Alibaba Taoxiaopu To Grow Dropshipper Base

Alibaba Taoxiaopu To Grow Dropshipper Base  – Alibaba initially tested Taoxiaopu last April among a small group of users, and it was expanded to nearly a million users at the time of its official launch in early January. About half of those users reside in China’s lower-tier cities.

In theory, Taoxiaopu represents a promising way to counter the discount marketplace Pinduoduo (NASDAQ:PDD), which thrives on bulk sales of cheap products, across lower-tier cities.

Why Alibaba believes in dropshipping

Alibaba’s Tmall and Taobao platforms are the largest online marketplaces in China. However, Pinduoduo gained a firm foothold in lower-income cities over the past four years by encouraging shoppers to team up on bulk purchases via social networks like Tencent’s (OTC:TCEHY) WeChat.

By encouraging users to share product links with their friends, family members, and co-workers, Pinduoduo drove down the prices per unit for bulk orders. Pinduoduo also convinces big brands to sell their products at a loss on its platform, then subsidizes the difference out of its own pocket.

Those aggressive strategies enabled Pinduoduo to surpass JD.com (NASDAQ:JD) as the second largest e-commerce retailer in terms of active shoppers (but not revenue) last year. Its total number of active buyers rose 85% annually to 429.6 million last quarter, compared to JD’s 334.4 million annual active buyers.

RELATED: Dropship What Is Selling Not What You Want To Sell

Alibaba and JD both generate slower growth in top-tier cities like Beijing and Shanghai, so they’re expanding more aggressively into lower-tier cities to offset that slowdown. Alibaba launched a discount and flash sale platform called Juhuasuan last August, and JD launched a similar platform called Jingxi last September.

Taoxiaopu is clearly an extension of that push against Pinduoduo. If Alibaba converts more of its users in lower-tier cities into dropshippers, its marketplaces could sell more products via social networks and steal shoppers away from Pinduoduo

More for you

Related posts

Advertismentspot_img

Industry

Becoming An Entrepreneur At Age 19

Becoming An Entrepreneur At Age 19 - There’s no board-certified test for becoming an entrepreneur. You don’t have to go to a certain school...

Mo’s Bows Handcrafted Bowties Success Story

Mo's Bows Handcrafted Bowties Success Story: MEMPHIS, Tenn. (WREG) — A young entrepreneur who started his own company because he wanted to look and...

Keeping Up With The Joneses

Financial consultant Kassandra Dasent of Minding Your Money may seem like someone who has always had her finances together, but her early financial years...

Stay up to date with Entrepreneur news.

We would love to hear from you! Please fill in your details and we will stay in touch. It's that simple!