(Yicai Global) April 4 -- Taobao, a major online retail platform of Alibaba Group Holding, has launched a specialized sales channel for goods priced up to CNY10 (USD1.40) to compete with JD.Com and Pinduoduo.

Some users can already see the channel and the cousin of Tmall is expected to widen access to all Taobao users by April 30, Yicai Global learned from the Hangzhou-based operator. The new channel aims to offer more goods with a great cost-performance ratio to adapt to consumers’ diversified demand, an insider close to Taobao said to Yicai Global.

The latest stage for competition among major Chinese e-commerce players is pricing. Items of the latest Taobao channel include small commodities and daily necessities which differ from goods offered on rival JD.Com's recent channel addition called 10 Billion Yuan which involves subsidies to reach low prices for computers, consumer electronics, home appliances, cosmetics, and other more expensive categories of consumer goods.

But slashing prices artificially cannot last forever. "In history, there is not any single company that has been able to change its situation via constant pricing-relevant subsidies,” Daniel Zhang, chief executive of Alibaba said during a recent teleconference. 

Last month, Trudy Dai, president of Alibaba’s domestic digital commerce business section, said that Alibaba's platforms, including Tmall and Taobao, will adjust their pricing and subsidy mechanisms to prioritize goods with a high cost-performance ratio.

Moreover, Taobao has allegedly lately been testing a tool to compare similar items with different prices and to offer competitiveness ratings and price suggestions to merchants, which may affect how much visibility certain products get on the platform. 

Editors: Shi Yi, Emmi Laine, Xiao Yi