A while ago, Alibaba Group Holding Ltd (NYSE:BABA) made its Wall Street debut with a bang. Not one to rest on past laurels, the company has a huge growth plan charted for the future. Performance Marketeer Frank Ravanelli explained how affiliate marketing would be the logical step forward for the company and presented a case study explaining it.
It is clear that a strong economy translates into burgeoning e-commerce transactions. But what happens when the economy falls? E commerce companies will still do well due to their competitive pricing, which is advantageous for the customer and sustainable for the seller. So, in either case, online market places have a clear advantage over their physical counterparts. Alibaba Group Holding Ltd (NYSE:BABA) already has a healthy cash inflow from its public offering. Using improved online tracking and data analytics, the company is sure to profit through performance driven affiliate marketing.
“It is clear Alibaba Group Holding Ltd (NYSE:BABA) wants to partner with companies who can generate qualified traffic, including mobile browsing,” stated Ravanelli.
Alibaba already has an affiliate program in place for its consumer facing AliExpress portal. It has plans to expand its online empire outside the boundaries of China and to this end, the company has decided to strike deals with foreign retailers which is a much better strategy than selling its own goods in alien markets. It is imperative that Alibaba creates an international affiliate program by partnering with entities which already have a good local customer base.
But Ravanelli warned that the Chinese e-retailer must think twice before paying for a profitable deal. “If Alibaba Group Holding Ltd (NYSE:BABA) pays for partnerships at the inflated stock price value those target companies will have […] then it will take years to create any real value from such strategic investments,” he explained.
Any future profit that Alibaba might make from its acquisition would be nullified by the high price it had to pay to make the acquisition initially.
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