File Photo/NBD

On March 26th, 1688, Alibaba's B2B eccommerce platform officially announced its full integration with Taobao. Prior to this, it was noted that 1688 had recently opened three stores on Taobao—1688 Selected Taobao Store, 1688 Enterprise Self-Purchase Tmall Store, and 1688 Industrial Expert Selection Tmall Store.

According to Alibaba insiders, these 1688 Taobao stores will be consolidated into a channel similar to Tmall Supermarket, and Taobao will launch 1688 Select-branded factory-direct goods. Consequently, for Taobao buyers, goods with factory prices, free shipping and free returns will become the new norm.

Alibaba’s commitment and actions towards fully powering its core e-commerce business don’t stop there. On the evening of March 26th, Alibaba Group announced that to better strengthen synergy with Alibaba’s e-commerce business and to continue supporting the expansion of Cainiao’s global logistics network, it has decided to withdraw Cainiao’s IPO application.

In February this year, Joseph Tsai, Chairman of Alibaba Group’s Board, who announced during an earnings call that the company would gradually phase out its traditional retail operations. Now, it seems that both the withdrawal from offline business and the adjustment of Cainiao’s IPO pace are reflections of Alibaba’s further return to its core businesses—e-commerce and cloud computing.

Currently, Taobao has been on the frontline of price competition. Can Taobao survive this battle? 

NBD have learned that among the three stores, the “Select Store” currently has the best sales performance. This store has gathered resources of OEM factories for well-known brands such as Disney, Mercedes-Benz, and MUJI.

Zhuang Shuai, founder of Bailian Consulting, told NBD that in his view, 1688’s role as a supply chain platform entering Taobao further enriches Taobao’s supply of low-priced goods.

By opening stores on Taobao, 1688’s platform will directly supply Taobao users with factory-priced goods. Low price will be the biggest feature of these products.

Regarding the reasons for joining Taobao, 1688 insiders revealed that during user research, they found two rapidly growing demands on Taobao: one is the demand for brand alternatives and direct supply from major OEM factories, which is precisely the advantage of 1688 Select; the other is the significant demand for enterprise self-purchasing on Taobao, where users have high requirements for the richness, uniqueness, professionalism, and customization of the supply. Assembling goods for specific segments and special populations is exactly the strength of 1688’s industrial products.

In other words, as a B2B e-commerce platform, 1688 will further reach more consumers.