Tmall to subsidize users to boost sales

Chairman and chief executive of Alibaba Group Jack Ma speaks at a news conference in Beijing, in this January 19, 2011 file photograph. [Photo/Agencies]

Tmall.com, the biggest business-to-consumer website in China, will spend 40 million yuan ($6.3 million) for consumer promotion from June 15 to 18 to fend off competition from rivals that are also pouring out money to lure users.

The online shopping arm of e-commerce giant Alibaba Group Holding Ltd is going to subsidize users by giving "red pocket money" worth of 40 million yuan, which is four times the amount it spent in an earlier promotion on November 11.

Since May, Tmall has been paying subsidies worth 300 million yuan to its vendors and users on summer promotions of electronic products, ranging from iPhones to televisions.

More than 4 billion yuan worth of electronic products were sold on the website in May, compared with total sales of 8 billion yuan in the first quarter, the company said.

Tmall's intensifying efforts on promotion came after rivals, including home appliance seller Suning Appliance Co and Jingdong Mall, known as 360buy.com, have spent large sums on similar activities to attract users.

There were 194 million online shoppers in China by the end of last year, according to the China Internet Network Information Center. The amount they spent online, 782.6 billion yuan, accounted for 4.32 percent of total retail sales in the country last year.