Taobao's overseas expansion enters a boom period
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Author | Huang Yu
Editor | Wang Xiaojuan
In recent years, with the booming development of global cross-border e-commerce, the e-commerce giant Taobao has also rushed to the front lines, truly delving into cross-border e-commerce operations since last year and driving rapid growth in Taobao’s overseas ventures.
On September 22, Taobao Overseas announced that this year’s Double 11 event will invest 1 billion yuan in marketing subsidies in overseas markets, aiming to help 100,000 merchants double their overseas transactions during Double 11. At the same time, Taobao will, for the first time, launch Double 11 simultaneously in 20 countries and regions worldwide, offering five different language versions for global consumers.
Behind the implementation of this initiative is the advantage brought by Taobao’s product supply. Taobao Overseas has rapidly grown to become a force in the global cross-border e-commerce platforms that cannot be ignored. This also means that the market space for Taobao’s overseas strategy has been further opened up, and the target consumers are no longer limited to overseas Chinese or student groups.
Merchant recruitment is currently the main focus of Taobao Overseas. Ye Jianqiu, General Manager of Taobao Overseas, pointed out that since the launch of the “Taobao Tmall Overseas Growth Plan” last year, more than 1 million merchants across more than 10,000 industry categories have signed up and joined the plan.
Obviously, this plan has become a key turning point in the development of Taobao's overseas business and has driven it into a period of explosive business growth.
Ye Jianqiu revealed that the GMV growth rate of contracted merchants on Taobao Overseas is now three times that of the overall Taobao overseas transaction index; in terms of user growth, since April this year, the scale of new users on Taobao Overseas has increased by over 200 percent, with more than half of them being non-Chinese.
Earlier this year, Taobao also topped the download charts in the App Store in 16 countries and regions worldwide.
These figures are strong evidence of the recognition of Taobao's product supply, as well as a reflection of the value of the Taobao Overseas team.
Wallstreetcn has learned from people inside Taobao Overseas that the overseas version of Taobao was launched as early as 2015, originally to meet the spontaneous shopping needs of overseas Chinese, managed by a small team; in 2016, “Tao Overseas” was upgraded to “Tmall Overseas,” and in 2018, this business was renamed “Tmall Taobao Overseas,” which belonged to the Tmall Import and Export business group.
By 2022, Taobao’s overseas business had been assigned to Alibaba International Digital Commerce Group and began to gradually ramp up. But it wasn’t until 2024, marked by the launch of the “Taobao Tmall Overseas Growth Plan,” that the Taobao overseas team started ramping up merchant recruitment and became more deeply involved in merchants’ operations and fulfillment.
“You could say, it’s only at this time that Taobao Overseas has truly gained operational capability,” said the aforementioned insider. Currently, the relationship between Taobao Overseas and domestic Taobao mainly lies in cooperation in domestic merchant recruitment and the integration of domestic supply, while actual operations overseas are entirely separated.
However, Taobao Overseas does not currently have a standalone app; when users open the Taobao app abroad, it will automatically switch to the overseas site.
Taobao Overseas is currently positioned to be the first choice for Taobao ecosystem merchants to go overseas, serving merchants who already have Taobao or Tmall stores domestically.
Reportedly, Taobao Overseas provides a "zero return/refund, zero operating cost" light-asset model. Merchants only need to sign up for the “Overseas Growth Plan” via their existing Taobao stores, and their products will be automatically synchronized to sell on the overseas site, with the platform covering returns and providing a complete export solution.
Yi Shan, head of Taobao Overseas Merchant Center, stated that compared to other cross-border e-commerce platforms, Taobao Overseas provides the simplest going-abroad solution for Taobao ecosystem merchants, which is currently the platform’s greatest differentiator.
Reportedly, Taobao or Tmall merchants do not need to open a new store or build a separate overseas operations team; they only need to enter their store account and password and click "One-Click Sign-Up" to join Taobao Overseas.
At the same time, Yi Shan told Wallstreetcn that compared to the currently popular comprehensive hosting model, Taobao Overseas has lightened the business model even further, without changing the merchants’ operational and goods ownership rights, while merchants still retain pricing power over their products.
The emphasis on a lightweight business model is because the Taobao Overseas team has observed that in the context of booming cross-border e-commerce, many domestic merchants are still hesitating due to various difficulties and bottlenecks.
Yi Shan pointed out that the overseas supply chain is very long, and many merchants are still watching and waiting because they face challenges such as operations, customs clearance, overseas stocking, returns and exchanges, which drive up costs. Therefore, Taobao Overseas has now invested heavily in infrastructure and provides lightweight solutions to help merchants save costs.
“To address merchants’ current biggest headache—returns and exchanges—we have already launched local return services at 12 sites globally. The insurance company that cooperates with the platform will handle all returns, and we will settle with merchants as normal. Actually, this measure or platform policy greatly solves the biggest dilemma for domestic merchants going overseas,” Yi Shan exemplified.
Since last year, the Taobao Overseas team has stepped up efforts to build end-to-end infrastructure for international expansion.
Ye Jianqiu stated that the Taobao Overseas business team is mostly building out capacities related to “all-powerful Taobao,” including a global direct shipping logistics network, language versions, free shipping, and return and exchange services.
Reportedly, Taobao Overseas currently supports direct shipping to 20 countries and regions, with 12 of those sites supporting cross-border free shipping and local return/exchange services. In addition, four foreign language versions have been launched, among others.
“This is the main area of capability and accumulation that Taobao Overseas has built in this period,” Ye Jianqiu believes. With highly competitive, abundant products, building out fulfillment capabilities overseas enables Taobao Overseas to maintain its current growth rate, and there will be more investment and developments in these three areas and in products in the future.
In recent years, as domestic e-commerce growth reaches its ceiling, overseas expansion has become the focus, and one of Alibaba’s important strategic moves for finding a second growth curve. At present, Alibaba has quite a few overseas businesses. For consumer-facing cross-border e-commerce platforms, besides Taobao Overseas, there are also AliExpress, Lazada, and others.
Regarding the positioning differences between these platforms, Ye Jianqiu pointed out that AliExpress mainly targets Europe and America, Lazada mainly focuses on local e-commerce in Southeast Asia, while the Taobao Overseas market is about 60 to 70 percent in Asia, with some in Canada and Australia, so there is some overlap, but most of it is differentiated.
“For us, cooperation between Taobao or the entire Alibaba overseas ecosystem outweighs competition. Because the global market is so huge and low-density, it’s difficult for us to have intense competition in one market—instead, it’s more about cooperation.”
As the elder statesman of Chinese e-commerce, Taobao has massive product supply and a natural advantage for creating yet another cross-border e-commerce platform. Of course, as current cross-border e-commerce competition enters a “war of attrition,” to overtake on the curve and build another Taobao overseas, Taobao Overseas still faces considerable challenges.
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