(Yicai Global) March 24 -- Alibaba Group Holding is adjusting the pricing and subsidy mechanisms of its e-commerce platforms this year to compete with Pinduoduo and JD.Com.
Alibaba's platforms, including Tmall and Taobao, will modify their existing subsidiary mechanism while enriching content and functions to provide customers with goods of a high cost-performance ratio, The Paper reported yesterday, citing Trudy Dai, president of the Hangzhou-based firm's domestic e-commerce department.
Rival JD.Com recently revealed its CNY10 Billion (USD1.5 billion) of Subsidies channel after years of tightening competition with group-buying platform Pinduoduo that attracts customers with low prices.
Alibaba's shopping sites will modify the commercial mechanisms of the CNY10 Billion Subsidies channel and group-buying product Juhuasuan to improve the bidding system, per the report.
Tmall is not trying to break brands' reasonable pricing system via subsidies but wants to explore long-term development with brands, people who attended the meeting said. Referring to a shared strategy with brands, Dai coined the term "long-termism" and mentioned it several times during the meeting.
Moreover, the focus this year will be on leveraging content such as live streaming and short videos on Taobao to stimulate growth, Dai said.
Some moves can already be seen as Taobao changed its rules on March 22 to scrap platform-set price floors and allow brands to drop their prices even lower for their followers.
Editors: Shi Yi, Emmi Laine, Xiao Yi