18 Oct 2021
Changing Shopping Habits Pose a Threat to E-commerce Giant Alibaba
The Index Today
Alibaba Group Holding Ltd. Is facing new challenges ahead of changing consumer trends and growing competition. The company has long been a major e-commerce platform founded by Jack Ma who used innovative techniques and tactics to beat competitors in the industry.
However, consumers in the e-commerce industry are moving past old habits and adapting to new ways of shopping which focus more on interaction. Alibaba is struggling to catch-up to new trends as competitors are fast-moving in to fill the new vacuum. The e-commerce giant’s share has fallen by 51% in the current year according to company projections.
Rivals such as Tencent Holdings LTD and TikTok are using innovative ways combined with gamelike elements to attract shoppers. TikTok has now started selling products through short videos and even live-streaming.
To counter such competitions, Alibaba is investing heavily in its current content creation strategies, focusing on live-streaming and lower prices. Chief Executive Zhang said in a statement, “When we used to talk about marketplace-based core, it was Taobao and Tmall. But now we’re working hard on building all these different businesses, each with its own unique and compelling value proposition.”
With stricter scrutiny and regulations imposed by the Chinese government on e-commerce companies and tech giants, Alibaba was accused of misusing its market monopoly earlier this year. The company was asked to pay a hefty fine of $2.8 billion.