Alibaba Group Holding Ltd is taking a new approach to boosting sales online: paying its customers to cut their prices.

China's biggest e-commerce company plans to spend 300 million yuan ($47 million) on summer promotions for goods ranging from iPhones to televisions to air-conditioners sold through its Tmall. The website, which operates a marketplace similar to eBay Inc's, is subsidizing its vendors' deals for their customers.

The program steps up Alibaba's battle with online rivals 360Buy.com and Tencent Holdings Ltd for China's Internet shoppers, estimated at 193 million by Boston Consulting Group.