Online Shopping Websites Tmall and Dangdang Opt for Coopetition

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Online Shopping Websites Tmall and Dangdang Opt for Coopetition

Following last summer’s cash-sapping and counterproductive price war among China’s major online shopping portals, a couple of the combatants have decided to work together.



Following last summer’s cash-sapping and counterproductive price war among China’s major online shopping portals, a couple of the combatants are opting for cooperation over cutthroat competition.

Dangdang, the country’s sixth-largest B2C site, has opened two flagship storesthat will eventually offer800,000 types of books and more than 300,000 types of housewares on Tmall, operator of China’s largest shopping platform.

After six months of talks with Tmall, DangDang officials concluded it was cost-efficient to set up shop on what is essentially a competing website. According to a translation of a statement issued by Dangdang in Chinese, independent vertical B2C websites like Dangdang face increasing costs as they try to acquire new customers and gain market share by “burning cash to drive traffic.”

Tmall, an online marketplace that is open to other e-tailers who pay fees to operate storefronts on the site, commands about 42 percent of the B2C market—making it a relatively efficient way to expose Dangdang to a large number of potential shoppers, the company said.

Relations between Dangdang and Alibaba Group, Tmall’s parent, have been warming for months. In May, DangDang allowed Alibaba’s eTao shopping search engine to index its website, unlike some rival B2C sites that block eTao “spiders.” Dangdang also signed up for eTao’s One Account System, which allows consumers to log onto DangDang via their Alipay accounts. Alipay, an affiliate of Alibaba, is China’s largest online-payments provider.

Tmall last year opened up its marketplace to other B2C sites, initially attracting 38 operators including department store Yihaodian and Vancl, China’s biggest online apparel retailer. The addition of Dangdang brings the total number of partners to 87.

Tmall spokeswoman Florence Shih said the Dangdang deal “underscores the importance of collaboration in the e-commerce ecosystem and demonstrates the win-win presented by the open platform infrastructure provided by Tmall.com.”

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