Technology

Alibaba Launches New VIP Membership Plan

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Alibaba [BABA:US] announced its all-in-one VIP membership program on August 8, as reported by SCMP on August 10. The membership covers Alibaba’s businesses including e-commerce platforms Taobao and Tmall, video website Youku, food delivery service Ele.me, music app Xiami Music and film tickers platform Taopiaopiao. A scoring mechanism called Taoqi Value will be introduced, which is calculated based on users’ purchasing records and individual credit. According to Alibaba, the membership scheme will offer discounts to its members to save up to RMB2000 per user.

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Although the program is named as "88VIP", only users with Taoqi Value higher than 1,000 points have the privilege to only pay RMB88 for the one-year membership, otherwise, RMB888 is needed. Similar to the Amazon’s prime membership which attracts users with discounts, free delivery and many other privileges, Alibaba hopes to maintain its customers and even gain larger market share by launching the program in increasingly fierce competition in the domestic retail market. Moreover, the separate pricing mechanism of membership helps to lock in its top and frequent buyers. As members can enjoy free delivery and red packets on Ele.me, the platform will also benefit from the new membership in its competition against Tencent-backed Meituan Dianping. 

Xinyue Shao
Research