Chinese tech giant Alibaba is launching a new online platform running a direct sales model, similar to rival JD’s, Chinese local media LatePost reported on Wednesday. The new platform, called Maoxiang (our translation), will first focus on consumer electronics.
Why it matters: Alibaba is trying out different models to boost business growth amid weakening consumer spending, intensifying competition, and tightening regulations.
Details: Alibaba plans to rebrand its business-to-consumer (B2C) marketplace Tmall app to Maoxiang, LatePost reported, citing unnamed sources. Alibaba’s B2C retail group led the project and launched it at the end of last year.
- Maoxiang will adopt a direct retail model. The online platform can sell branded merchandise directly to consumers, having more control over sourcing, quality, storage, delivery, and after-sales.
- For starters, the platform will focus on selling consumer electronics products, big-ticket items that JD also focused on during its early days.
- Alibaba is in discussions with several consumer electronics brands, including smartphone maker Realme, to join the platform.
- SF Express and Danniao Logistics are possible couriers for the service to ensure next-day doorstep delivery, the report added.
- Alibaba didn’t respond to TechNode’s inquiry when contacted on Thursday.
Context: Alibaba and JD, two of the largest e-commerce platforms in China, rose to prominence by adopting different business models. Alibaba operates under a “platform” model, where it derives revenues from online marketing services and commissions from third-party merchants selling on its marketplaces. Meanwhile, JD runs more like an online supermarket and earns mark-up by selling products it holds.
- JD expanded to adopt Alibaba’s “platform” model as early as 2017 by introducing retailers, small merchants, and individuals to its business.
- In January, Alibaba’s domestic e-commerce business launched a major organizational reshuffle to connect the back-end operations of the company’s two core e-commerce marketplaces Taobao and Tmall.