(Yicai) Feb. 23 -- ByteDance's Douyin is taking on Pinduoduo, Kuaishou, and Taobao with a new strategy of low-priced goods in the short-video platform's e-commerce business, according to a company insider.

The Chinese version of TikTok has set increasing the price competitiveness of its e-commerce business as its top priority this year, Beijing Business Today reported recently, citing an insider. This is the first time it has done so, Yicai learned.

As a super application with over 700 million daily active users, Douyin has gradually hit the ceiling in the growth rate of gross merchandise volume and the number of users, Cao Lei, e-commerce research director of digital economy website 100EC, told Yicai.

Other e-commerce platforms of Alibaba Group Holding and JD.Com are developing their own short-video and livestreaming businesses to snatch market share from Douyin, so Douyin has no choice but to keep transforming, he added.

Pinduoduo is the leader in China’s e-commerce market for low-priced goods. The firm's market capitalization in the United States overtook that of Alibaba for the first time after the bulk-buy platform released its earnings for the third quarter of last year. Pinduoduo earned CNY29.2 billion (USD4.1 billion) from transaction services in the third quarter, more than quadrupling from a year ago, much faster than the industry average.

Industry insiders predict that the rush of new players will have no big impact on Pinduoduo in the short term because building supply chains and user influence will take a long time but in the long run, Pinduoduo’s competitive edge might weaken.

One after another, competitors have turned toward price-sensitive consumers. Cheng Yixiao, founder and chief executive of Kuaishou, put forward the "cheap and fine" strategy last year to encourage merchants on the short-video platform to offer affordable goods.

Alibaba's Taobao also joined the bandwagon after hesitation last year. A year ago, Daniel Zhang, the CEO of Alibaba at the time, was still of the opinion that "no company in history has been able to achieve a turnaround by offering continued price subsidies." But next month, something shifted as Taobao doubled down on discounts while JD.Com debuted a new shopping channel called 10 Billion Yuan, referring to subsidies.

Last March, Dai Shan, the president of Alibaba’s digital business at the time, set "good products at low prices" as one of Tmall’s three development directions and investment focuses during a closed-door brand talk. Soon in April, Taobao launched a sales promotion channel on its mobile application to sell more cost-effective items.

Editor: Emmi Laine