Alibaba’s Taobao, ByteDance’s Douyin seek e-commerce price war detente with new policies

Douyin says it will be more ‘refined’ in pricing; Taobao changes controversial refund policy amid fierce price war that has hit earnings

Reading Time:2 minutes

ByteDance’s Douyin and Alibaba’s Taobao and Tmall are shifting away from their emphasis on low prices as they search for a way out of the ongoing e-commerce price war in China. Photo: Shutterstock

Published: 9:00pm, 30 Jul 2024Updated: 11:07pm, 30 Jul 2024

Two of China’s leading e-commerce platform operators, Alibaba Group Holding and TikTok owner ByteDance, have started to adjust their focus on low pricing with policy shifts that favour merchants, as they seek a more sustainable online shopping ecosystem.

Douyin, ByteDance’s flagship short video app in mainland China that set up a dedicated e-commerce team in 2020, will not “simply pursue absolute low prices”, Wei Wenwen, the platform’s president of e-commerce, said in an internal meeting on Monday, according to a person briefed about the event.

Wei emphasised that it would “increase pricing power with more refinement” in order to “let users buy good items with good prices”.

The comment followed a report last week from Chinese tech news site 36kr that Douyin missed its target gross merchandise value in the first half of the year, partly due to an intense price war in the online retail industry that dragged down overall sales.

A representative from Douyin’s e-commerce unit said the report was inaccurate.

Douyin has made adjustments to its product recommendation rules that prioritise pricing. Tweaks include no longer labelling products as “the cheapest online”, according to a report last week by Shanghai-based media Jiemian.

Besides buyers, the platform plans to grant more support to small and medium-sized merchants, especially those selling groceries that have recently become eligible for lower or no commission fees, according to the person.