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Digitimes Research: Alibaba faced with difficulties expanding overseas
Kristina Shi, DIGITIMES Research, Taipei

China-based e-commerce operator Alibaba has strengthened its operations utilizing the use of mobile devices, with transactions concluded on its e-commerce platform through mobile devices accounting for 32% of its total online sales in the second quarter of 2014, according to Digitimes Research.

With rival company Tencent expanding its business through the use of social networking software and its cooperation with online shopping operator JD.com, Alibaba has also been trying to further improve the traffic flows of its e-commerce through the launch its own social networking software and acquisitions of search engine and e-map operators.

Alibaba has also strengthened its cooperation with physical stores, expanding its online-to-offline business model to also include offline-to-online model.

Alibaba has also stepped up deployments in overseas markets, particularly in North America and committing investments in local companies. However, Alibaba will face some operating issues including the high consumer's loyalty toward the market leader Amazon for its high-quality and value-added services, different shopping behavior, and concerns over the storage of transaction data in a China-based firm.

While Alibaba will see its online transaction values continue to expand in China, its business model that counts on advertisements and services will be difficult to transfer from terminal ends to mobile devices. As more online transactions are shifting to mobile devices, it will be difficult for Alibaba to ramp up its profits. But the massive consumer data that Alibaba has compiled from various segments of its e-commerce operations may be useful for its cloud data development.

However, due to different consumer demand and cultural differences, it is also difficult for Alibaba to duplicate its successful business model it did in China to overseas markets, Digitimes Research commented.

Content from this article was part of a complete Digitimes Research Chinese-language report that has not yet been translated into English. If you are interested in an English version of the report or wish to receive more information about the report, click here to contact us and we will get back to you as soon as possible. Digitimes Research also provides quarterly tracking services for market sectors such as China Smartphone, China Smartphone AP, Taiwan ICT and Taiwan FPD. Click here for more information about Digitimes Research Tracking services.

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