Alibaba has succeeded in converting some wealthy shopaholics in China into its marketing squad with the help of its APASS program. APASS (Alibaba Passport) is a mashup of Amazon Prime, Facebook and the American Express Black Card, according to Bloomberg.
How the APASS program works
APASS helps its 100,000 customers access various deals on trips or personal service. The benefit for Alibaba is that customers join the online community where they can talk and blog about Alibaba.
For instance, one of Alibaba customers, Meng Cui Yi, spent a whopping $90,000 to shop at the online store. Yi, who is a restaurateur by profession, buys almost everything, such as Burberry apparel, furniture, groceries, La Mer skincare and many more such products.
At the end of last week, Bruce Greenwald, the founding director of the Heilbrunn Center for Graham and Dodd Investing at Columbia Business School, sat down for a Fireside Chat with Li Lu, the founder and chairman of Himalaya Capital as part of the 13th Columbia China Business Conference. The chat spanned many different topics, Read More
By the end of Alibaba’s Singles’ Day, Meng’s purchases were piled so high at her Shanghai apartment that her husband barely had any space left to come inside the flat. Flattered by her buying habits, Alibaba sent an APASS invite to her, says Bloomberg.
In September, Alibaba took 10 APASS members on a nine-day, all-expenses-paid vacation to Italy, where they visited a Maserati factory, La Perla’s flagship lingerie store and vineyards operated by vintner Mezzacorona.
APASS a potent tool for Alibaba
APASS was rolled out two years ago, and since then, it has helped the Chinese firm encourage wealthy shoppers to keep trolling its Tmall and Taobao shopping platforms and shopping. This is seen as a potent tool for the company, as the Chinese economy is slowing, and Alibaba is struggling to keep shoppers interested.
Alibaba’s Singles’ Day sales grew at a 50% slower rate this year compared to last year. On the other hand, Alibaba is also facing fierce competition from rivals such as JD.com, which is attracting urban big spenders.
Duncan Clark, founder of investment advisory firm BDA China and an early adviser for Alibaba, said, “Standing still is not an option because competitors are nipping at their heels. It’s very much worth their while to take care of the high rollers.”
Like any other exclusive high-end program, APASS has also set a high bar for membership. To get an invite, the customer needs to spend more than $15,000 a year on Alibaba’s commerce sites. However, according to the company, customers spend more than $45,000 on an average, says Bloomberg. This is just one criteria. Shoppers also get a user score, partly for their frequency and the credibility of their interactions with customers. A high score get them closer to an APASS invite.