China's Alibaba launches e-commerce subsidies of $7 bn in consumption boost

Beijing: The online retail platform of Chinese tech giant Alibaba announced Wednesday that it will issue $7 billion in subsidies for certain purchases...

Beijing: The online retail platform of Chinese tech giant Alibaba announced Wednesday that it will issue $7 billion in subsidies for certain purchases, providing a much-needed boost for a country struggling with sluggish spending.

Taobao, China's e-commerce champion launched by Alibaba in 2003, said in a WeChat statement that the 50 billion yuan ($6.97 billion) would "directly subsidise consumers and merchants" over a 12-month period starting Wednesday.

The spending incentives on Taobao's "flash purchase" feature will take the form of "red envelopes" -- a digital form of traditional cash gifts -- as well as discounts on products, deliveries and commissions, the statement said.

Taobao said that the subsidies will "provide consumers with preferential and convenient services and experiences, further stimulating consumption vitality".

Beijing is battling to stave off deflationary pressure, which has threatened to dampen economic growth even as challenges elsewhere mount.