Taobao announced to open up its social shopping platform, UZ, to everyone. UZ used to be only available for third-party social shopping services. Now anyone can set up and run a mini-site there. At the same time Alibaba, Taobao’s parent company, announced to input $500 million to help build UZ ecosystem.
Social shopping sites emerged in China in the past couple of years. Meilishuo and Mogujie stood out as the two most well-known players. The majority of their revenues were from Taobao where most Chinese online retailers are doing business, with a minor part from in-site advertising.
It is reported that Alibaba wasn’t happy with large third-party social shopping services, such as Meilishuo and Mogujie, took advantage of Taobao ecosystem, receiving CPS/CPC-based commissions from Taobao retailers. Alibaba would prefer to see more smaller players in the ecosystem.
Juhuasuan is a similar platform within Taobao that aggregates group-buying services. Such platforms could have users stay forever within Tabao ecosystem and buy goods only from Taobao retailers. The competition within the ecosystem will bring Taobao revenues through display advertising or paid searches.