Alibaba strengthens local services by merging platforms
One area in which Chinese online retail giant Alibaba is considered to be weak is in local services, at least compared with its rival Meituan (owned by Tencent). Meituan’s quarterly food delivery business revenue is more than twice what Alibaba generates from quarterly revenues from local consumer services (around CNY6.8bn). This is what has prompted Alibaba to integrate its local service platforms, Koubei and Ele.me, with its group-buying platform, Juhuasuan. The move is intended to upgrade local services to Juhuasan by offering digitally enhanced services. The integration allows Koubei and Ele.me to use an additional sales channel (Juhuasan) to compete with their rival Meituan.
Koubei and Ele.me developed digital coupon capability this year, allowing local service providers to offer promotions including multibuy, “buy one get one free” and “50% off” for the first time.