Header image source: Alibaba Group.
Rumors had long circulated in the industry that Taobao Shangou would expand into local group buying. Now it’s official.
On September 20, reports confirmed that Taobao Shangou has launched an in-store group buying service. The initial rollout covers commercial districts in Shanghai, Shenzhen, and Jiaxing, with offerings ranging from tea drinks and desserts to restaurants, buffets, and local specialties. The deals are accessible through Taobao Shangou, Alipay, and Amap.
“This is a natural extension of the business. Since Shangou’s launch, both consumers and merchants have been asking for its discounts and services to apply to dine-in experiences,” a Taobao Shangou executive told 36Kr. “We’ve upgraded our products and services accordingly.”
For Alibaba, the move marks another step in its local services strategy, following Amap’s “Street Stars” initiative earlier this month.
According to 36Kr, the new group buying business is managed primarily by the Ele.me team, which oversees product development, supply, and operations while coordinating closely with Amap and Alipay. In the pilot cities, users can access the service via a prominent slot on Taobao Shangou’s homepage or through search. Additional entry points include Amap’s merchant pages and Alipay’s coupon section.
With three app gateways, the offering taps into Alibaba’s base of about one billion daily active users (DAUs).
Traffic alone, however, doesn’t guarantee success. Local commerce also depends on merchant participation and user-generated content, such as reviews and ratings, to build trust.
Many merchants in the first batch had already seen strong growth through Shangou’s food delivery service. Now they are offering discounted dine-in packages, supported by additional subsidies from the platform to increase appeal.
The current focus is dining, from tea shops and dessert cafes to full-service restaurants and regional specialties. Participants include national chains such as Kwei Mun Lung, Xinwang Hong Kong Cafe, and Qing Hua Jiao, along with local favorites like Louxia Yogurt, Fengxiaozhang Hotpot, and I Miss Niu.
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Prices highlight the competitive appeal. I Miss Niu’s seasonal hotpot set for two, normally RMB 170 (USD 23.8), is available for RMB 68 (USD 9.5). A signature grilled fish meal at Qing Hua Jiao, usually RMB 207 (USD 29), is offered at RMB 153 (USD 21.4).
Hints of this expansion had already emerged. During Alibaba’s second-quarter earnings call, the company noted that Taobao Shangou had about 150 million DAUs, many of whom were seeking services such as in-store pickup and group buying. Management indicated that, alongside home delivery, it was exploring new models in select cities to meet this demand.
Building on that signal, Alibaba’s local services business has advanced quickly in recent weeks, both on the content side and in transactions.
“Amap Street Stars,” launched earlier this month, reshaped discovery and rankings in the industry. Li Gang, who leads the project, told 36Kr the system acts as a credit-based evaluation framework designed for long-term use.
After four years of experimentation, Amap has established credibility as a channel for authentic discovery. At the launch, CEO Guo Ning said:
“We provide data derived from artificial intelligence-powered navigation, that is, real information about foot traffic. It’s essentially voting with your feet.”
On its first day, “Street Stars” reached 40 million DAUs, according to official figures. Li added that small eateries featured on the ranking saw traffic rise around 187%. While most content is still platform-generated, Amap is working to encourage more user contributions.
The group buying service adds the next layer: transactions. Online, merchants gain visibility through Taobao Shangou, Amap, and Alipay. Offline, participating restaurants display table stickers and posters that let diners scan codes or use the three apps to redeem deals and place orders.
In the past 100 days, Taobao Shangou has built a sizable base of active and paying users. Extending into group buying gives merchants a new way to capture that demand.
“Any extra income is still income,” one merchant in the pilot program told 36Kr.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Xiao Xi for 36Kr.