Alibaba's Taobao Introduces Free Overseas Shipping to Compete with Rivals

Author: Anusuya Lahiri | July 23, 2024 11:25am

Alibaba Group Holding Ltd (NYSE:BABA) is introducing free overseas shipping on apparel orders through its flagship retail platform, Taobao, in a strategic move to compete with cross-border e-commerce rivals PDD Holdings Inc (NASDAQ:PDD) Temu and Shein.

The program will start on August 3 and initially target shoppers in Singapore, Malaysia, South Korea, Taiwan, Hong Kong, and Macao, Nikkei Asia reports.

Taobao plans to expand the program to additional Asian markets by the end of the year and is actively encouraging more merchants to participate.

Also Read: Chinese Stocks Rise as Central Bank Cuts Interest Rates to Stimulate Growth

A senior manager at the company described the initiative as Taobao’s most strategic change this year.

It aims to address high return rates for apparel, particularly women’s clothing ordered during live-streaming events.

The new program will cover return costs, with items sent back to Taobao’s overseas warehouses, reducing the risk for sellers.

“Intense competition across various industries in China has resulted in low-profit margins for businesses, so we are helping some of the top-notch merchants on Taobao to explore overseas markets,” the senior manager said.

Taobao will subsidize shipping costs, requiring merchants to ship items only to Taobao’s warehouse in China. Alibaba’s logistics arm, Cainiao, will handle the remaining logistics.

Alibaba has lost nearly 21% in the last 12 months as it battled domestic e-commerce rivalry and strives to accomplish its artificial intelligence ambitions amid U.S. sanctions on China’s access to advanced semiconductor technologies.

Price Action: BABA shares were trading lower by 0.89% at $75.96 at the last check on Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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Posted In: BABA PDD