Alibaba's Live Streaming Strategy Sparks SME Interest, Highlights Cloud Market Competition in China

Zinger Key Points
  • Chinese cloud giants embrace live streaming to boost sales, igniting SME-focused price competition.
  • Huawei leads with 90% discounts, Alibaba's session amasses 2.3M viewers, reflecting intense rivalry.

Chinese cloud service giants are adopting live streaming to promote and sell their products, sparking a price war to attract small and medium-sized enterprises (SMEs). 

Huawei Technologies pioneered this trend with six live sessions starting March 22, offering discounts of up to 90% as part of a “cloud purchase festival.” Alibaba Group Holding Ltd BABA and Inc JD followed suit, hosting their live broadcasts. 

Alibaba’s session drew over 2.3 million viewers and secured over 1,000 SME clients for their cloud services, SCMP reports

Also Read: Alibaba’s Bold Actions – $4.8B Stock Repurchase and Revolutionary One-Hour Global Delivery Plan

The session was notably led by internet sensation Luo Yonghao, highlighting the competitive edge live streaming adds to cloud service promotions.

This shift towards live streaming for product promotion reflects the intense competition among cloud providers to offer lower-priced services, benefiting SMEs with affordable app development, website launching, and data storage options. 

Alibaba and Tencent Holdings Ltd TCEHY announced significant price reductions of up to 50% in May last year, with Alibaba Cloud further slashing prices on 100 core products this February. 

Such competitive pricing strategies are essential for gaining an edge in the market, according to analyst Liu Lihui from IDC.

In the fourth quarter of 2023, China’s spending on cloud infrastructure services surged to $9.7 billion, marking a 22% year-over-year increase and claiming 12% of the global cloud expenditure, per a report. Throughout 2023, the Chinese cloud market experienced a 16% growth, surpassing the previous year’s 10% rise. Forecasts suggest this growth trend will persist, with an anticipated 18% increase in 2024.

During the final quarter of 2023, Alibaba Cloud, Huawei Cloud, and Tencent Cloud, China’s top cloud service providers, dominated the market, achieving 28% growth and capturing a 74% market share.

Investors can gain exposure to critical Chinese tech companies via IShares China Large-Cap ETF FXI and KraneShares Trust KraneShares CSI China Internet ETF KWEB.

Price Action: BABA shares traded higher by 0.70% at $72.96 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo by Fooksou Lamimo via Wikimedia Commons

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