(Yicai) April 1 -- Over 2.3 million viewers watched the first-ever livestreaming event hosted by Alibaba Cloud, the cloud business arm of Chinese e-commerce giant Alibaba Group Holding.

Well-known Chinese influencer Luo Yonghao hosted Alibaba Cloud’s first livestream on its affiliate e-commerce site Taobao yesterday, offering packages and discounts on products such as Alibaba Cloud Drive for Enterprises, Alibaba Cloud Elastic Compute Service, and Object Storage Service.

About 1,000 companies placed orders during the livestream, with some of them contacting the firm during the event to inquire about the products, 36Kr reported.

Joining hands with Luo will help popularize the value of cloud computing to more people while allowing more companies to familiarize themselves with advanced public cloud services, Alibaba Cloud said.

Hosting livestreaming events to sell cloud products at low prices shows the fierce competition in the Chinese cloud service industry, according to an analyst.

Last year, Alibaba Clout lowered its prices, initiating a chain reaction. Immediately afterward, Tencent cut its prices by 40 percent, China Telecom’s state Cloud slashed prices by 90 percent, and JD Cloud began offering the “lowest online prices.”

Alibaba Cloud announced a 20 percent price reduction on all products about a month ago, but Tencent Cloud did not follow.

Alibaba Cloud’s price cuts are not for short-term market competition, but they are a long-term strategic choice, Senior Vice President Liu Weiguang said. Cloud computing is an economy of scale, meaning that more customers lead to lower amortized procurement, research, and development costs, resulting in cheaper product prices.

Major cloud service providers’ strategy to achieve a larger market share is to offer cheap computing, storage, and network products at the expense of their profitability, Huatai Securities said in a recent research report.

Editor: Futura Costaglione