Global Ad Trends: Alibaba controls the world’s third-largest ad business

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The Alibaba stands to make $23.5bn from selling ad inventory across its e-commerce properties this year, a rise of 6.6% from 2019. Warc released this in its latest Global Advertising Trends report: The pivot to e-commerce summarising the latest research from Warc’s Data platform.

This gives Alibaba control of the third-largest advertising business globally, behind only Alphabet and Facebook. Amazon places fourth; it stands to make $18.1bn in 2020 – up 35.6% from 2019.

Global, E-Commerce advertising spend, US$Billion and year-on-year % change

Alibaba controls the world’s third-largest ad business

Alibaba’s ad business has cooled markedly this year – along with the wider Chinese online market (its core trading territory) – and growth now trails local rivals such as JD.com and Pinduoduo, resulting in lost share.

Elsewhere, Chinese social commerce platform Pinduoduo is set to see its ad income leap 33.8% to over $5bn, ahead of local rival JD.com on $3.6bn. None of the e-commerce platforms monitored by Warc is expected to witness a fall in advertising revenue this year.

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Advertising spend on e-commerce platforms is set to rise sharply this year despite the global recession – reaching a total of $58.5bn – as brands look to capitalise on the boom in online shopping as a result of the Covid-19 outbreak, finds Warc, the international marketing intelligence service.

Advertising investment across e-commerce sites such as Amazon, Tmall and Rakuten, omnichannel retailers such as Walmart and Carrefour, and social commerce on platforms such as Pinduoduo and TikTok is set to increase 18.3% worldwide, growing 30 times faster than the wider online ad market and in stark contrast to a forecast fall of -8.1% for the total advertising industry this year.

Read Also:  Alibaba sets Singles Day sales record of $38.4bn

Consumers will spend an additional $183bn online this year due to Covid-19

Online sales are set to rise by 30.4% to $2.9trn worldwide this year, according to data from Edge by Ascential. This represents a forecast upgrade of 8.2 percentage points – $183bn – since the Covid-19 outbreak began. Domestic growth rates range from +19.0% in the UK, to +22.1% in the US and +37.6% in China.

Taken together, e-commerce sales will account for 88% of global retail growth in 2020. The top five platforms will tighten their grip on the market this year, turning over an additional $529bn combined as a result of the outbreak. E-commerce platforms Alibaba (+$221bn), Pinduoduo (+$122bn) and Amazon (+$92bn) have seen the sharpest forecast upgrades since the outbreak.

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Read Also:  Covid-19 Has Flipped the Value Proposition of Omnichannel Shopping For Constrained Consumers

Advertising spends – particularly within the FMCG sector – is moving online as a result of the shifting complexion of sales since the Covid-19 outbreak. Over 8% of Unilever’s business is now done online – the company made 71% (€2.2bn) of its total 2019 e-commerce sales in just the first six months of 2020.

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Global Ad Trends: Alibaba controls the world’s third-largest ad business - Brand SpurGlobal Ad Trends: Alibaba controls the world’s third-largest ad business - Brand Spur

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Global Ad Trends: Alibaba controls the world’s third-largest ad business - Brand SpurGlobal Ad Trends: Alibaba controls the world’s third-largest ad business - Brand Spur

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