Taobao Overseas' GMV exceeded 20 billion US dollars this year | Exclusive from 36Kr.

Written by Peng Qian

Edited by Qiao Qian and Yang Xuan

36Kr exclusively learned that the overseas business "Taobao Overseas" under Alibaba International Commerce has achieved a GMV of over 20 billion US dollars this year, achieving double-digit growth compared to the same period last year.Taobao Overseas is the overseas version of the Taobao APP, mainly targeting overseas Chinese consumer groups.

Taobao Overseas has a larger volume than Temu's entire last year and is comparable to Tiktok's last year. Compared to the attention received by the "Four Little Dragons of Overseas Expansion", Taobao Overseas appears to be rather low-key.

Looking at its historical context, Taobao Overseas has been in operation for more than 10 years, and its establishment is only a few years later than that of the experienced cross-border leading player Shein.

Initially, "Taohaiwai" launched in 2013 was managed by a small team to meet the spontaneous purchasing needs of overseas Chinese consumers who knew Taobao. Merchants did not have a strong perception of this, and the platform did not invest much effort in its operation. In 2016, following Alibaba's consumption upgrade strategy, "Taohaiwai" was upgraded to "Tmall Overseas", increasing the brand supply from Tmall, and establishing localized operation teams in Hong Kong, Taiwan, Singapore, Malaysia, and Australia, and providing official logistics services. In 2018, Tmall was upgraded to Big Tmall, and this business was placed in the Tmall Import and Export Business Group under Big Tmall and renamed "Tmall Taobao Overseas". Since January 2022, Taobao Overseas has been placed in the International Commerce Group and is currently managed by Ye Tian.

Compared to large-scale event sponsorships and celebrity endorsements, Taobao Overseas is currently more inclined to achieve growth by upgrading its services.

In July this year, Taobao, the International Commerce Group, and Cainiao jointly upgraded the "Cross-border Worry-free Shopping" in 2023 and launched the "Global Clothing Free Shipping" project. Users in six countries and regions including Singapore, Malaysia, South Korea, Hong Kong, China, Macau, China, and Taiwan, China are divided into different free shipping thresholds according to the consumption power of different countries and regions, and free shipping is available for purchases of 99 - 199 yuan.

36Kr learned that the average order value of Taobao Overseas is relatively high in cross-border e-commerce, and the official free shipping threshold is easily achievable, which has attracted a group of consumers. At the same timeunder the clothing free shipping plan, previously, consumers had to contact different courier companies for delivery at different stages of domestic and overseas logistics. Now, there is an option for Cainiao to undertake the entire delivery. If the latter is chosen, the delivery time for Taobao Overseas users can be significantly shortened to 5 - 7 days, compared to the previous 15 - 30 days.

According to 36Kr, after the launch of this project, the overseas GMV of Taobao's clothing industry increased by nearly 40% year-on-year (from August to October this year).Domestic clothing merchants are deeply trapped in the predicament of the "high return rate of women's clothing". Participating in the clothing free shipping project has brought a good increase to merchants. A plus-size women's clothing boss from Taobao told 36Kr that just by clicking the registration button, the GMV increased by more than one million yuan in one month.

Under the clothing free shipping plan, the logistics costs are subsidized by the platform, and merchants no longer have logistics costs - previously, this cost accounted for 30% of their overall income. Now the platform only charges a commission, accounting for 20% of the overall selling price of the merchant's goods. Specifically, once the merchant ships the goods to the designated warehouse in China and the goods are confirmed as received, the merchant can receive 80% of the payment. Even if the order transaction fails and the consumer initiates a return, the goods will be returned to the designated address outside China, and the platform and the insurance company will handle it. In simple terms, merchants still have the pricing power and the right to the goods, but they need to entrust the goods to Taobao Overseas at 80% of the selling price of the goods, and at the same time transfer the subsequent risks and management responsibilities to the platform.

Official data shows that since the launch of the global free shipping plan for large clothing, more than 200,000 merchants have signed up, and in August, about 70 million products joined the overseas free shipping plan.

Nowadays, Alibaba is the leading e-commerce player with the richest overseas ecosystem and the largest number of covered countries and markets. Although it is relatively scattered and difficult to manage, it can conduct more refined operations for different markets. Temu, Shein, and Tiktok are platforms that cover the vast majority of countries in the world, which are more focused and easier to manage, but also have greater policy risks.

Alibaba's Overseas E-commerce Layout

Among Alibaba's many overseas businesses, Taobao Overseas has a unique positioning. On the user side, the target of Taobao Overseas is nearly 100 million overseas Chinese, and it is also layout in countries and regions with a large number of Chinese people; on the supply side, Taobao Overseas emphasizes richness. There are both white-label products from Taobao and brand products from Tmall on the platform, and its average order value is also significantly higher than other cross-border players; in terms of the specific model, Taobao Overseas is a platform model, and logistics trusteeship accounts for only a small proportion.

Since September this year, Taobao's overseas free shipping plan has expanded from the clothing category to merchants in all industries, and the free shipping sites have further expanded to 13, including Australia, Canada, Japan, and Cambodia. People close to Taobao Overseas said that Taobao Overseas is making more language explorations based on user needs. The English version of Taobao was launched in Thailand, Cambodia, and Australia in October, and it will also be launched in Hong Kong and Macau.

Currently, Taobao Overseas is promoting the overseas free shipping service to Mongolia and Central Asia, and will accelerate the coverage of different countries and regions next.

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