Taobao Marketplace and Tmall, China’s largest shopping websites, have partnered with eight Chinese logistics companies to launch an international parcel-forwarding service aimed at simplifying and lowering the cost of shipping online purchases from China to select locations in Asia.
The service—initially available in Hong Kong, Macau and Taiwan—can save Taobao and Tmall shoppers in those areas up to 50% in shipping and handling fees, according to company officials.
Owned by Chinese e-commerce company Alibaba Group, Taobao and Tmall are online marketplaces that host tens of thousands of individual merchants and sellers, each responsible for delivering their products to buyers. Taobao and Tmall in the past had little involvement in the logistics of package delivery.
In recent months, the websites have been trying to attract more shoppers from outside the PRC, targeting pockets of Asia with large Chinese-speaking populations. But that effort has been complicated by the added difficulties and costs that come with cross-border delivery of small parcels to individual consumers.
The vast majority of Taobao and Tmall merchants don’t offer international shipping, and the few that do charge premium rates for the service. In some cases, international shipping costs can exceed the value of the goods being moved, a situation buyers find unacceptable.
According to a story that appeared this month in Hong Kong’s Ming Pao Daily News, more than 40 Hong Kong residents who tried to save money by collectively arranging to have Taobao-purchased goods shipped through a Shenzhen, China, freight company complained that their orders had not been delivered in more than a month. The Shenzhen company blamed the delay on heavy rains that caused a bridge to collapse, isolating a key warehouse in Yiwu, China, and on a loss of electricity at 60 other warehouses that prevented access to computerized customer shipping information, according to the newspaper.
To lower shipping costs and make online shopping more convenient and reliable for overseas consumers, Taobao and Tmall developed the International Parcel Forwarding Service in partnership with eight logistics companies: YTOXL Courier, 4PX Express, SF Express, HOYOYO PRouter, Panli, Lequgo, ZTO Express and UC 56.
When ordering goods on Taobao or Tmall, online shoppers in Hong Kong, Macau and Taiwan have the option of selecting the Taobao/Tmall-backed service instead of unknown third-party providers. Goods shipped through the service are delivered to the China warehouses of designated forwarding-service providers, which consolidate multiple purchases into packages bound for the same Asian city or region. The consolidated goods are then shipped on to the overseas destination, unbundled and forwarded to their final destinations.
Freight consolidation helps lower shipping costs by 30-to-50 percent because larger containers get more favorable rates. The system also eliminates the need for consumers to pay multiple shipping fees to cover different legs of overseas delivery. In cases where orders are placed with Chinese merchants offering free shipping within China, consumers are not charged anything for transport within the PRC, so only pay for the overseas leg.
Besides lowering shipping costs, the service will also make more merchandise available to overseas Taobao and Tmall shoppers. That’s because an international shipping option is now available to consumers even if they are buying from merchants that don’t offer international shipping. All merchants need to do is send orders to designated warehouses within China; the Taobao/Tmall service handles the cross-border component.
The International Parcel Forwarding Service includes a Web-based package-tracking system so buyers can follow the progress of their orders online. “Compared to third-party parcel forwarding service providers, the International Parcel Forwarding Service provides overseas consumers with a more reliable alternative that allows them to leverage the built-in logistics system and access transparent status updates regarding their purchases,” said Daphne Lee, director of Taobao International Business, in a press release.
Taobao and Tmall officials said they expect to expand the service to other Asian cities and countries in the near future.