Digital Advertising

Alibaba’s Taobao shifts focus to China’s 900 million millennials as it taps into maker culture

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By Danielle Long | Asia Pacific Correspondent

August 15, 2017 | 6 min read

Alibaba’s online marketplace Taobao has shifted its focus to millennials with the demographic now accounting for the majority of buyers and 30% of merchants on the platform.

Alibaba Group chief marketing officer Chris Tung told The Drum this generation has changed the way people use Taobao, which is no longer a platform for bargain purchases but a place to source unique and customised products.

“The trend we are observing is that for the younger generation, Taobao has become a platform that they identify with, can pursue their dreams on and demonstrate their passions and even to make friends.

Alibaba CMO Chris Tung

Alibaba Group CMO Chris Tung at the Taobao Makers Festival in China

“We have noticed that, over the last few years, those in the post 90s generation and even generation Z, have taken strides to open stores on Taobao and become owners and CEO of their own companies, growing their own brands.

“Young people are the core constituents on Taobao Marketplace, with the majority of buyers coming from the post-80s and post-90s generations, and close to 30% of the millions of merchants that we have in total on Taobao are from the post 90s generations. This number is increasing every day,” added Tung.

The shift to positioning Taobao as a makers platform comes as Alibaba seeks to distance the brand from the counterfeit goods market that has flourished on the marketplace, which has more than 10 million vendors. In recent months, Alibaba has launched a number of initiatives, technology advancements, and partnerships as well as calling on the government to help its fight against counterfeit goods.

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Taobao was China's largest mobile commerce destination in terms of GMV in 2016 and, as of June this year, it has more than 189 million daily active users on its app.

Taobao has embraced the growing maker culture, and its booming millennial following, which has seen young people flock to the site to buy and sell unique items and products. To showcase this culture, Alibaba recently hosted the Taobao Makers Festival - a five-day event to engage some of China's 900 million millennials with the brand.

“After a successful event last year, we saw a very dramatic increase in stores joining Taobao which follow the Maker philosophy,” said Tung.

“The concept of “making” is very important to us. China has always been a strong manufacturing base but now the “making” is moving to a new era where individuals are driving innovation and creating global trends instead. It is this spirit which we are looking to nurture and celebrate.”

“We believe the future is driven by young people with passion and innovation, and our goal is to make sure that our platform is unique in what it can provide for them. In this way, the Taobao Maker Festival is the perfect complement to this strategy bringing this online creativity into an exciting offline experience,” said Tung.

In a bid to engage with this lucrative demographic, Alibaba has introduced a number of initiatives, including data driven technologies to help further customise and personalise the experience.

The Taobao app not only provides product recommendations, based on users interests and searches, it also connects users with similar interests for socialising. Alibaba has also applied a similar model for businesses to target consumers and create virtual communities to ensure better customer experiences.

“Big data means that everyone’s Taobao is different, and this personalised shopping experience for everyone is why over 500 million users use the Taobao App for more than 20 minutes a day,” said Tung.

“We have deconstructed the traditional selling model for our Taobao community. Now the buyers and sellers, representing supply and demand are more precisely matched through our platform and the Alibaba big data system. There is a level of understanding that has never been possible before, and we have created a new era of user-driven development.”

“Taobao is a paradise for young makers who can use the platform to demonstrate where their true passions lie and enables them to pursue their ambitions. What they’re selling attracts other young people who share the very same passions and interests that satisfy needs in their lifestyle.

“These individuals are in the process of upgrading their lifestyles and consumption habits to match the changing times. People, especially young people, are now buying for themselves more than they ever have before. So, we want to help them fulfil needs and requirements that are evolving by offering uniqueness and diversity,” said Tung.

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