Alibaba Group Holding Ltd (NYSE:BABA) has found a new way to market themselves: online consumers who spend large amounts of money.
On November 11th, the world's largest shopping day because of the Chinese festival Single's Day, the Shanghainese restaurateur Meng Cui Yi spent $90,000 on furniture, grocieries, and Burberry clothing from Alibaba's online store. At the end of the day, she recieved an invitation to join Alibaba's exclusive APASS program.
100,000 people partake in the Alibaba Passport (APASS) Program, a rewards program for those who spend $15,000 a year or more on Alibaba's e-commerce sites, though Bloomberg reports that customers spend more than $45,000 a year on average. The marketing stint attracts high spenders who display their purchases on social media and encourage others to buy from Alibaba.
The program combines the benefits of American Express Black Card, Amazon Prime, and Facebook to give members vacations, lowered prices, and services. Those partaking are encouraged to join shopaholic communities online who promote Alibaba through forums and blogs.
The likelihood of being invited to join APASS depends on a shopper's user score, which in turn depends on how often and how credible the interactions each customer has with others online. The rewards of the program purchase loyalty that are transformed into marketing stunts that make heavy use of social media. 10 members of APASS were invited in September on an all-expenses paid nine-day shopping vacation to Italy to visit Mezzacorona-operated vineyards, La Perla's main lengerie shop, and a Maserati factory. Much of the trip was recorded on camera and streamed live on the internet television company Youku Tudou (NYSE: YOKU) and online retail site Tmall.
Alibaba hopes the program will help the company maintain increasing growth rates in the midst of a decelerating Chinese economy as well as the rise of competitors like JD.com that are attracting big spenders from urban areas.
Duncan Clark, early adviser for Alibaba and founder of the investment advisory firm BDA China, 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."