Taobao Deals sources fresh produce directly from farms. Photo credit: Alibaba Group

Alibaba Group’s marketplace Taobao Deals launched a 10-Yuan Store this week for China’s bargain hunters seeking daily necessities.

Goods are priced below RMB10 ($1.57) each at the digital stores, which are similar in concept to dollar stores in the U.S. or pound shops in the U.K.

Taobao Deals also unveiled 100 Store, a marketplace for higher-value products, ranging from cosmetics, fashion accessories to kitchen utensils and toys, but still at a more affordable price point than many name brands.

The launches are part of Taobao Deals’ efforts to appeal to a variety of shoppers in China’s lower-tier cities in China while streamlining supply chains. In both of the new store concepts, the platform is directly involved in sourcing, quality control, storage and delivery.

Established in 2020, Taobao Deals had 280 million annual active users in the 12-months ended Dec. 31 last year. Paid orders on the platform grew over 100% year-on-year in the third quarter, according to the group’s latest earnings report.

“We’ve already reached many consumers in lower-tier cities…our mission is to serve consumers’ needs and create value for consumers,” said Wang Hai, president of Taobao Deals, at an online event held on Wednesday.

The platform has three product categories: fresh produce sourced directly from farms, daily essentials and household items direct from factories, and trendy apparel direct from brands. 

Powerful Partnerships

Taobao Deal’s unique production model is best seen in an ultraviolet toothbrush head sanitizer now available on the 100 Store. 

As sales of electric toothbrushes surged in lower-tier cities in China, the operation team at Taobao Deals reached out to a manufacturer. It partnered to design a sanitizer that uses ultraviolet to sterilize the toothbrush.

These devices tap the consumption upgrade wave washing across lower-tier cities and rural areas, which masses of merchants are surfing with the help of bargains app Taobao Deals.

Most of the sellers that co-design products with Taobao Deals are top suppliers from Alibaba’s B2B purchasing and wholesale marketplace 1688.com. They hand over all the sales, marketing, storage and delivery work, cutting operational costs and thus passing this discount on to customers.

“We pooled our strength to create products that cater to consumers’ needs…while manufacturers are good at production, we have consumer insight and a strong fulfillment network,” said Wang. 

More than 500,000 factories and two million merchants from China’s major manufacturing bases are collaborating with Taobao Deals as of December 2021.