SEC Company Response from Alibaba Group Holding Ltd (BABA, BABAF, BBAAY) (CIK 0001577552) (BABA) — Aug 22, 2014
Alibaba Group Holding Ltd (BABA, BABAF, BBAAY) (CIK 0001577552)
Date: Aug. 22, 2014 · CIK: 0001577552 · Accession: 0001193125-14-318466
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-195736
Letter
Correspondence
SIMPSON THACHER & BARTLETT
ICBC TOWER, 35TH FLOOR
3 GARDEN ROAD
HONG KONG
(852) 2514 - 7600
FACSIMILE (852) 2869-7694
DIRECT DIAL NUMBER
+852-2514-7630
E-MAIL ADDRESS lchen@stblaw.com
August 22, 2014
VIA EDGAR
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Attention:
Mr. Jarrett Torno, Staff Accountant
Ms. Mara L. Ransom, Assistant Director
Ms. Jennifer Thompson, Accounting Branch Chief
Mr. Dietrich King, Legal Branch Chief
Ms. Lisa Kohl, Senior Attorney
Re:
Alibaba Group Holding Limited
Amendment No. 4 to Registration Statement on Form F-1
File No. 333-195736
Ladies and Gentlemen:
Further to telephone discussions between Alibaba Group Holding Limited (the “Company”) and members of the staff (the “Staff”) of the Securities and Exchange Commission, we submit this letter on behalf of the Company to provide additional information requested by the Staff regarding the Company’s third-party marketing affiliate platform and how the Company generates revenue from the traffic that its third-party marketing affiliate program brings to the Company’s marketplaces, as set forth below.
* * * * *
Leiming Chen Philip M.J. Culhane Daniel Fertig Anthony D. King Celia C.L. Lam Chris K.H. Lin Jin Hyuk Park Kathryn King Sudol Christopher K.S. Wong
Resident Partners
SIMPSON THACHER & BARTLETT, HONG KONG IS AN AFFILIATE OF SIMPSON THACHER & BARTLETT LLP WITH OFFICES IN:
NEW YORK BEIJING HOUSTON LONDON LOS ANGELES PALO ALTO SÃO PAULO SEOUL TOKYO WASHINGTON, D.C.
SIMPSON THACHER & BARTLETT
- -
Introduction
Before going into detail, the Company would like to emphasize three points regarding the operation of the Company’s third-party marketing affiliate program:
(i) the Company’s China retail marketplaces are not reliant on third-party traffic.
(ii) Revenues and costs attributable to third-party marketing affiliates are not material.
(iii) The Company’s third-party marketing affiliate program is highly integrated into its product offerings and it utilizes a second-click revenue model.
Taobao Marketplace is a shopping destination and therefore not reliant on third-party traffic.
The Company advises the Staff that, as disclosed in the Company’s Registration Statement on Form F-1, Taobao Marketplace is China’s largest shopping destination. Unlike shopping sites in the United States or other geographies, Taobao Marketplace does not rely on other sites to acquire traffic. Taobao Marketplace is known as a site for consumers to find anything, anytime, anywhere. The Company’s China retail marketplaces have 796 million product and service listings across over 100 product categories and approximately 2,000 sub-categories. Similarly, Mobile Taobao has become a destination for products and services for the Company’s users’ everyday lives, such as booking cinema tickets and taxis, and ordering take-out meals. Therefore, if consumers want to buy something, they generally come directly to Taobao Marketplace rather than through a search engine or third-party site.
Revenues and costs attributable to the Company’s third-party marketing affiliate program and the related online marketing activities are immaterial to overall revenue.
The Company advises the Staff that revenue directly derived from P4P and display marketing services attributable to the traffic from third-party marketing affiliates represents 6.6%, 6.4% and 6.0% of the Company’s total revenue in fiscal years 2012, 2013 and 2014, respectively. The Company’s revenue growth has not depended on an increasing contribution of revenues generated from third-party marketing affiliates.
The Company further advises the Staff that traffic acquisition costs recorded in cost of revenue represent 5.0%, 4.6% and 4.0% of the Company’s total revenue in fiscal years 2012, 2013 and 2014, respectively, and online marketing expenses recorded in sales and marketing expenses represent 1.0%, 1.1% and 1.0% of the Company’s total revenue in the same periods. As illustrated in the historical periods and the fact that Taobao Marketplace is already the top shopping destination in China, the Company expects that traffic acquisition costs and online marketing expenses as percentages of total revenue will remain relatively stable and as small percentages of total revenue.
SIMPSON THACHER & BARTLETT
- -
The Company does not separate revenues between its own websites and third-party websites because of the integrated nature of the Company’s product placement offering.
The Company advises the Staff that it views online marketing services on its own websites and those of third-party marketing affiliates as one comprehensive set of offerings to its merchants. Merchants place P4P and display marketing services on the Company’s websites and those of the marketing affiliates by using the Company’s auction or bidding systems. The inventory of the Company’s websites is consolidated with the inventory of websites of third-party marketing affiliates on the Company’s systems. If merchants participate in the third-party marketing affiliate program, the ultimate placement of the online marketing services on the Company’s websites or those of third-party marketing affiliates is based upon the results of the Company’s proprietary algorithms that place the services for the merchants in a way that will enhance the return on their marketing expenditures. The third-party marketing affiliate program acts as another channel for the Company’s merchants to attract other potential consumers. Merchants’ total spending on online marketing services, which is what ultimately drives the Company’s online marketing service revenue, is a function of their expected returns on marketing expenditures and the Company does not believe that it is affected by the source of the consumer traffic.
To facilitate the Staff’s understanding of how merchants register and bid for the online marketing services on the Company’s auction system, the Company has attached as Appendix A of this letter screen shots illustrating the procedures. In addition, the Company has attached as Appendix B of this letter an English translation of a sample contract between the Company and its merchants relating to the integrated product placement offering covering all consumer traffic.
P4P versus display marketing services.
The Company advises the Staff that the substantial majority of the online marketing revenue earned from the traffic from third-party marketing affiliates was related to the provision of P4P services. In fiscal year 2014, less than 0.5% of total revenue was related to display marketing revenue earned from the traffic from third-party marketing affiliates. The Company believes that its P4P service, which is a performance-based marketing tool charged on the cost-per-click model, is more suitable for the small to medium sized merchants doing business on the Company’s marketplaces. Given the relative insignificance of display marketing services, the Company’s discussion below of how the Company generates revenue from its third-party marketing affiliate program is focused on the provision of P4P services.
SIMPSON THACHER & BARTLETT
- -
Third-party marketing affiliate program – a second-click revenue model.
The Company advises the Staff that the third-party affiliate program operated by Alimama using merchant’s marketing materials utilizes a second-click revenue model to generate revenue for the Company. In other words, the Company’s proprietary algorithms display a merchant’s P4P product placement on an affiliate’s website in order to divert users who click on such links back to an Alibaba landing page, where a number of merchant product placements are presented and where there is a possibility that a click on that page may generate revenue (the “second click”). These product placements on the landing page include placements from merchants participating in the third-party marketing affiliate program and those who do not participate in the Company’s online marketing program. In addition, the landing page may show organic product results from other merchants based on algorithms taking into account relevance and other factors. The Company’s ability to generate revenue (if any) from such affiliate’s traffic and the payment of any traffic acquisition costs to the affiliates depend on which product placement is second-clicked and whether a transaction eventually takes place on Tmall or Juhuasuan (resulting in transaction commission). The table below outlines a number of scenarios related to revenue generated and traffic acquisition cost, or TAC, incurred given the Company’s second-click revenue model:
Revenue
Cost
On Alibaba landing page, user “second clicks” on:
Revenue generated by the Company?
TAC payable under fixed
cost
arrangements?
TAC payable under fixed
percentage arrangements?
Merchants participating in P4P services through affiliate marketing program
Yes (#)
Yes
Yes
Merchants not participating in P4P services through affiliate marketing program, but participating in Alibaba online marketing program
Yes
Yes (*)
No
Merchants not participating any P4P services (i.e. organic placement)
Maybe (^)
N/A
N/A
(#) Represents approximately 6% of total revenue directly related to traffic from third-party marketing affiliate as previously disclosed.
(*) Under fixed cost arrangements, the Company is required to pay TAC to the third-party marketing affiliates in the contracted amounts with or without any revenue generation activities initiated by the incoming traffic.
(^) Transaction commission is earned only if the transaction took place on Tmall or Juhuasuan.
SIMPSON THACHER & BARTLETT
- -
As illustrated above, not all revenue generated from the traffic from third-party marketing affiliates result in a TAC payable to them. The Company does not attempt to allocate TAC incurred for each revenue stream because the Company believes that it would be arbitrary and neither the Company nor the merchants would find it meaningful.
The second-click revenue model on traffic from third-party marketing affiliates was introduced by the Company to enhance the user experience, by providing more varieties of relevant products or merchants for browsing and selection by consumers on Alibaba landing pages. The Company believes that this also enhances the return on investment by merchants, by filtering the incoming traffic to specific products appealing to the consumers without the merchants incurring a charge at the first click on the affiliate websites.
The Company has attached as Appendix C of this letter illustrative screen shots of how P4P marketing materials are presented on the third-party affiliate websites and how the traffic is diverted to an Alibaba landing page.
Online marketing conducted by the Company.
The Company advises the Staff that the Company from time to time engages in online marketing activities with external websites using its own marketing materials to fulfill corporate marketing initiatives for the benefits of its services, websites or general branding and consumer awareness purchases. This program is operated by the marketing departments of Taobao Marketplace, Tmall or Juhuasuan. For instance, the Company may place an advertisement about “future cool trend by Tmall” on an external website where it diverts the traffic to an online video introducing different product categories on Tmall where the Company introduces its new consumer services. At the end of the online video the traffic is further diverted to, for instance, the fashion category on Tmall. The Company has attached as Appendix D of this letter illustrative screen shots of this advertising program. These marketing expenses are not variable costs but incurred at the Company’s discretion to attract awareness or traffic and such activities may not necessarily tie to revenue generation objectives or a specific revenue stream. Accordingly, such expenses are classified as sales and marketing expenses.
Fixed cost and fixed percentage arrangements with third-party marketing affiliates.
The Company advises the Staff that the Company enters into contracts with third-party marketing affiliates, under fixed cost arrangements or fixed percentage arrangements, in respect of its third-party marketing affiliate program. In fiscal 2014, 39% of the TAC incurred by the Company was related to third-party marketing affiliates that had fixed cost arrangements. Under the fixed cost arrangement, the Company is obligated to pay a contracted fixed amount for a specific slot on the affiliate website for a specific period of time. The placement of marketing materials is determined by the Company’s systems and algorithms and monetization takes place on the diverted traffic through the second-click revenue model, as discussed above. In effect, the Company is buying out all the traffic at a pre-determined contracted amount whether or not revenue can be generated from its merchants. Under the fixed percentage arrangement, the Company shares a pre-agreed percentage of the online marketing revenues with the third-party marketing affiliate when and only if the traffic diverted to the Company’s marketplaces results in a click on marketing materials of merchants participating in the third-party marketing affiliate program. The Company also enters into contracts with external websites (most of which are also the Company’s third-party marketing affiliates) in similar form and under similar terms and conditions.
SIMPSON THACHER & BARTLETT
- -
The Company has attached as Appendix E and Appendix F of this letter English translations of sample contracts between the Company and third-party marketing affiliates under fixed cost and fixed percentage arrangements, respectively.
* * * * *
SIMPSON THACHER & BARTLETT
- -
If you have any question regarding this letter or enclosures, please do not hesitate to contact me at +(852) 2514-7630 (work) or lchen@stblaw.com (email) or William H. Hinman at (650) 251-5120 (work) or whinman@stblaw.com (email) or Daniel Fertig at +(852) 2514-7660 (work) or dfertig@stblaw.com (email).
Questions pertaining to accounting may also be directed to Benson Wong at +(852) 2289-1304 (work) or benson.wb.wong@hk.pwc.com (email) or Ricky Shin at +(852) 2289-1356 (work) or ricky.w.shin@hk.pwc.com (email), both of PricewaterhouseCoopers, the independent registered public accounting firm of the Company.
Very truly yours,
/s/ Leiming Chen
Show Raw Text
CORRESP
1
filename1.htm
Correspondence
SIMPSON THACHER & BARTLETT
ICBC TOWER, 35TH FLOOR
3 GARDEN ROAD
HONG KONG
(852) 2514 - 7600
FACSIMILE (852) 2869-7694
DIRECT DIAL NUMBER
+852-2514-7630
E-MAIL ADDRESS
lchen@stblaw.com
August 22, 2014
VIA EDGAR
U.S. Securities and Exchange
Commission
100 F Street, N.E.
Washington, D.C. 20549
Attention:
Mr. Jarrett Torno, Staff Accountant
Ms. Mara
L. Ransom, Assistant Director
Ms. Jennifer Thompson, Accounting Branch Chief
Mr. Dietrich King, Legal Branch Chief
Ms. Lisa Kohl,
Senior Attorney
Re:
Alibaba Group Holding Limited
Amendment No. 4 to Registration Statement on Form F-1
File No. 333-195736
Ladies and Gentlemen:
Further to telephone discussions between Alibaba Group Holding Limited (the “Company”) and members of the staff (the
“Staff”) of the Securities and Exchange Commission, we submit this letter on behalf of the Company to provide additional information requested by the Staff regarding the Company’s third-party marketing affiliate platform and how the
Company generates revenue from the traffic that its third-party marketing affiliate program brings to the Company’s marketplaces, as set forth below.
* * *
* *
Leiming Chen Philip M.J. Culhane Daniel Fertig Anthony D. King Celia C.L. Lam Chris K.H. Lin Jin Hyuk Park Kathryn King
Sudol Christopher K.S. Wong
Resident Partners
SIMPSON THACHER & BARTLETT, HONG
KONG IS AN AFFILIATE OF SIMPSON THACHER & BARTLETT LLP WITH OFFICES IN:
NEW
YORK BEIJING HOUSTON LONDON LOS ANGELES PALO
ALTO SÃO PAULO SEOUL TOKYO WASHINGTON, D.C.
SIMPSON THACHER & BARTLETT
-
2
-
Introduction
Before going into detail, the Company would like to emphasize three points regarding the operation of the Company’s third-party marketing
affiliate program:
(i) the Company’s China retail marketplaces are not reliant on third-party traffic.
(ii) Revenues and costs attributable to third-party marketing affiliates are not material.
(iii) The Company’s third-party marketing affiliate program is highly integrated into its product offerings and it utilizes a second-click
revenue model.
Taobao Marketplace is a shopping destination and therefore not reliant on third-party traffic.
The Company advises the Staff that, as disclosed in the Company’s Registration Statement on Form F-1, Taobao Marketplace is China’s
largest shopping destination. Unlike shopping sites in the United States or other geographies, Taobao Marketplace does not rely on other sites to acquire traffic. Taobao Marketplace is known as a site for consumers to find anything, anytime,
anywhere. The Company’s China retail marketplaces have 796 million product and service listings across over 100 product categories and approximately 2,000 sub-categories. Similarly, Mobile Taobao has become a destination for products and
services for the Company’s users’ everyday lives, such as booking cinema tickets and taxis, and ordering take-out meals. Therefore, if consumers want to buy something, they generally come directly to Taobao Marketplace rather than through
a search engine or third-party site.
Revenues and costs attributable to the Company’s third-party marketing affiliate program and the related
online marketing activities are immaterial to overall revenue.
The Company advises the Staff that revenue directly derived from P4P
and display marketing services attributable to the traffic from third-party marketing affiliates represents 6.6%, 6.4% and 6.0% of the Company’s total revenue in fiscal years 2012, 2013 and 2014, respectively. The Company’s revenue growth
has not depended on an increasing contribution of revenues generated from third-party marketing affiliates.
The Company further advises
the Staff that traffic acquisition costs recorded in cost of revenue represent 5.0%, 4.6% and 4.0% of the Company’s total revenue in fiscal years 2012, 2013 and 2014, respectively, and online marketing expenses recorded in sales and marketing
expenses represent 1.0%, 1.1% and 1.0% of the Company’s total revenue in the same periods. As illustrated in the historical periods and the fact that Taobao Marketplace is already the top shopping destination in China, the Company expects that
traffic acquisition costs and online marketing expenses as percentages of total revenue will remain relatively stable and as small percentages of total revenue.
SIMPSON THACHER & BARTLETT
-
3
-
The Company does not separate revenues between its own websites and third-party websites because of the
integrated nature of the Company’s product placement offering.
The Company advises the Staff that it views online marketing
services on its own websites and those of third-party marketing affiliates as one comprehensive set of offerings to its merchants. Merchants place P4P and display marketing services on the Company’s websites and those of the marketing
affiliates by using the Company’s auction or bidding systems. The inventory of the Company’s websites is consolidated with the inventory of websites of third-party marketing affiliates on the Company’s systems. If merchants
participate in the third-party marketing affiliate program, the ultimate placement of the online marketing services on the Company’s websites or those of third-party marketing affiliates is based upon the results of the Company’s
proprietary algorithms that place the services for the merchants in a way that will enhance the return on their marketing expenditures. The third-party marketing affiliate program acts as another channel for the Company’s merchants to attract
other potential consumers. Merchants’ total spending on online marketing services, which is what ultimately drives the Company’s online marketing service revenue, is a function of their expected returns on marketing expenditures and the
Company does not believe that it is affected by the source of the consumer traffic.
To facilitate the Staff’s understanding of how
merchants register and bid for the online marketing services on the Company’s auction system, the Company has attached as Appendix A of this letter screen shots illustrating the procedures. In addition, the Company has attached as Appendix B of
this letter an English translation of a sample contract between the Company and its merchants relating to the integrated product placement offering covering all consumer traffic.
P4P versus display marketing services.
The Company advises the Staff that the substantial majority of the online marketing revenue earned from the traffic from third-party marketing
affiliates was related to the provision of P4P services. In fiscal year 2014, less than 0.5% of total revenue was related to display marketing revenue earned from the traffic from third-party marketing affiliates. The Company believes that its P4P
service, which is a performance-based marketing tool charged on the cost-per-click model, is more suitable for the small to medium sized merchants doing business on the Company’s marketplaces. Given the relative insignificance of display
marketing services, the Company’s discussion below of how the Company generates revenue from its third-party marketing affiliate program is focused on the provision of P4P services.
SIMPSON THACHER & BARTLETT
-
4
-
Third-party marketing affiliate program – a second-click revenue model.
The Company advises the Staff that the third-party affiliate program operated by Alimama using merchant’s marketing materials utilizes a
second-click revenue model to generate revenue for the Company. In other words, the Company’s proprietary algorithms display a merchant’s P4P product placement on an affiliate’s website in order to divert users who click on such links
back to an Alibaba landing page, where a number of merchant product placements are presented and where there is a possibility that a click on that page may generate revenue (the “second click”). These product placements on the landing page
include placements from merchants participating in the third-party marketing affiliate program and those who do not participate in the Company’s online marketing program. In addition, the landing page may show organic product results from other
merchants based on algorithms taking into account relevance and other factors. The Company’s ability to generate revenue (if any) from such affiliate’s traffic and the payment of any traffic acquisition costs to the affiliates depend on
which product placement is second-clicked and whether a transaction eventually takes place on Tmall or Juhuasuan (resulting in transaction commission). The table below outlines a number of scenarios related to revenue generated and traffic
acquisition cost, or TAC, incurred given the Company’s second-click revenue model:
Revenue
Cost
On Alibaba landing page, user “second clicks” on:
Revenue
generated by the
Company?
TAC payable
under fixed
cost
arrangements?
TAC payable
under fixed
percentage
arrangements?
Merchants participating in P4P services through affiliate marketing program
Yes (#)
Yes
Yes
Merchants not participating in P4P services through affiliate marketing program, but participating in Alibaba online marketing
program
Yes
Yes (*)
No
Merchants not participating any P4P services (i.e. organic placement)
Maybe (^)
N/A
N/A
(#)
Represents approximately 6% of total revenue directly related to traffic from third-party marketing affiliate as previously disclosed.
(*)
Under fixed cost arrangements, the Company is required to pay TAC to the third-party marketing affiliates in the contracted amounts with or without any revenue generation activities initiated by the incoming traffic.
(^)
Transaction commission is earned only if the transaction took place on Tmall or Juhuasuan.
SIMPSON THACHER & BARTLETT
-
5
-
As illustrated above, not all revenue generated from the traffic from third-party marketing
affiliates result in a TAC payable to them. The Company does not attempt to allocate TAC incurred for each revenue stream because the Company believes that it would be arbitrary and neither the Company nor the merchants would find it meaningful.
The second-click revenue model on traffic from third-party marketing affiliates was introduced by the Company to enhance the user
experience, by providing more varieties of relevant products or merchants for browsing and selection by consumers on Alibaba landing pages. The Company believes that this also enhances the return on investment by merchants, by filtering the incoming
traffic to specific products appealing to the consumers without the merchants incurring a charge at the first click on the affiliate websites.
The Company has attached as Appendix C of this letter illustrative screen shots of how P4P marketing materials are presented on the
third-party affiliate websites and how the traffic is diverted to an Alibaba landing page.
Online marketing conducted by the Company.
The Company advises the Staff that the Company from time to time engages in online marketing activities with external websites using its own
marketing materials to fulfill corporate marketing initiatives for the benefits of its services, websites or general branding and consumer awareness purchases. This program is operated by the marketing departments of Taobao Marketplace, Tmall or
Juhuasuan. For instance, the Company may place an advertisement about “future cool trend by Tmall” on an external website where it diverts the traffic to an online video introducing different product categories on Tmall where the Company
introduces its new consumer services. At the end of the online video the traffic is further diverted to, for instance, the fashion category on Tmall. The Company has attached as Appendix D of this letter illustrative screen shots of this advertising
program. These marketing expenses are not variable costs but incurred at the Company’s discretion to attract awareness or traffic and such activities may not necessarily tie to revenue generation objectives or a specific revenue stream.
Accordingly, such expenses are classified as sales and marketing expenses.
Fixed cost and fixed percentage arrangements with third-party marketing
affiliates.
The Company advises the Staff that the Company enters into contracts with third-party marketing affiliates, under fixed
cost arrangements or fixed percentage arrangements, in respect of its third-party marketing affiliate program. In fiscal 2014, 39% of the TAC incurred by the Company was related to third-party marketing affiliates that had fixed cost arrangements.
Under the fixed cost arrangement, the Company is obligated to pay a contracted fixed amount for a specific slot on the affiliate website for a specific period of time. The placement of marketing materials is determined by the Company’s systems
and algorithms and monetization takes place on the diverted traffic through the second-click revenue model, as discussed above. In effect, the Company is buying out all the traffic at a pre-determined contracted amount whether or not revenue can be
generated from its merchants. Under the fixed percentage arrangement, the Company shares a pre-agreed percentage of the online marketing revenues with the third-party marketing affiliate when and only if the traffic diverted to the Company’s
marketplaces results in a click on marketing materials of merchants participating in the third-party marketing affiliate program. The Company also enters into contracts with external websites (most of which are also the Company’s third-party
marketing affiliates) in similar form and under similar terms and conditions.
SIMPSON THACHER & BARTLETT
-
6
-
The Company has attached as Appendix E and Appendix F of this letter English translations of
sample contracts between the Company and third-party marketing affiliates under fixed cost and fixed percentage arrangements, respectively.
* * *
* *
SIMPSON THACHER & BARTLETT
-
7
-
If you have any question regarding this letter or enclosures, please do not hesitate to
contact me at +(852) 2514-7630 (work) or lchen@stblaw.com (email) or William H. Hinman at (650) 251-5120 (work) or whinman@stblaw.com (email) or Daniel Fertig at +(852) 2514-7660 (work) or dfertig@stblaw.com (email).
Questions pertaining to accounting may also be directed to Benson Wong at +(852) 2289-1304 (work) or benson.wb.wong@hk.pwc.com (email) or
Ricky Shin at +(852) 2289-1356 (work) or ricky.w.shin@hk.pwc.com (email), both of PricewaterhouseCoopers, the independent registered public accounting firm of the Company.
Very truly yours,
/s/ Leiming Chen
Leiming Chen
Enclosures
cc:
Joseph C. Tsai, Executive Vice-chairman
Jonathan Zhaoxi Lu, Chief Executive Officer
Maggie Wei Wu, Chief Financial Officer
Timothy A. Steinert, General Counsel
Alibaba Group Holding Limited
William H. Hinman, Jr.
Daniel Fertig
Simpson Thacher & Bartlett LLP
William Y. Chua
Jay Clayton
Sarah P. Payne
Sullivan & Cromwell LLP
Benson W.B. Wong
Ricky W. Shin
PricewaterhouseCoopers
Appendix A to the letter to the SEC dated August 22, 2014
An example illustrating how merchants participate in online marketing services and perform P4P bidding
Merchants participate in the P4P bidding process on the Company’s online auction system. The prerequisite to participate in the Company’s online
marketing services is being a merchant on the Company’s marketplaces. The process of how a merchant registers and enter bids is shown in the following steps.
Step 1
Merchants select the option of “placement
through third-party affiliate websites” and “placement on PC or mobile”.
Step 2
Merchants set
the nature of marketing placement by contextual preference or target group.
Step 3
Merchants set the preference of placement timing.
Step 4
Merchants set
the daily maximum online marketing spending limit.
Step 5
Merchants set
the geograp