Alibaba Looks to Overtake Shein, Temu via Taobao, Tmall

Alibaba is reportedly looking to compete against the rising clothing merchants Shein and Temu by offering shipment subsidies to certain sellers in Tmall and Taobao.

Alibaba's new pan-clothing worldwide free shipping service is open to qualifying Taobao and Tmall merchants, enabling them to sell their goods directly to customers in several countries outside of the mainland.

Alibaba claimed that Taobao and Tmall merchants who offer products in the pan-fashion area, such as men's and women's clothing, sports and outdoor gear, shoes, bags, and accessories, are qualified to participate in this program.

Alibaba will manage the cross-border logistics; qualified merchants merely need to transport requested items to a designated consolidation warehouse in China. According to the statement, this arrangement presently covers a few Asian markets, including Hong Kong, Taiwan, Singapore, Malaysia, and South Korea.

With its most recent move, Alibaba is stepping up its efforts to take on the likes of Temu, a worldwide budget-shopping portal owned by PDD Holdings, and prominent Chinese fast-fashion retailer Shein.

Alibaba's early edge in foreign e-commerce through platforms like AliExpress and Lazada has been overshadowed by Shein, Temu, and ByteDance's TikTok Shop's impressive performance.

EU Regulators on Shein and Temu

While Alibaba is getting better at competing with Temu and Shein, EU regulators have recently targeted the two massive clothes retailers, demanding extensive justifications for their adherence to strict rules around online content.

Shein and Temu were named Very Large Online Platforms (VLOPs) in April and May, respectively, because they serve over 45 million users in the EU at the moment.

Due to this EU classification, the two e-commerce businesses must adhere to stringent guidelines meant to prevent dangerous and unlawful content from appearing on their platforms.

EU regulators are especially interested in how these businesses handle user notifications about illicit products, how their web interfaces are designed to avoid misleading tactics, and how they safeguard children.

Temu and Shein Dominance

By now, a lot of American consumers will be familiar with Temu. That's noteworthy for a business that was reportedly founded in September 2022, just a couple of years ago. In a short period, the company has become well-known for its orange bags and boxes that hold large quantities of inexpensive online goods that are shipped for free.

Consumers have resorted to Temu as an online dollar store, dubbed "If Amazon and Dollar Tree had a baby" by one Twitter user, and influencers have recognized the appeal of sharing "Temu haul" films of their shopping expeditions.

Conversely, Shein reportedly advertises its products on Facebook, Instagram, Pinterest, TikTok, and Pinterest. To effectively engage customers, the company has also formed connections with hundreds of influencers, offering some of them trips to China. It also runs targeted advertising efforts.