Alibaba’s Taobao marketplace expands in Singapore

Global Business

Chinese E-commerce giant Alibaba goes international with it’s first stop in Singapore. In 2013,  Alibaba launched its Taobao marketplace in Singapore, seeking to make its mark in Southeast Asia after using Hong Kong and Taiwan as a stepping stone to make the jump overseas.

With the launch, Taobao now has a regional landing page and also and a dual-language registration page for Southeast Asia, and the new online retail platform is becoming more and more popular. CCTV’s Miro Lu reports.

Zhou Baitao, a Singapore local resident,  bought his ping pong table on Taobao, the online retail platform operated by Alibaba Group. He says he couldn’t find what he wanted in Singapore and prices of similar products are twice as much as what he paid online.

“My family moved to Singapore around 2010. Since 2012, I started shopping from Taobao. I found in Singapore there are many things I can’t find, especially some sports gear. I can’t find my ideal ones. So I search Taobao. Taobao has a very good search engine, so everything you want, even everything you don’t know, you can find.” Zhou Baitao said.

These days Zhou not only shops for his family, he also teams up with his neighbors to share cargo volume and split transport cost. The group has organized several shipments this year and the Zhou family alone has spent almost $5000 shopping on Taobao.

Singapore is the first stop for Alibaba’s global expansion. Taobao launched its Southeast Asia site in the city-state last year. The company says it has more than 280,000 registered users in Singapore and more than 210,000 in neighboring Malaysia.

For customers that reside outside of China, Alibaba needs to address two main issues to ensure smooth shopping experience: payment and delivery. To achieve that, Alibaba has made strategic partnership with the local banking network. Consumers in Singapore can now pay for Taobao purchases by their local debit and credit cards. On the delivery front, Alibaba bought into Singapore’s postal service in May. It now holds 10 percent stake in SingPost. The partnership aims to provide Alibaba access to SingPost’s regional logistics network. But the reality is – for avid shoppers like Zhou and his friends – these solutions are not good enough.

“We noticed if you use local credit card, there is some management fees and also some money exchange rate difference. Our logistic channel is different from the international channel Taobao is providing. We are not satisfied in SingPost because of high cost.” Zhou Baitao said.

Alibaba may argue that the payment and delivery solutions they provide will open up doors for local Singaporeans who don’t have Chinese bank accounts or knowledge on China’s domestic logistics system. But the brand awareness among these new consumers is still at its infant stage. For now, Alibaba’s global expansion still relies heavily on overseas Chinese like the Zhou family.