Rural penetration goal of China Telecom, Alibaba partnership
Chinese e-commerce giant Alibaba has partnered with compatriot state-run mobile operator China Telecom to boost the adoption of mobile commerce in rural and isolated localities across China.
Under the agreement, Alibaba and China Telecom will offer 14 models of mobile phones, named “Tianyi Taobao Shopping Handsets,” with an embedded application for mobile commerce, which will provide buyers with access to Alibaba’s Taobao Marketplace.
Six models will be more expensive handsets from local makers Coolpad, Hisense and TCL and will come with the Mobile Taobao app, which is the most popular mobile commerce app in China with over 200 million monthly active users. Another eight models, made by local brands Uniscope, Ctyon and Kingsun, will be sold at less expensive prices and will feature Alibaba’s own operating system YunOS, which will enable users to have an Alibaba account for mobile shopping and cloud-based storage.
The devices will be available through Alibaba’s Tmall online store and at China Telecom’s stores across rural China. With this partnership, Alibaba and China Telecom are targeting residents living in third-and fourth-tier cities and rural areas across the country, where smartphones have become the most convenient platform for the increasing penetration of mobile commerce, due to the still low penetration of fixed broadband services and the high cost of PCs.
According to a previous study by IResarch, mobile commerce in China is experiencing a rapid growth, with revenues of nearly $150 billion in 2014, an increase of over 239% compared to the previous year. The study also revealed that the local mobile commerce market is forecast to reach revenues of $644 billion by 2018. Alibaba Group, China’s largest e-commerce company, currently leads the local mobile commerce market with 86% market share.
