alibaba’s taobao deals pivots from chasing user growth: report

Alibaba’s budget shopping app Taobao Deals has adjusted its key business metric twice in less than six months, Chinese media outlet LatePost reported on Tuesday. In April, the app elevated gross merchandise value (GMV) as its most important metric and pivoted away from focusing on user growth after reaching 300 million annual buyers. Two months later, it changed again to focus more on the monthly active users (MAU) instead.

Why it matters: Taobao Deals is facing a challenging situation as it competes for growth.The platform reached over 300 million users this year. But with Alibaba Group unlikely to commit the same scale of resources to the growth of the platform as it has in the past, the standalone app will need to find new ways to expand its market share and achieve profitability amid pressure from strong competitors, such as Pinduoduo.

  • Taobao Deals uses the consumer-to-manufacturer (C2M) business model that connects manufacturers directly with customers to help lower costs, the same business model that fuelled the rise of Pinduoduo. Soft-launched in 2018, Taobao Deals is Alibaba’s effort to reach users in less affluent regions and compete with the growing reach of Pinduoduo. 

Details: The significant shift in the key metric means Taobao Deals focuses more on increasing user retention and activity than user growth. LatePost reported that the department responsible for user growth has also been reduced.

  • Daniel Zhang, CEO of Alibaba, said in the first quarter earnings call that the huge quarterly investment (in the tens of billions of yuan) in Taobao Deals has brought Alibaba about 60 million new users in the past year.
  • More than 70% of the app’s external budget has been spent on new user growth in the past two years. However, the proportion dropped by around 30% to 40% this year, seriously slowing user growth.
  • Taobao Deals’ single-quarter new user growth shrunk during the January to March period, from the previous 30 million to 40 million range to just over  20 million. The company has yet to disclose its user figures publicly for the second natural quarter.

Context: In less than two years, Taobao Deals has achieved annual growth of more than 200 million active buyers — an impressive result for a mature company like Alibaba. All of the other Alibaba’s e-commerce sites have been seeing annual active consumer (AAC) growth of less than 20 million every quarter since the first quarter of 2019.

  • Taobao Deals occupies only a fraction of the market share compared to the dominant incumbent Pinduoduo. Pinduoduo’s annual active buyers reached 900 million in the second quarter this year, nearly three times the growth of Taobao Deals.
  • There is a 70% to 80% overlap between the user base of Taobao Deals and Pinduoduo, and with Alibaba simultaneously trying to reduce costs and increase efficiency, Taobao Deals can face more difficulties in trying to increase its market share.

$

Your contribution is appreciated.

Paying the transaction fee is not required, but it directs more money in support of our mission.

Keyword: Alibaba’s Taobao Deals pivots from chasing user growth: report

TECH'S NEWS RELATED

Elon Musk, Twitter may reach deal to end court battle as early as Wednesday: report

Elon Musk and Twitter Inc may reach an agreement to end their litigation as soon as Wednesday and clear the way for the world’s richest person to close his $44 billion deal for the social media platform, a source familiar with the litigation told Reuters.Musk, who is also chief executive ...

View more: Elon Musk, Twitter may reach deal to end court battle as early as Wednesday: report

8 new releases hit Netflix today – here’s what you should watch

New Netflix releases (October 5) Debuting on Netflix today An adaptation of a Stephen King story. A reality game show, a documentary about the Thai cave survivors, and a glam- and glitz-filled reality series about Asian and Asian-American friends living the high life in Los Angeles. For those of ...

View more: 8 new releases hit Netflix today – here’s what you should watch

Catch-and-release fishing may cause temperature spikes in sharks

Lucy Harding and Dr Nick Payne work with their collaborators from Beneath the Waves to tag a 3 m tiger shark in the Bahamas in May 2019. Credit: Diego Camejo. New research from marine scientists raises potential red flags for sharks that are caught and released by recreational anglers. ...

View more: Catch-and-release fishing may cause temperature spikes in sharks

Rybalsky Consulting Delivers Actionable Solutions to Data Overload

(Photo : Rybalsky Consulting) With over 20 years of experience in consumer packaged goods, Rybalsky Consulting has helped many organizations – from tech startups to some of the world’s largest companies – make sense of big data with leading research and analytics initiatives. Now, with her consulting firm, Rybalsky ...

View more: Rybalsky Consulting Delivers Actionable Solutions to Data Overload

Michael Kureth Revolutionizing the Film World with Cinedapt, The Patented Solution To Piracy

(Photo : Michael Kureth) The definition of “Piracy” has changed over time. The term originally applied to attacks by ship-borne looters who stole items against other ships and coastal locations. The phrase now has a new meaning in the context of the film industry in the twenty-first century. The ...

View more: Michael Kureth Revolutionizing the Film World with Cinedapt, The Patented Solution To Piracy

North Korea’s Lazarus group uses vulnerable Dell driver to blind security solutions

This first known exploit of the Dell vulnerability might inspire other malware developers who want to avoid detection of their code.

View more: North Korea’s Lazarus group uses vulnerable Dell driver to blind security solutions

Cisco tightens SD-WAN integration with Microsoft Azure

Cisco SD-WAN customers can use Microsoft’s Azure Virtual WAN and its multi-region fabric for worldwide, regional connectivity

View more: Cisco tightens SD-WAN integration with Microsoft Azure

Hacker in Massive Capitol One Data Breach Gets Probation

The judge cites the hacker's mental health and transgender status in declining to sentence her to prison.

View more: Hacker in Massive Capitol One Data Breach Gets Probation

Alec Baldwin reaches settlement with family over 'Rust' death

Watching Meta under Zuckerberg feels like reliving my days in the flailing newspaper business

How to fix the Instagram crashing bug on iPhone and iPad

New research identifies lack of appropriate control tools for many major infectious diseases of animals

Do I need to refrigerate pumpkin pie? Food safety info for pumpkin season

Logging down the value chain raises future forest sustainability concerns

Watch NASA send a payload hurting into space with a giant slingshot

Popular censorship circumvention tools face fresh blockade by China

FBI: Cyberattacks targeting election systems unlikely to affect results

Everything to know about The White Lotus Season 2 on HBO coming this month

NASA study finds climate extremes affect landslides in surprising ways

Fixed-duration strikes can revitalize labor

OTHER TECH NEWS

;