Alibaba Group Holding Ltd (NYSE:BABA), China Telecom Team Up To Sell Phones

Chinese e-commerce giant, Alibaba Group Holding Ltd (NYSE:BABA) has teamed up with China Telecom Corporation Limited (ADR) (NYSE:CHA) to sell affordable smartphones.

Analyst predict major swings in the market… will it affect BABA?

Target is to boost communication in rural areas and small towns where people haven’t fully embraced the smartphone culture. The mobile devices will be sold with an operating system from the country itself. The OS is called YunO while the handsets are called Tianyi Taobao. The name is coined from the Alibaba’s Taobao online store.

China Telecom announced that those who purchase the handsets would receive free 2G mobile data service for four months. The offer is aimed at pulling in more customers. The partnership is also good for both because it provides a chance for both companies to gain more ground. It is particularly aimed at promoting the spread of mobile technology especially in a time when competition makes it harder as more expensive devices continue to thrive.

Other deals in which Tabao is involved include the Coolpad models. The six devices from this brand will have the Tabao app preinstalled. The app has a solid loyalty of about 200 million users giving it a solid position as the most widespread shopping application in China. A few more brands will give users the option to install the application.

Online shopping has a massive potential in China. This is because of the large number of people who access the internet through mobile devices, with the current number being just about 557 million. Online shopping has become increasingly popular due to its ease of use, wide reach and absence of haggling combined with variety from which shoppers can choose from. The internet has also become more refined over the years, thus opening doors to more e-commerce opportunities.

Access to internet via mobile phones takes the biggest percentage of internet use worldwide. For most businesses and organizations, this is an opportunity to exploit the underused opportunities. Alibaba reported that its 86% of mobile e-commerce came from the Chinese market.

 

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Culver Stinson

Culver Stinson

Stinson is US Markets Daily’s Senior Producer for News & Public Affairs.