Friday, June 15, 2012

Alibaba’s Tmall cuts prices, expands product range


News this week: Chinese ecommerce giant, the Alibaba Group, unveiled a series of plans to diversify and boost sales on its B2C platform Tmall. In a bid to attract more customers, Alibaba aims to reduce the price of goods sold on Tmall by subsidising vendors to the tune of US$47 million.

The goods targeted will mainly be sold in the electronics category, where vendors can reportedly apply to Tmall for subsidies to reduce the price of goods sold or a rebate could be paid directly to consumers by Alibaba.

According to market research firm, Analysys International, Tmall holds a 37% share of China’s B2C e-commerce market during the first quarter of this year. 360Buy.com has 17%, while Suning Appliance, Tencent, and Amazon.com each have approximately 2%.

Separately, Alibaba will also further expand its business portfolio by entering the online book-selling market. Also on the Tmall platform, Alibaba will offer more than 1.3 million titles including reference books, novels, and business-related books. This offering will be in direct competition with established players in China such as 360Buy.com, Dangdang and Amazon China.

Rather than buying books from publishers and holding inventory, Tmall will reportedly introduce 50 publishers and 20 B2C book websites directly to consumers. Tmall plans to generate revenue through advertising and commission from sales.

This post is excerpted from BSG's weekly e-newsletter which is part of our subscription research service, BSG Tracker. Visit our website to find out more about this service. You can also follow us on Twitter for all the latest updates.

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