Chinese e-commerce giant Alibaba (BABA) has not only successfully transitioned from desktop to mobile, but also has grabbed the largest share of mobile Internet ad spending in China. The Hangzhou-based company’s biggest rivals Baidu (BIDU) and Tencent (TCTZF) lag far behind. According to research firm eMarketer, digital and mobile Internet ad spending in China is expected to jump from $31.09 billion in 2015 to $40.42 billion this year despite a slowdown in the Chinese economy.
Alibaba’s mobile ad revenue to jump 54% this year
Shelleen Shum, an analyst at eMarketer, said the growth is driven by the growing share of young, Internet-savvy consumers who spend more than the older generation. Shum pointed out that the consumer media habits have shifted towards mobile. As a result, mobile ad spending will see steady growth. Alibaba operates the largest B2C and C2C shopping platforms in China, which gives it a distinct advantage over rivals.
BNP Paribas analyst Ling Vey-sern recently said the Hangzhou-based company’s “rich ecosystem of financing, payment, and marketing solutions” keeps about 500 million customers tied to its platforms. According to eMarketer, the Jack Ma-led company’s mobile ad revenue is expected to jump 54% to $9.15 billion from last year’s $5.91 billion. Baidu is estimated to generate $7.1 billion in mobile ad revenue, followed by Tencent with $2.76 billion.
Alibaba secures $3 billion loan
According to eMarketer, mobile video will be a significant growth driver this year, accounting for $3.1 billion of the overall market. Alibaba acquired Youku Tudou, China’s largest online video service, for $4.2 billion last year. As of December 31, 2015, there were 620 million people accessing Internet through mobile devices in China.
Separately, the e-commerce giant announced that it had secured $3 billion five-year loan from a group of eight arrangers. The company is likely to use fresh funds to invest in businesses around the world as it expands beyond its core e-commerce base. Since last year, it has acquired Youku Tudou and purchased stakes in Snapchat, Groupon, Snapdeal and PayTM. Alibaba is also in talks to invest in India’s largest e-commerce player Flipkart.
