October 22, 2021

BABA, 1024 HK, 700 HK, ByteDance Ltd., JD, PDD, TCEHY, VIPS, WB, Xingyin Information Technology (Shanghai) Co. Ltd

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Sources and Background

27 sources, comprising 10 domestic vendors, 9 international vendors and 8 agencies, representing 14.4 billion yuan ($2.2 billion) sales through Taobao and Tmall in 2020

Repeat Sources 25 from OTR Global’s July report

Interviews Oct. 8–18

Averages Straight

Traffic Sluggish, Ad Prices Increase
Vendors’ sales growth on Tmall and Taobao during FY2Q22 was limited by slowing traffic, tough comparisons, a weak economy and continued intense competition.

  • FY2Q22 vendor sales through BABA’s Tmall, Taobao up 6%–11% yy (vs. up 7%–12% yy in FY1Q22); sluggish traffic growth biggest headwind
  • Vendors’ overall FY2Q22 cost paid to BABA platforms at 15%–20% of sales (as in FY1Q22); ad prices increased because of vendor competition
  • FY2Q22 vendors’ total spending up 8%–13% yy (vs. up 15%–20% in FY1Q22); some holding back spending until Singles’ Day
  • Area to Watch: New Data Security Law having no impact on use of BABA’s ad tools
By Meredith Sun