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Alibaba’s next challenge: making money from mobile traffic


Alibaba’s IPO filing with the U.S. Securities and Exchange Commission Tuesday showed that the company is making some progress in attracting more smartphone users to its services, though it needs to figure out how to make money off the growing number of mobile shoppers.


“Buyers, sellers and other participants are increasingly using mobile devices in China for a wide range of purposes, including for e-commerce,” Alibaba said in the filing. “If we fail to successfully adapt to these changes, our competitiveness and market position may suffer.”


The filing contained some upbeat numbers showing that more shoppers are coming to Alibaba’s services through smartphones and tablets. During the fourth quarter of last year, mobile transactions accounted for about 20% of all the transactions on Alibaba’s Chinese shopping sites, up nearly threefold from 7.4% a year earlier. In December, Alibaba had 136 million monthly active users on mobile phones for its e-commerce services.


Still, Alibaba warned that growing transactions through smartphones may not contribute as much to its short-term earnings growth, saying that its current priority is not to maximize its revenue from mobile services. Instead, Alibaba said that it is focusing on generating more user activity and transactions, while testing out various methods to make its mobile offerings more profitable. Taobao, Alibaba’s largest shopping site, doesn’t charge transaction fees, so an increase in transactions doesn’t automatically translate to more revenue for Alibaba.


“The increasing use of mobile devices to access our marketplaces requires us to develop new monetization methods for mobile interfaces,” Alibaba said in the filing.


While the potential market for mobile e-commerce is huge in China, Alibaba is locked in fierce competition with rival Chinese Internet firms such as Tencent Holdings over the country’s 500 million smartphone users. Tencent, which operates the popular WeChat smartphone chat application, is trying to offer more e-commerce services to the messaging app’s 355 million monthly active users.


Last month, Alibaba reached an agreement to turn AutoNavi Holdings into a wholly owned unit, after taking a minority stake in the mobile map maker last year. Also last month, Alibaba raised its stake in Sina’s Twitter-like Weibo microblog business to 30% from 18%, in connection with Weibo’s IPO. Alibaba also said in the IPO filing that it now holds a 66% stake in mobile browser developer UCWeb after its most recent round of investment last month. In March, Alibaba said it took a minority stake in TangoMe, a Silicon Valley startup that runs the Tango mobile video call and messaging app.

阿里巴巴上月达成一项协议,将高德软件有限公司收为全资子公司。这是阿里巴巴继去年收购这家移动地图公司少数股权之后采取的进一步行动。同样是在上月,阿里巴巴将对新浪微博的持股比例从18%提升至30%,这与微博首次公开募股有关。阿里巴巴在IPO文件中还称,经过上个月的新一轮投资,该公司目前持有移动浏览器开发商UCWeb 66%的股权。今年3月份阿里巴巴曾表示,该公司收购了TangoMe的少数股权,TangoMe是一家硅谷初创企业,运营Tango移动视频通话和信息应用软件。


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