Taobao's overseas expansion enters a period of explosive growth

Author | Huang Yu

Editor | Wang Xiaojun

In recent years, as global cross-border e-commerce has flourished, the e-commerce giant Taobao has also stepped onto the front line, truly delving into cross-border e-commerce operations since last year, driving rapid growth for Taobao's overseas expansion.

On September 22, Taobao announced that this year's Double 11 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 launch Double 11 simultaneously in 20 countries and regions around the world for the first time, targeting global consumers with five different language versions.

Behind this initiative is Taobao's advantage in product supply, which has rapidly grown into an undeniable force in the global cross-border e-commerce platform. This also means that the market space for Taobao's overseas expansion has been further opened, and the targeted consumers will no longer be just overseas Chinese or international students.

Merchant recruitment is currently the focus of Taobao's overseas expansion. Ye Jianqiu, General Manager of Taobao Overseas, pointed out that since the launch of the "Taobao Tmall Overseas Growth Plan" last year, over 1 million merchants from more than 10,000 industry categories have signed up to join this plan.

This plan has evidently become a key turning point in the development of Taobao's overseas business, driving it into a period of explosive business growth.

Ye Jianqiu revealed that the GMV growth rate of signed merchants on Taobao Overseas is already three times that of the overall Taobao overseas transaction market; at the same time, in terms of user growth, since April this year, the growth scale of new users on Taobao Overseas has exceeded 200%, with more than half being non-Chinese.

Earlier this year, Taobao also topped the download charts in the APP stores of 16 countries and regions worldwide.

Behind this series of data is a favorable proof of the recognition of Taobao's product supply and a reflection of the value of the Taobao overseas team.

According to insiders from Taobao Overseas, the overseas version of Taobao was launched as early as 2015 to meet the spontaneous shopping needs of overseas Chinese, managed by a small team; in 2016, "Taobao Overseas" was upgraded to "Tmall Overseas," and in 2018, the business was renamed "Tmall Taobao Overseas," belonging to the Tmall Import and Export Business Group.

By 2022, Taobao's overseas business was incorporated into Alibaba's International Digital Commerce Group, gradually ramping up efforts. However, it wasn't until 2024, marked by the launch of the "Taobao Tmall Overseas Growth Plan," that the Taobao overseas team began to intensify merchant recruitment and engage more deeply in merchant operations and fulfillment.

"It can be said that this is when Taobao Overseas truly gained operational capabilities," said the aforementioned insider. Currently, the relationship between Taobao Overseas and domestic Taobao mainly revolves around cooperation in domestic merchant recruitment and the integration of domestic supply, while specific operations overseas are completely separate.

However, Taobao Overseas currently does not have a separate APP; when users open the Taobao APP in overseas regions, it will automatically switch to the overseas site Taobao's overseas expansion is currently positioned to become the first choice for Taobao system merchants going abroad, serving merchants who currently have Taobao or Tmall stores in China.

It is reported that Taobao's overseas expansion offers a light asset model with "0 returns and refunds, 0 operating costs." Merchants only need to sign the "Overseas Growth Plan" in their existing Taobao store to automatically synchronize sales to overseas sites, with the platform covering returns and providing a complete overseas chain.

The head of the Taobao Overseas Merchant Center, Yi Shan, stated that compared to other cross-border e-commerce platforms, Taobao's overseas expansion provides the lightest overseas solution for Taobao system merchants, which is currently the biggest differentiating factor of the entire platform.

It is reported that Taobao or Tmall merchants do not need to open a new store or build a separate overseas operation team; they only need to enter their store account password and click "One-click Contract" to join Taobao's overseas expansion.

At the same time, Yi Shan told Wall Street Journal that compared to the popular all-managed model in recent years, Taobao's overseas expansion has made the business model lighter without changing the merchants' operational rights and goods rights, while merchants still hold the pricing power of their products.

The emphasis on a lightweight business model is because the Taobao overseas expansion team has observed that, in the context of the booming cross-border e-commerce industry, many domestic merchants are still hesitant due to certain dilemmas and bottlenecks.

Yi Shan pointed out that the overseas chain is long, and many merchants are still hesitant because they face challenges such as operations, customs clearance, overseas inventory, and returns and exchanges that drive up costs. Therefore, Taobao's overseas expansion has invested heavily in infrastructure to provide lightweight solutions to help merchants save costs.

"Regarding the return and exchange issues that trouble merchants the most today, we have launched local return services in 12 global sites, and the insurance companies we cooperate with will handle returns comprehensively, while we will conduct normal settlements for merchants. In fact, this measure or platform policy greatly solves the biggest dilemma for domestic merchants wanting to go abroad," Yi Shan exemplified.

Since last year, the Taobao overseas expansion team has increased its efforts in building infrastructure for the entire overseas chain.

Ye Jianqiu stated that the Taobao overseas business team focuses on enriching the capabilities around the "omnipotent Taobao," including global direct mail logistics networks, language versions, free shipping, and return and exchange services.

It is reported that Taobao's overseas expansion currently supports direct mail in 20 countries and regions, with 12 sites supporting cross-border free shipping and local return and exchange services. Additionally, it has also launched four foreign language versions.

"This is the main capability and accumulation that Taobao's overseas expansion has built during this period." In Ye Jianqiu's view, with a rich and competitive product offering, the construction of fulfillment capabilities on the overseas side allows Taobao's overseas expansion to maintain its current growth rate, and there will be more investments and actions in these three areas and products in the future.

In recent years, as the domestic e-commerce industry has reached its growth peak, e-commerce going abroad has come into the spotlight, becoming one of Alibaba's important strategies for finding a second growth curve. Currently, Alibaba Group has many overseas businesses; in terms of C-end cross-border e-commerce platforms, in addition to Taobao's overseas expansion, Alibaba also has AliExpress, Lazada, and others.

Regarding the direct positioning differences of these platforms, Ye Jianqiu pointed out that AliExpress mainly targets the European and American markets, Lazada focuses on Southeast Asian local e-commerce, while Taobao's overseas market has about 60-70% in Asia, with some in Canada and Australia, so there is some market overlap, but most are differentiated "For us, Taobao or the entire Alibaba's overseas collaboration is greater than competition. Because the global market is a very large market, its density is very low, and it is difficult for us to engage in intense competition internally in one place; it is more about collaboration."

As the big brother of Chinese e-commerce, Taobao has a vast supply of goods, giving it a natural advantage to achieve another cross-border e-commerce platform. Of course, the current competition in cross-border e-commerce has entered a "protracted war" phase. To overtake on a curve and create another Taobao overseas, Taobao still faces considerable challenges