Alibaba looks to go direct

Alibaba is reported to be set to launch a new app – Mao Xiang – which will introduce a new direct online retail model to sit alongside its existing Taobao and Tmall platforms.

How will it work

As reported by the South China Morning Post (citing anonymous sources in online media outlet LatePost), this would see Alibaba move into the sourcing, buying, storing and marketing of products in addition to simply facilitating their sale. 

Why it matters

It’s another step in Alibaba’s evolution as it continues to reshape its e-commerce business for a new era of weaker consumer spending on the Chinese mainland and growing competition.

Context

• Retail sales have slowed during the pandemic, to 3.9% in both 2020 and 2021.
• Competition in the e-commerce sector is intensifying as the likes of JD.com, Pinduoduo and Douyin challenge Alibaba’s leading position. 
• At the end of last year Alibaba restructured into two e-commerce business units – international digital commerce and China digital commerce – in order to better deal with new regulatory pressures.

Sourced from South China Morning Post