“Made in China”: The Transforming Portrait of e-commerce giant Taobao

IMAGE: RETAIL NEWS ASIA

By Samantha LEE                  FOR MASH MAGAZINe SPRING'24 Edition

The collar of your t-shirt will almost always read a familiar three words: Made in China. Even the shape of its letters can be considered iconography. Originally a simple indicator of where the garment was manufactured, the phrase itself has garnered a personality synonymous with the general reputation of Chinese exports: mass-produced, low quality and inexpensive.

The phrase brings to mind concerns about China’s fashion industry — from its environmental and labor practices to perceptions of poor quality. One retailer, in particular, bears the brunt of this stigma: Jack Ma’s e-commerce empire, Alibaba, and its flagship marketplace, Taobao.

Often referred to as the eBay of China, the $20 billion platform is known for its extensive range of unspecialized “everythings” - including apparel - at comparatively lower prices. Its popularity among the Chinese community is apparent, with over 1 billion product listings as of 2016 and a transaction volume of $415 billion in 2017. Today, Taobao’s indispensability to Chinese retail, combined with an increased demand for new and unique clothing pieces in younger shoppers, has mobilized a transformation in manufacturer and consumer culture in China.

Once labeled a ‘notorious market’ for counterfeit goods, Taobao was characterized as a platform for lesser, downmarket products. But - to Asian consumers - this opinion is becoming less and less accurate.

Today, the Taobao marketplace facilitates consumer-to-consumer retail by providing a platform for small businesses and individual entrepreneurs to open online stores. Many young, independent designers now credit Taobao with their success, building distinct customer followings off a growing appetite for fresh, alternative brands.

Taobao designers have cultivated a highly engaged online community, built from “Direct-To-Consumer” brands. With their unique ability to sell products directly to their community through personal livestreams tailored to consumers’ preferences, they use direct customer feedback to design new products and improve existing ones. Amid the global trend of growing and supporting small businesses, this new era of ‘Taobao brands’ is exactly what young, fashion-loving audiences are looking for.

The Taobao Maker Festival demonstrates this transformation. Introduced in 2016, the annual celebration promotes new and independent design on the platform. The recent festival, held through the end of April 2023, showcased the works of several small businesses in three distinctive exhibitions, each highlighting a different aspect of the Taobao platform: “Wonder,” “Technology” and “Trends.”

“We want to provide a platform that supports young creators closer to home, encouraging them to design more, make more, and try more,” Chris Tung, Chief Marketing Officer at Taobao, told media at the festival.

Even as Taobao brands increasingly resemble the practices of high fashion brands, Taobao manufacturers are still able to maintain a relatively affordable price point, upending the idea of cost as a reliable metric for quality. In fact, shopping directly from manufacturers provides a more accurate price point for labor and materials. 

"You can go to Zara and get this heartless, soulless commerce but for a similar price, you can buy from us and get the story and get the design and get the personality and community," says Taobao brand ‘Babyghost’ co-founder Joshua Hupper. 

Taobao departs from the frugality of the quantity-over-quality mindset that previously dictated the shopping and manufacturing world.

The freedom and accessibility that Taobao’s selling model has provided for retailers has affected China’s culture of labor, too. With the sheer volume of production required from Taobao sellers, “Taobao villages,” a unique manufacturing concept, have been established in rural areas of China. In small towns like Zhijiang and Xinhe, where their main business is e-commerce, Taobao villages have allowed many former agricultural workers to become entrepreneurs.

AliResearch claims the reach of doing business online is one of the most effective ways to eliminate rural poverty. Taobao villages are estimated to have created an estimated 8.3 million jobs.