Chinese e-commerce giant Alibaba Group Holding is now baking on its planned deals and bargains, which are targeting lower-tier cities.
The tech company has revealed plans of a shift from offering high-end global brands such as Louis Vuitton and Burberry to good quality budget items through its online store Juhuasuan, also known as Taobao Ju Hua Suan.
The shift in priority to the more budget-friendly platform comes as China experiences flattened economy growth and added competition in the online retail space.
The company's goal is to make the group-buying and flash-sale online retail platform into the top destination for Chinese consumers in smaller cities and towns across the country.
As part of its renewed efforts to pump its Juhuasuan platform, Alibaba announced that it would be holding a Super Bargain Day sales starting on September 1. The company revealed that it will be cutting as much as 50 percent off on over 1 million products on top of giving away coupons, cash dividends, and other perks to customers. The sale will mainly be implemented on low-cost items that are popular with budget-conscious consumers.
According to Juhuasuan's general manager, Liu Bo, the company has seen a massive amount of growth in lower-tier cities through the platform. Liu explained that the site has the potential to fuel further growth in every industry given its wide reach and affordability.
Alibaba has recognized this potential, which is by it has shifted its strategy to penetrate more into lower-tier markets. In its latest quarter ending in June, Alibaba reported a 70 percent increase in its annual active users, mostly coming from less developed areas around China.
To further improve its service, Alibaba has announced a slew of new strategies to further increase traffic to the website. Aside from implementing simpler interfaces that are easy to use even for first-time users, Alibaba will be implementing measures to aid manufacturers to enhance their facilities using consumer analytics and internet technologies.
Through this method, Juhuasuan is aiming to help foster as many as 100,000 brands encompassing more than a million items and as much as 10,000 manufacturing facilities.
Juhuasuan is also planning to build new supply centers in lower-tier cities aimed at connecting farmers and manufacturers with e-commerce merchants.
Part of its plan to increase active users on its platform, Alibaba has pledged to make substantial investments into its social media platforms. This will include having product launches, recommendations, and promotions on services such as Weibo, Kuaishou, and Douyin.
