Taobao's overseas expansion achieves initial success

Author | Liu Baodan

Editor | Zhou Zhiyu

Pushing the Double 11 promotion to the global stage, Taobao made a good start in the battle for going global.

On October 28th, Wall Street News learned that in the second phase of the promotion characterized by spot sales, Taobao's overseas business achieved strong growth, with nearly 70,000 global free shipping merchants doubling their transaction volume year-on-year, especially in places like Hong Kong and Singapore where the scale of new customers doubled.

Interestingly, in tropical Singapore, the transaction volume of down jackets increased by 27% year-on-year. A person in charge of cross-border e-commerce for merchants mentioned that Singapore has no winter, so when they take vacations, they like to go to cold places to see snow or go skiing. Taking advantage of the Double 11 promotion on Tmall, buying down jackets has become a "new choice" for locals.

The overseas market of Taobao has seen a doubling growth, partly because Taobao's overseas expansion has just started and the business base is relatively low, and partly because the Double 11 promotion is also an important first battle for Taobao to launch overseas with the integration of various resources.

On October 12th, at the 2024 Tmall Double 11 Global Carnival Season media communication meeting, Mu Er, General Manager of Integrated Marketing and Tmall Marketing Department of Taotian Group, stated that Taotian has made significant breakthroughs in globalization, with significant improvements in free shipping services, product categories, and delivery efficiency.

A month ago, at a business conference in Hong Kong, Taobao announced that it would invest 1 billion to turn Hong Kong into a free shipping zone. Hong Kong consumers can enjoy free shipping on Taobao for purchases over 99 yuan. Currently, 92% of the products on Taobao support official direct delivery to Hong Kong.

Mu Er mentioned that free shipping covers a wide range of industries, including popular categories such as 3C digital products, home storage, sports and entertainment, cosmetics and skincare, totaling over 1 billion products, with delivery time reduced to 3 to 4 days.

In fact, in order to catch up with the Double 11 promotion, Taobao started brewing its overseas strategy in July to lay the groundwork for going global.

In July this year, Taobao Clothing launched the "Great Clothing Global Free Shipping Plan", relying on the Taobao APP, mainly serving overseas Chinese, with the platform providing postage subsidies for global free shipping. So far, Taobao has opened up direct mail for clothing categories in over 200 countries and regions worldwide.

After two months of exploration, Taobao has comprehensively upgraded its overseas strategy to the "Taobao Tmall Overseas Growth Plan", expanding from clothing categories to all industries and launching a comprehensive overseas expansion.

An insider at Taobao stated that investing 1 billion to turn Hong Kong into a free shipping zone is just the beginning, and the investment intensity of Taobao in going global can be described as huge.

Of course, the reason why Taobao's overseas expansion has quickly received positive feedback is largely due to the relatively light model chosen by Taobao for going global.

Firstly, Taobao chose a semi-managed model, where merchants do not need to open another store, but only need to sell their existing goods from China to overseas through the Taobao APP.

Compared to other cross-border platforms, merchants participating in Taobao's overseas expansion have the right to set prices and own the goods, without the need to increase additional operating costs or consider cross-border logistics and customs clearance. Merchants only need to send the goods to domestic consolidation warehouses.

Moreover, Taobao guarantees the logistics process, provides overseas postage subsidies, and directly offers free shipping to overseas consumers. It is understood that for overseas logistics and user operations, Taobao has entrusted this to Alibaba International However, for Taobao, the essence of going global is to find more markets for domestic goods, mainly targeting overseas Chinese. Compared to e-commerce platforms taking a localization route, Taobao may lack competitiveness in terms of products and markets.

Currently, Taobao's global expansion is still in a stage of heavy investment. To transport goods from China and ultimately deliver them to consumers, every step requires a cost in terms of capital. Taobao needs to carefully calculate the return on investment.

The explosive promotion overseas is just a beginning. Although Taobao has won the first battle in going global, there is still a long way to catch up with overseas e-commerce giants. This is destined to be a difficult chase