Mobile commerce is a key growth driver for Alibaba

Alibaba (BABA) continues to be the unrivaled leader in the mobile space. For the quarter ending in December 2014, Alibaba achieved 265 million monthly active users on its mobile commerce apps. This is a sequential growth of 22%. It’s a year-over-year, or YoY, growth of 95%.

According to iResearch, Alibaba leads the China mobile commerce market with an 86% share of the total mobile GMV (gross merchandise volume). Its mobile Taobao app continues to be the number one mobile commerce app. It’s one of the most popular mobile apps in China. Mobile commerce represents one of Alibaba’s key growth opportunities.

Mobile Commerce: One of Alibaba’s Key Growth Drivers

Alibaba’s strength in mobile commerce demonstrates its ability to attract mobile. It has a strong commercial intent on a scale that other companies can’t challenge—like eBay (EBAY) or Amazon (AMZN). According to comScore, Amazon has 69 million mobile monthly active users. eBay has 44 million mobile monthly active users.

In December, Alibaba reported that through the first ten months of 2014, 54 out of every 100 payments made with Alipay came from mobile devices—compared to 23 payments in 2013.

Mobile GMV grew 200%

For the quarter ending in December, Alibaba saw a 213% increase in mobile GMV—compared to the same quarter last year. Now, mobile GMV accounts for 42% of total GMV transacted in China’s retail marketplaces—compared to 36% in the previous quarter and 20% in the same quarter last year.

Alibaba positioned itself as a mobile company. Its mobile strategy is expanding its reach by attracting new consumers to its retail platforms. Alibaba introduced a large number of mobile users to its platforms. It had a successful response from both the Singles Day shopping festival and the 12-12 promotion.

Singles Day is the equivalent of Cyber Monday. It’s an annual retail holiday in China. It set a new record in e-commerce history. It processed more than 9 billion sales in a single day in 2014. Back in the 1990s, the idea of Singles Day came from several college students. They thought about the numeral form of the date—November 11, or 11-11. Soon, they started recognizing the day by purchasing small gifts for fellow single peers. Alibaba embraced the day. It started the Singles Day shopping festival.

Double 12, or 12-12, was introduced by Alibaba to promote its Taobao Marketplace. The marketplace mainly consists of small and midsize retailers.

Management believes that new mobile customers have experienced the ease and convenience of shopping on its platforms. This will help drive even more GMV growth in the future.

The Consumer Discretionary Select Sector SPDR (XLY) has decent exposure to Amazon. Amazon makes up 6.3% of XLY. Investors can consider this ETF for portfolio exposure to Amazon. Another ETF to consider for investing in the retail sector is the SPDR S&P Retail ETF (XRT). It has about 1.2% of its portfolio invested in Amazon.

Latest articles

Today, Canopy Growth announced that it acquired the Saskatchewan-based KeyLeaf Life Sciences along with entities relating to the company and its intellectual property. Here's what you need to know about the completed deal.

Yesterday, Tyson Foods (TSN) and fellow meat producers Pilgrim’s Pride (PPC) and Sanderson Farms (SAFM) took a hit to their stocks after news came out about an investigation over price-fixing allegations.

On June 24, RH (RH) was trading at $115.01, implying a rise of 21.2% since its announcement of its first-quarter earnings results on June 12. Despite the surge in its stock price, the company is still trading at a discount of 29.1% to its 52-week high.

26 Jun

Roku Stock Fell Close to 7.0% Yesterday

WRITTEN BY Aditya Raghunath

Roku stock fell 6.8% yesterday to close trading at $93.25 per share. Roku stock has lost over 9.0% in market value in the last two trading days. Prior to this pullback, Roku stock was up a whopping 235.0% year-to-date.

26 Jun

Beyond Meat Stock Up Today on New Product Launch

WRITTEN BY Rajiv Nanjapla

Today, Beyond Meat (BYND) announced that its new product, Beyond Beef, will hit markets across the US later this week.

FedEx (FDX) ended fiscal 2019 on a dismal note and reported a significant YoY decline in fourth-quarter earnings. The delivery giant posted adjusted EPS of $5.01, which was 15.2% lower than the year-ago quarter’s earnings of $5.91. The company cited sluggish revenue growth and increased expenses as the main reason behind the dismal bottom-line performance.

172.31.59.107