Alibaba to further rival with a new self-operated e-commerce platform

Alibaba, one of China’s tech giants, is to renovate its current business-to-consumer (B2C) platform Tmall into a self-operated e-commerce platform with a rebranded name Mao Xiang, according to the Chinese media outlet LatePost on 16 February. The update is believed to be introduced soon to Tmall’s mobile app users with reputable brands of the 3C (computer, communication, and consumer electronics) category, being the focus of the initial launch phase.

Although there might be an overlap of products between Mao Xiang and brands’ flagship stores on Tmall, the two platforms have a different supply of goods and operating models. While products sold at Tmall’s storefronts belong to brands and are delivered directly by brands, those sold at Mao Xiang’s directly managed stores belong to and are dispatched by the e-commerce platform, therefore, delivered sales will also go to Mao Xiang.

By doing this, Alibaba can shift more of its focus on product sales and allow the group to leverage the platform’s user base to generate more shares from record-breaking online sales, in particular during annual online shopping extravaganzas such as Double 11. This is instead of relying heavily on charging brands service fees, therefore, potentially bringing out more revenue.

The Mao Xiang project started up around the end of 2021 and has been under the oversight of Zhao Kun, director of Future Clients for Customers at Alibaba, a department emerging from the integration of Kaola (a cross-border membership e-commerce platform under Alibaba) and Tmall’s mobile unit. This demonstrates swift efforts by Alibaba in beefing up its building of a self-managed platform in order to get more market share of China’s thriving e-commerce industry.

Prior to this move, Alibaba had already shown its ambition in this new business model, with the launch of Tmall Supermarket (an online grocery shopping service) and alike, Hema Fresh. “Apart from Taobao, Alibaba has already built up another self-managed online business ecosystem that is equivalent in size of the former,” said an insider of Alibaba’s B2C department, “In fact, Alibaba is replicating a (another China’s e-commerce giant that is leading self-operated platform).”

In terms of the rationale for targeting 3C categories, the insider attributed this to higher market concentration in those industries as well as a high unit price of those products, which would allow the platform to develop a deeper relationship with brand suppliers. It is understood that several big domestic smartphone makers have been in negotiation with the platform about entering the new online retail space.

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