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Baichuan and Alibaba Group Holding Ltd (BABA)’s Plan To Profit From China’s Smartphone Shoppers

With one new development after the other, it looks like Alibaba Group Holding Ltd (NYSE:BABA) refuses to leave the headlines. This time it is Baichuan – Alibaba’s initiative to encourage mobile app developers to use its platform to build apps. In Alibaba’s own words, the platform will be ‘cheaper and faster’ for creating mobile apps. The Chinese online major claimed that its ecosystem will work out as a cost effective solution for startups.

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Alibaba Group Holding Ltd (NYSE:BABA) explained that through Baichuan, developers will be able to access software and data analytics tools. Developers choosing Baichuan will be offered technical support through AliCloud, the Alibaba counterpart of Amazon.com, Inc. (NASDAQ:AMZN) Web Services. The company will also be putting its acquisition, analytics provider Umeng to good use. Umeng will supply developers with data pertaining to several transactions such as buying patterns of users.

With Baichuan, Alibaba Group Holding Ltd (NYSE:BABA) hopes to accomplish in China what Amazon.com, Inc. (NASDAQ:AMZN) did with its Amazon developer services. Reports tell that last year China saw around 500 million mobile users who spent $18 billion on that platform. Alibaba is confident that attracting more mobile developers to use its platform for app development would divert the burgeoning mobile traffic to its main offering in the online retail sector and this will mark a consequent increase in revenue. But it is still unclear if Alibaba will be extending the service to developers located outside China.

Alibaba Group Holding Ltd (NYSE:BABA) boasts that it has a variety of services that could make a developer out of anyone. Though it isn’t concrete yet, there is news that the company might also be offering financial support to deserving apps. Industry experts believe that Alibaba’s latest offering is a clear indication of how mature the Chinese mobile app market has become. However, they felt that Alibaba must tread with caution so that it does not bite more than it could chew.

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