Taobao cuts merchants fees and boosts subsidies as it seeks to guard market lead

Taobao, the main e-commerce platform of Alibaba Group Holding, has decided to increase subsidies and cut fees for merchants as China’s largest online marketplace moves to defend its lead amid growing competition, according to local media reports.

The moves came as Alibaba refocused resources on core operations to fend off rivals including PDD Holdings, Kuaishou Technology and ByteDance-owned Douyin, the Chinese version of TikTok. Douyin launched a stand-alone shopping app, Douyin Mall, for Android users in China this week.

Taobao would provide 10 billion yuan (HK$10.8 billion) of cash to subsidise content creation, such as live streaming and short videos, on the platform this year, Cheng Daofang, general manager of Taobao and Tmall Group’s e-commerce content unit, said at an event yesterday.

Separately, Taobao announced on Wednesday it would launch a number of merchant-friendly initiatives from next month, including waiving the fee for a support service called “business adviser”.

Alibaba vowed in February it would increase its focus on two core businesses – e-commerce and cloud computing – in the wake of a sweeping restructuring announced a year ago. Alibaba owns the Post.

In addition, Taobao will cancel fees for an artificial intelligence (AI) customer service chatbot for merchants with fewer than 2,000 customers a day and a photo storage service with a capacity of up to 30 gigabytes.

“Business adviser”, launched in 2011, was initially a data tool for Alibaba’s business-to-business platforms. It started to be applied to Taobao in 2013 and became an essential tool for Taobao merchants to operate online stores.

The fee waivers have now been expanded across all functions of the tool, including a “market insight” function that provides data support for merchants to improve operational efficiency.

Alibaba has been integrating the services of its 1688 online wholesale marketplace with Taobao, starting with three online stores under the 1688 name, as it continues to consolidate assets and gain new users.

Growth in Alibaba’s core businesses has slowed in recent quarters. It posted lower-than-expected earnings in the December quarter, as Taobao and Tmall Group saw revenue grow by 2 per cent year on year, slower than the 5 per cent for the whole Alibaba group.