China's JD.com takes aim at Alibaba with Paipai relaunch

BEIJING, July 17 Thu Jul 17, 2014 8:08am EDT

BEIJING, July 17 (Reuters) - Chinese e-tailer JD.com on Thursday relaunched its Paipai online marketplace, opening a new front in its escalating battle against the country's e-commerce market leader Alibaba Group Holding IPO-ALIB.N.

Paipai's relaunch marks the first time that JD.com, the No.2 player by market share, has directly taken on Alibaba's core e-commerce offering, Taobao. Paipai and Taobao both provide an online marketplaces for consumers and small businesses to sell goods to one another.

Alibaba, which is preparing for a potentially record-breaking initial public offering (IPO) in New York this summer, said in its investor prospectus that gross merchandise volume on Taobao reached $48 billion during the March quarter.

JD.com acquired Paipai in March as part of a sweeping $215 million deal with Tencent Holdings that effectively aligned the two companies against Alibaba.

JD.com on Thursday said that it had incorporated its own search algorithms and delivery infrastructure into Paipai and would keep advertising rates low to lure new sellers.

The company, which is expected to receive a boost in the mobile market thanks to its alliance with Tencent, raised $1.78 billion in a May IPO in New York but remains unprofitable. (Reporting by Beijing newsroom; Editing by David Goodman)

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