Taobao Marches To Taiwan and Hong Kong For Expansion

Willis Wee
Tech in Asia12 September 2012

Alibaba-owned, China’s largest C2C online marketplace, began expanding to Hong Kong and Taiwan early this year, Tech in Asia learned in a press meeting with Hong Kong and Taiwan media on Monday. It has been hush-hush as the overseas teams in Taiwan and Hong Kong have been laying the foundations over the past months, which include logistics, payment, and customer service.

While the preparation work is still ongoing, Taobao Hong Kong and Taiwan have racked up impressive early numbers. According to Daphne Lee, director of overseas business, Taobao has attracted 1.2 million registered users in Hong Kong and 0.5 million users in Taiwan so far.

To make sense of Taobao Hong Kong’s figure, 1.2 million is about a quarter of Hong Kong’s internet users, which I think is quite impressive. Taiwan requires more work as users face logistic problems because delivering goods from China to Taiwan isn’t as simple. Plus, Taiwanese users still have doubts about whether the goods will actually arrive.

Many people also still have the impression that Alipay can only accept payment from local China banks, which of course would limit Taobao’s overseas business opportunities. But it was just earlier this year that Alipay also enabled Mastercard and VISA, which is a big boost for international users.

Taobao’s move to Hong Kong and Taiwan is pretty straightforward. Besides the close geographic proximity, the populations of Hong Kong and Taiwan are also largely made up of ethnic Chinese, which lowers the communication barrier.

Taobao’s expansion has also brought about some positive changes for merchants as well. Daphne said that CatWorld, a Taiwan-based merchant, had only a moderate income when it was on Yahoo Kimo online auction. But the numbers shot up after it joined Taobao, generating over 6 million RMB (about $1 million) in monthly sales.

Honestly speaking, the combined population of about 28 million in Hong Kong and Taiwan is just slightly above Beijing’s population. It’s a small figure. And I’m certainly not saying that the Hong Kong and Taiwan markets aren’t important — they are, because I believe the regions have bigger-than-average spenders when compared to the mainland. The move to Taiwan and Hong Kong also gives the Taobao team a taste of overseas expansion, and I’m pretty sure they won’t just stop at Greater China. Daphne revealed that Singapore and Malaysia are seeing quite a bit of interest in Taobao, too. I would even say that Taobao in English isn’t too far away.

But it won’t come until Greater China is conquered, and knowing how brilliant Jack Ma is, I would bet on the Alibaba Group winning in Taiwan and Hong Kong.