Alibaba.com (1688.HK) Focus on Service Offering and Transaction-Based Platform
De-emphasizing importance of membership growth After adding 12,702 new China Gold Supplier membership in 4Q10 to a total of 121,274 membership base, Alibaba reaffirmed that total CGS members in 2011 will be flattish from 2010, mainly driven by 1) its proactive focus on improving customer services and enhancing user experience and 2) factoring in the CGS 2011 launch of a 50% increase in new price package to Rmb29,800, up from Rmb19,800 previously.
Key metrics for both marketplaces also remained healthy:
International Marketplace: Revs were RMB881m (+4% QoQ, +28% YoY) in 4Q10. – China Gold Supplier (“CGS”): China Gold Supplier added 12,702 net adds, up 11.7% QoQ and 28% YoY to 121,274 paying members. The growth of net account addition has slowed as expected, as the company has switched its focus to customer retention and monetization. In 4Q10, VAS contributes over 25% of CGS revenue. CGS revenue
was Rmb857m in 4Q10, increased 28% from a year ago.
