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B2B Eyes on SNS
Alibaba Group subsidiary Yahoo China has officially released a social networking product and named it as "Yahoo Guanxi" (Yahoo Relationships) on 13 October, 2008, according to the news from China Economic Times, a comprehensive economy newspaper in China. This indicates the probability that Alibaba absorbs Yahoo China into its B2B circle and develops its new type of B2B business by SNS. Actually, B2B has started its competitive march towards SNS. ECVV(www.ecvv.com) , one of the largest B2B (business to business) websites and the first B2B platform who adopts the term of pay for performance in the world, has established its own business make-friend website (www.6sns.com) early in 2006.
B2B is in urgent need of supports from SNS--B2B marketplace provides enormous opportunities for enterprises to conduct online business. Yet, it limits. B2B platform serves just as an intermediate place where people fail to communicate directly, and this shortage respectively reduces users' confidence and trust. SNS, as an online communication platform for people to share their interests, activities and experience, turns out to be its supplement. People meet each other in SNS communities through their friends, colleagues and relatives and share their information. And they are able to make their direct business communications. This undoubtedly underpins their trust and confidence.
Affected by the ongoing economy uncertainty caused by credit crunch in America, the world is immersed in the tough state. On October 27, 2008, the FTST 100 plunged 185 points after the opening. How to survive in this storm targets every company in the world. Alibaba' market share (1688-HK) fell through HKD 4 on October 20, 2008 from its highest peak of HKD 41 after its launch. The release of its networking product hints Alibaba's anxieties and actions. On the next day of its close at HKD 4, Alibaba.com announced its overseas advertising plans worth 30 million dollars to place advertisements in over 20 countries. Afterwards, its advertisements will be broadcasted on America' three major media stations as CNBC, CNN and FOX during the presidential campaign. Alibaba seems eager to find its way out.
SNS meets B2B buyers' anxious demands--Buyers want a safe business place. SNS caters to their worries because it requires real-name registration. In SNS communities buyers have the initiative to collect their required information. And they get it directly, promptly and efficiently. Most important, they have reasons to believe and trust the ads or information because they get access to it through reliable sources and there exists success stories. According to Enquiro Business to Business Survey 2007, a word-of-mouth recommendation from a colleague remains one of the most influential factors on buyers' purchase choice. However, on B2B marketplace, both sides, buyers and sellers, are actually controlled by the platform. Buyers search trade leads and sellers receive their inquiries. They rely more on the platform to do their business. When they or one side lose confidence in it, no prospective corporation will go through. SNS bonds social connections with life services, enabling members timely and immediately to know the recent purchase and consuming activities of their friends, colleagues and relatives. And they scream out those they need and then make further conducts through these networks.
B2B desires for advertising pools like SNS - SNS communities emerge like a central camp for people to carry out their Oral marketing plans. As long as customers become regular client on the marketplace, they will at the same time refer it to others. "Human beings like to speak with other human beings when making buying decisions. To get across the idea of complex products you need to have people talking about them." Jason Ewell, VP-emerging channels and partnership acquisition. Through SNS marketing, more and more customers will be attracted and then will follow and refer their favorite marketplace to others.
SNS communities are gathering spots teemed with numerous prospective customers. It is wiser to place advertisement in such concentration places than to sink their money in scattered places. E-marketer Statistics from Iresearch, China reveal that America's advertising investment on SNS websites in 2008 is predicted to reach $ 40,000.000, 169 percent increase compared to 2007. People have forecasted its potential strength. As to B2B marketplace, the introducing of SNS not only helps build customers' confidence and trust towards the platform they are using or likely to use, but it becomes an effective tool to advertise for itself. These show it is much reasonable and necessary for Alibaba to release its new product.
About the Author Jasonlaochen: e-commerce researcher focus on China's b2b (Business-to-business) market.
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