per cent.
What is not subject to debate is how pervasive smartphones have become in China, in striking comparison with other markets. For example, KPMG noted that 55 per cent of 10,000 internet users surveyed have made a mobile payment, versus only 19 per cent of US users.
Chinese consumers have "truly entered the era of mobile shopping”, said Bill Ying, marketing head for Mobile Taobao, quoted on Alizila.com. “Mobile take-up is strong in China because the country has skipped out the adoption of the landline and migrated straight to mobile platforms,” added Egidio Zarrella, clients & innovation partner at KPMG China, in the company's report.