In case you missed it, Chinese internet giant Alibaba released its latest performance numbers yesterday. As if the threefold profit growth to $2 billion in the last quarter that ended June 30 was not enough to impress investors ahead of the company’s IPO, much of that growth is coming from mobile. Year-over-year, the value of goods sold on Alibaba’s marketplaces which come from mobile transactions have increased from 12 percent to nearly a third of total volume. “Our current focus is on increasing mobile (gross merchandise volume) and user engagement,” Alibaba said in the U.S. regulatory filings, according to Reuters.
Why this emphasis on mobile sales Just look at Facebook. When it went public, investors were worried about its ability to monetize its traffic, especially on smartphones and tablets and the stock initially got a lukewarm reaction. Today the stock is trading almost double its IPO level. One of the reasons investors point to is that mobile ad revenue now accounts for over 62 percent of Facebook’s total sales.
While Alibaba is a conglomerate that owns many different kinds of Internet businesses, it’s ability to monetize its overall mobile traffic is a good sign of its ability to thrive in a world where more and more of the world’s citizens are using mobile devices to access the Internet.
Analysts that the NYT have spoken to have suggested that the IPO might ultimately value the company at more than $150 billion, roughly around the same level as Amazon ($157 billion), a BIG IPO by any standards.
It’s not just investors that need to pay attention to how fast mobile revenues are growing, marketers also need to adjust their marketing strategies and tactics accordingly. If people are not just consuming media on their smartphones, but increasingly also shopping and spending money at this rate globally, any marketing plan that does not have mobile front-and-center is outdated.