Alibaba's Taobao Live Revamps Strategy: New Hosts to Spark E-Commerce Innovation

Benzinga ·  Feb 21 21:40

Alibaba Group Holding Limited's (NYSE:BABA) Taobao has launched a live commerce company under Taobao Live to diversify its host base beyond well-known figures like Austin Li Jiaqi and to combat competition from other online retailers.

This initiative targets new hosts, offering comprehensive services, including business connections, marketing, inventory, and financial management.

After a six-month development period, during which hosts receive support such as guaranteed income or profit sharing, they can establish their teams. This strategy aims not for immediate profit but to nurture a robust live commerce ecosystem, Nikkei Asia reports.

Live commerce, a format where hosts sell products engagingly, has emerged as a growth area in e-commerce, especially as traditional retail faces challenges. It gained particular prominence during events like the Singles' Day festival, where live commerce platforms experienced a significant increase in gross merchandise value (GMV), contrasting with a slight decline in traditional e-commerce platforms.

Taobao, an early adopter of live commerce, has faced challenges due to its dependency on a few top influencers, its legal troubles, and competition from platforms like Douyin, which has seen explosive GMV growth.

Taobao Live's new company is part of Alibaba's broader strategy to revitalize its live commerce offering and maintain its competitive edge. This includes adapting to the evolving market dynamics by broadening the pool of live hosts and enhancing their support and services, thereby ensuring a dynamic and sustainable live commerce platform.

Meanwhile, Alibaba is also focusing on its overseas business, with its international e-commerce business unit, comprising AliExpress, Lazada, Daraz, and Trendyol, reporting a 44% revenue increase to $4 billion in the December quarter versus the modest year-over-year growth in its core e-commerce businesses, Taobao and Tmall Group.

CEO Eddie Wu flagged plans to invest in better user experiences, develop public cloud products, and maintain growth in international commerce.

Alibaba stock lost 23.1% last year. Rival JD.Com Inc (NASDAQ:JD) lost 51%.

Price Action: BABA shares traded  higher by 1.64% at $74.35 premarket on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Alibaba Photo by zhu difeng on Shutterstock

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