As E-commerce Slows Down, China's Alibaba Rolls Out A Mobile Local App

Alibaba, the parent company of the enormously popular Taobao (the Chinese equivalent of eBay), underwent a major restructuring this January. Alibaba has also revealed its plans for growth in the future. Specifically, moving forward, the company hopes to replicate its success with Taobao in the mobile lifestyle sector.

This June, Alibaba (PINK:ALBIY) plans to roll out a “revolutionary, industry-changing local lifestyle product”, Alibaba Vice President, Director of Development and of local lifestyle Zhang Jianfeng said.

This new product will be a mobile app distinctive from Alibaba’s existing apps such as Ddmaps (a local coupon finder) and Taobao Life (a local business and entertainment finder), said Zhang. This product will not include a social networking element, which sets it apart from Alibaba’s social networking apps, such as Hupan, Laiwang, and Momo. Alibaba has high expectations for the product. Its short-term goal is for the new app to achieve a 10 percent penetration rate, which, with Taobao’s 80 million daily users, could mean a daily usage of 8 million for the app, and to be installed on 5 million mobile devices. “These goals are not necessarily to be achieved this year,” Zhang said.

The app is described as a product that connects leisure living and purchasing with independent merchants. It “does not feature coupons, or low price wholesales. Without the element of marketing, the transaction can be allowed to revert back to service, its very essence,” Zhang said.

According to industry experts, the revolutionary product Zhang speaks of should be akin to “Gou Bian Li”, a product that Alibaba is testing quietly in Beijing and Hangzhou (where the company is based). Alibaba will partner closely with local merchants, and provide a platform for selling and buying localized fast-moving consumer goods. Alibaba has already built a variety of mobile applications. This new app will only be one of its contenders in the mobile application competitive landscape. It must, however, become a fast-growing contender, because on the one hand, Meituan (a Groupon-like deal of the day site) has already established a place for itself, and has declared that it hopes to become the Taobao for local lifestyle, and to achieve a revenue of 100 billion yuan ($16 billion) in the next three years. In addition, Dalian Wanda Group, a holding company that controls travel, restaurants, cinemas and other entertainment businesses, also hopes to grab a slice of the pie in local lifestyle. As e-commerce growth slows down in the future, Alibaba by necessity must turn to other industries, and local lifestyle is a sector sure to be contested over.

The original story appeared in IBTimes China.