Douyin, ByteDance’s flagship short video app in mainland China that set up a dedicated e-commerce team in 2020, will not “simply pursue absolute low prices”, Wei Wenwen, the platform’s president of e-commerce, said in an internal meeting on Monday, according to a person briefed about the event.
Wei emphasised that it would “increase pricing power with more refinement” in order to “let users buy good items with good prices”.
A representative from Douyin’s e-commerce unit said the report was inaccurate.
Douyin has made adjustments to its product recommendation rules that prioritise pricing. Tweaks include no longer labelling products as “the cheapest online”, according to a report last week by Shanghai-based media Jiemian.
Besides buyers, the platform plans to grant more support to small and medium-sized merchants, especially those selling groceries that have recently become eligible for lower or no commission fees, according to the person.
Alibaba, which owns the South China Morning Post, has also been trying to move away from competing primarily on price.
The company’s Taobao & Tmall Group told merchants in a recent meeting that it would reduce how much low prices factor into an item’s exposure to consumers on the platform, according to the Jiemian report.
In order to keep quality merchants, Tmall, which focuses on established brands and sellers, said last week that it would waive its annual software service fee starting from September 1.
These fees used to range from 30,000 yuan (US$4,133) to 60,000 yuan, depending on a merchant’s category.
Taobao – Alibaba’s flagship e-commerce platform designed for small, independent sellers – said in a separate announcement that it was modifying its policies to give merchants with “good track records” more autonomy in handling refund requests from customers.
The easing away from a brutal price war marks a change in China’s e-commerce competition, which heated up in recent years because of aggressive strategies from budget-focused apps like Pinduoduo.
That platform made headlines last year when its parent company PDD Holdings, which also owns overseas shopping app Temu, briefly overtook Alibaba in market capitalisation.
The moves “would improve the overall e-commerce competitive environment in China” while proving that Pinduoduo has the capabilities to maintain low pricing as an advantage, according to a research note from Zheshang Securities published on Sunday.
