Alibaba Group, China's largest e-commerce company, will spin off its daily deal website Juhuasuan to tap a growing demand from small vendors who want to sell their products and services online.

The Juhuasuan site, Ju.taobao.com, will serve a niche market to help local service providers to reach their customers, Alibaba said yesterday.

Spinning off Juhuasuan follows the restructuring of Alibaba's consumer e-commerce operations four months ago as the group split its Taobao unit into Taobao Mall, Taobao Marketplace, which hosts trade between individual buyers and sellers, and eTao, its online shopping search engine business.

Juhuasuan is set to become an e-commerce platform instead of just being a website that offers services and products, the group said.

Juhuasuan is China's No. 1 group-buying website by average monthly visits, ahead of other independent sites such as Lashou and Meituan, said iResearch Inc, a Beijing-based Internet consulting firm.

Vendors will need to open an online shop at Taobao.com to offer daily deals to customers, and are required to place a deposit at Taobao, which goes into a consumer protection fund.

China's group-buying market grew 0.3 percent month on month to 1.9 billion yuan (US$298 million) in September, eTao.com said in a report.