Chinese e-commerce giant Alibaba, which operates Taobao, one of the world’s biggest e-commerce websites, has quietly launched an app called Taobao Special Offers, which focuses on selling small and low-priced goods, Beijing News reported.
An insider said the special edition of Taobao was launched to compete with Pinduoduo, a fast-growing e-commerce platform focusing on low-priced, best-selling small products.
Previously, Taobao stuck with its strategy of “no buzz products,” in order to avoid homogenization of its product line. However, the launch of the new app indicates a new direction.
Insiders think it shows e-commerce platforms have begun a battle for customers in third and fourth-tier cities, as well as the middle-aged and elderly population, who are likely driven to the lower prices.
Founded in September 2015, Pinduoduo has adopted the strategy of “social+e-commerce.” Users can purchase goods at a lower price by inviting friends and family to order together.
The latter business model has been proven successful, as Pingduoduo’s weekly active users have now exceeded major e-commerce site JD.com in the third quarter of 2017.