- Alibaba is losing dominance in small-town China.
- New CEO Eddie Wu must address this by improving user experience and selection.
- Cheaper rivals have eroded the monopoly Alibaba once held even in its most loyal markets.
Alibaba, the Chinese e-commerce giant founded by Jack Ma, is losing its grip on small-town China – an area it once dominated.
In towns like Shaji, renamed streets like Ali Road and Jack Ma Boulevard signify Alibaba’s transformative impact as residents shifted from farms to online stores. But shop owners now split sales across rival platforms like Pinduoduo to stay competitive.
Why are sellers diversifying?
Alibaba’s market share has dropped from 68% in 2019 to an estimated 42% as shops diversify. Platforms like Pinduoduo are gaining ground by offering low prices that appeal to thriftier buyers.
Sellers feel Alibaba’s hands-off approach has let rivals build tighter relationships. Still, some plan to keep selling higher-priced goods on Alibaba.
Strategies for Alibaba’s New CEO
The changes underline problems facing new Alibaba CEO Eddie Wu as he tries to revive the critical Taobao and Tmall marketplaces. Alibaba built loyalty in small-town “Taobao villages,” but shoppers and sellers now go wherever they find value.
Experts say Alibaba must improve user experience and product selection to address this challenge. As China’s shoppers change behavior and new rivals keep emerging, Alibaba has lost the monopoly power it once enjoyed even in its most loyal heartlands.
