Taobao Launches ‘Foodie’ Service to Compete with Pinduoduo in Low-Tier Chinese Cities
COVID-19 and China
300 M Taobao users are senior foodies. Photo: Credit to Unsplash

On April 17th, 2019, Taobao (淘宝) released a new brand “Taobao Foodie” (淘宝吃货) in Hangzhou, integrating the Taobao food categories of fruit, fresh grocery, and snacks to one sector. The "Taobao Foodie" channel was also officially launched on Shoutao (手淘)the same day.

In the "2019 Taobao Food Live Trend Report" jointly released by Taobao Foodie and Taobang, there were more than 1.6 billion people entering the live food eating show in 2018, and the food sold during the live show increased by 400% compared with 2017. In the Taobao food live show, fresh fruits, dietary supplements, pastry snacks, dried meat clams, seafood, convenient instant food, biscuit puffing, candied dried fruit, nuts roasted seeds and nuts, and bird's nest become the hottest top ten food category in the live broadcast show.

Liu Bo (刘博), general manager of Alibaba Group's platform sales business unit, also said that by the end of 2018, Taobao’s monthly active users (MAU) reached nearly 700 million, with almost every user purchased food on the platform. 300 million of which are senior foodies. In the future, Alibaba will pull all strength in Ali’s ecology to devote to this area, so that every Chinese person will become a senior foodie.

Senior foodie, are essentially senior consumers who are affordable to delicate food and enjoy a healthy lifestyle in the trend of consumption upgrading. In order to provide consumers with delicious and affordable food, Taobao plans to strengthen supply side upgrading, and focus on the direct supply mode. By reducing the circulation cost of suppliers and merchants, consumers will benefit the most from it and can enjoy the quality of the food at a reasonable cost. The supply end upgrading is as follow: 150 city food maps were released this year on Taobao, and strategic partnerships with 500 food industry bands around the world helped more than 500 global food brands achieve trillions of sales in three years.

The series movement of Taobao is undoubtedly a competition with Pinduoduo.

According to Alibaba's financial report in 2018, it shows that Taobao mobile end attracted an addition of 120 million monthly active users. 80% of the new active users came from third-tier and fourth-tier cities and villages during the three months from July to September in 2018. The lower tie cities users are the target customers of Pinduoduo.

According to data provided by QuestMobile in 2018, Pinduoduo owns the largest users base in third-tier and fourth-tier cities.

More importantly, food as a product category is the key to the rise of Pinduoduo. From the perspective of business competition, in order to gain more advantage in the third and fourth tier cities, Taobao had to joy in this fight with Pinduoduo.

"The fight for foodie"  is not only to meet the low tier cities needs but also covering the entire population.  The third-tier and fourth-tier cities are experiencing rapid growth while the first and second-tier cities have a higher purchase frequency. Taobao and Pinduoduo must use branding, deep operation, participate in the supply chain and provide users with a richer and more comprehensive way of consumption.

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