Saturday, March 07, 2015

Advertising on Alibaba Marketplaces heats up

According to an article published by the WSJ this week, advertisers are jockeying for position on Alibaba properties; tbao and tmall where daily banner ads run as much as 180,000 yuan ($29,242).

From the various seller responses, it is not clear that future will include the same vibrant diverse marketplace as it does today, which was perhaps the primary driver that led to Alibaba's success.

The article paints a picture where Alibaba offers an auction environment, where sellers with the deepest pockets will outlast the smaller players that cannot keep pace with necessary spend to maintain ideal product placement on Alibaba properties.

But this is not a new story.  Sellers on Alibaba can draw from the experiences of eBay sellers, who at first prosper, yet as the relationship dynamic shifted in favor of eBay, sometimes find themselves increasingly at odds with eBay's policies.

Hence, if Alibaba continues this path, will it also face a similar path to growth as it's US counterparts eBay and Amazon, which depend on both volumes and community growth across both buyers and sellers?

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