Alibaba’s China-focused marketplace Taobao has joined the wave of Chinese e-commerce platforms launching cross-border operations with a plan to ship clothing globally for free. The platform will look to follow in the footsteps of the likes of Temu with an initial move to cover Asian territories including Hong Kong, Singapore, Malaysia, and South Korea.

Why it matters: The move illustrates Taobao’s efforts to tap into a broader global market while also engaging in competition with Pinduoduo at home.

Details: Taobao aims to reach Australian shoppers as early as the end of this year before expanding further afield. The program will look to attract Taobao merchants selling not only men’s, women’s, and children’s apparel, but also sports and outdoor clothing, as well as shoes and bags.

• Under the model, Taobao will heavily subsidize shipping fees, a strategy that Chinese companies frequently use when expanding overseas to challenge existing platforms embedded in local markets.
• Apparel merchants on Taobao can directly sell items to “billions of consumers worldwide” by joining the plan without the need for complex procedures, according to Taobao and Tmall Group.
• The program is set to adopt a so-called “half-fulfillment” model, which is also used by AliExpress and its counterparts Temu and Shein, supposedly liberating sellers from concerns about international logistics and delivery. 
• On the official application page, Taobao highlights “zero returns and zero refunds” as the biggest feature of the plan, sending signals to sellers that the platform will deal with any returns and further costs beyond the expense that merchants incur in sending items to Taobao’s China-based warehouses.

Context: Taobao sells items from numerous local clothing brands that its domestic rivals have no access to. Previously, people living outside China needed third-party transit resources to get items they bought from Taobao.