Netease Cloud Music announced Wednesday that it will offer its music streaming services to members of 88VIP program, a customer loyalty scheme by Alibaba.
Why it matters: Alibaba has been building out its ecosystem through new partnerships with other digital service providers. The company aims to satisfy the entirety of its users’ everyday demands without them having to leave its network of apps.
- The deal marks the first time 88VIP has offered a service outside of the Alibaba family.
- The partnership is expected to integrate the user base of both parties, improve the overall experience, and increase customer loyalty.
- Netease Cloud Music claimed 800 million registered users in April.
Read more: Explainer: China’s tech ecosystems and the barriers between them
Details: Netease Cloud Music’s annual subscription, valued at RMB 179 ($26), will become a new membership perk for 88VIP users.
- 88VIP members will be able access Netease Cloud Music’s membership services beginning August 7 at no additional cost.
- Alibaba users with a Taoqi Value (a score calculated from a user’s purchase history and individual credit) greater than 1,000 can purchase 88VIP membership for a discounted price of RMB 88. Users who do not have a Taoqi Value greater than 1,000 pay a membership price of RMB 888.
- The company hopes that the difference between the two membership fees will prompt users to spend and engage more with the the ecosystem’s offerings in order to raise their loyalty score.
Context: Launched in 2018, 88VIP offers a variety of perks and privileges to members. The digital membership card offers access to all of Alibaba platforms’ loyalty benefits at once, including Tmall Supermarket, video streaming app Youku, food delivery Ele.me, music streaming service Xiami and ticketing service Taopiaopiao.
- Last September, Alibaba bought a minority stake in Netease Cloud Music with a $700 million co-investment alongside Yunfeng, the investment firm of Alibaba founder Jack Ma. Netease remains the controlling shareholder after the deal.
- After closing the investment, Netease Cloud Music began cooperating with other Alibaba-backed services such as Alipay and Youku. The music streaming app will work closely with Alibaba’s entertainment unit in film and and television distribution, as well as in entertainment ticketing, said a Netease representative cited in local media.
- Alibaba acquired Kaola, formerly a cross-border e-commerce unit under Netease, with $2 billion in September last year.