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Alibaba set to upgrade Tmall

By He Wei in Shanghai | China Daily | Updated: 2019-06-26 10:58
Pedestrians walk past a Tmall mascot at a shopping center in Beijing. [Photo provided to China Daily]

Firm to offer daily deals, prioritize membership integration, revamp virtual store front

Alibaba Group Holding Ltd announced on Tuesday major upgrades to its Tmall online shopping site as the e-commerce giant tried to guard its retail supremacy against rivals such as archrival Tencent Holdings Ltd.

The country's top business-to-customer site will kick off revamps that will prioritize membership integration across online and offline channels, customize its virtual store front, have daily deals featuring cost-effective offers, and a function to allow the quick setup of online shops by individuals and merchants, company executives told a news conference in Hangzhou.

Dubbed Tmall Flagship Store 2.0, the plan is expected to "enhance productivity for brands and merchants", with a goal of pushing more brands to cross the 100 million yuan ($14.5 million) sales threshold during major promotional online sales, said Jiang Fan, president of Tmall and its sister platform Taobao.

"The guiding principle of the upgrade is to enable merchants to move their business operations from merchandise-centric to consumer-centric," he said, adding the new functionalities are set to become available to merchants ahead of this year's Nov 11 shopping gala, the bellwether event for China's consumer spending.

One central plank of the upgrade includes enlisting flash sale and group-buying arm Juhuasuan as one of the three marketing pillars for brands. Unlike the Tmall Super Brand Day and the Little Black Box featuring product debuts and exclusive designs, Juhuasuan offers generous discounts and links factories with customers by circumventing middlemen and lowering costs.

The platform's significance was highlighted during the June 18 promotion, another major event on China's e-commerce calendar. Vendors on Juhuasuan's "Daily Deal "channel received more than 420 million orders during the fair, which includes everything from electric toothbrushes and headphones to tissue paper and laundry detergent.

"We are pleased to see that our strategy to help brands penetrate the less-developed markets has paid off. Customers in emerging cities are receptive to innovative products and promotion campaigns such as programs on the Juhuasuan platform, "Jiang told the event.

The number of customers and the gross merchandise volume from third-to fifth-tier cities both posted 100 percent growth, the official said.

Alibaba said in its recent earnings report that more than 70 percent of its 102 million newly acquired annual active users in fiscal 2019 came from smaller cities.

The upgrades represent a clear move to corner the market for lower-tier city dwellers, whose growing discretionary spending has not yet been unlocked.

But Tmall's dominance is under siege by the likes of JD and Pinduoduo, both of which are backed by Tencent, said Cao Lei, director of the China E-commerce Research Center.

"With over 400 million users, Pinduoduo, a social commerce shopping app known for bargain deals, is shaping up to join the league of Alibaba and JD to form the trinity of China's e-commerce landscape. Established players must have felt the pinch of such competition and found it imperative to take countermeasures," he said.

Other initiatives on the upgrades are designed to fend off the encroachment of rivals.

Tmall would encourage the redirection of offline purchases to online membership through incentives like discount coupons and free sampling. The move is a response to Tencent's smart retail solutions built around WeChat for customer relations management and advertising for brick-and-mortar shops.

Tmall will also open up technical capabilities like real-time insights and data analytics for brands to tailor their storefronts, ensuring they get maximum exposure by displaying items to users who are likely to buy, said Qi Junsheng, general manager of Alibaba's commercial platform business unit.

A forthcoming function called "Light Store" will allow individuals, brands and merchants to have a fast-track display of select items with a simplified entry threshold and complements it with an inventory of both physical shops and flagship virtual stores.

China's relatively high penetration rate of e-commerce is propelling even the biggest online platforms to come up with new ideas to attract new customers, stimulate spending and spur growth, said Yu De, founder of Diggg, a domestic consultancy specializing in new retail studies.

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