One-third of transactions on Alibaba’s platform happen through mobile devices
In the previous part of this series, we discussed Alibaba’s main business lines in China, Taobao and Tmall. We also discussed how these businesses are showing fast growth.
But Alibaba is also able to successfully leverage the fast-growing mobile commerce market to grow its own business. According to its F-1 filings and as the chart below shows, Alibaba’s mobile gross merchandise volume (or GMV) as a percentage of total GMV has consistently increased, from 12% in 2Q13 to 33% in 2Q14.
Alibaba has managed to grow its mobile commerce so fast such that it’s overtaken eBay (EBAY) in terms of mobile use. According to eBay, eBay’s mobile GMV percentage of total GMV in 2Q14 was only 20%. This is surprising, considering smartphone penetration in the U.S. is much higher than in China. So you would normally expect more mobile commerce transactions to happen on eBay than on Alibaba.
The mobile commerce market is showing strong growth
After Alibaba goes public in the U.S., it could also leverage the fast-growing U.S. mobile commerce market. According to a report from eMarketer, the U.S. retail mobile commerce market will grow at a rate of 37%, from $42 billion in 2013 to $58 billion in 2014. The report also predicts that this market will grow to $133 billion by 2018, accounting for nearly 27% of retail e-commerce sales in the U.S.
Interestingly, the report also mentions that two-thirds of these mobile commerce transactions will come from tablets in 2014. Although Google (GOOGL) and Facebook (FB) are bigger players in the mobile advertising market, they’re also gradually trying to increase their presence in the mobile commerce market.