Nikita Mishra
Jul 26, 2022

Alibaba to shut down Tmall in Hong Kong

Sources tell Campaign the reasons for the retreat have nothing to do with performance or competition from HKTVMall, but is instead part of the company's consolidating business strategy.

Alibaba to shut down Tmall in Hong Kong

Alibaba has decided to end Tmall Hong Kong on October 31 as a result of a shift in business strategy. Campaign Asia-Pacific has received confirmation of the retreat, and the last order date for shoppers is set at August 21 while the last delivery date for merchants is August 26.

Tmall mobile app users have been notified of the development:

"We will focus on serving Hong Kong customers via Taobao, and we will strive to improve logistics, operations, and customer service, as well as enhance the shopping experience."

Tmall, a business-to-consumer ecommerce platform, was launched in Hong Kong in May 2021 to sell products from local and international brands in several popular categories including skincare, cosmetics, clothing, home appliances, and 3C products. The online shop complemented the existing Taobao Hong Kong, which served as a consumer-to-consumer model, providing Hong Kong shoppers with products from mainland China from small and medium-sized merchants.

What does the decision mean for employees and Hong Kong consumers?

Campaign Asia-Pacific has learnt from credible company sources that the reason for this "is a part of the bigger business shift to consolidate resources of both Taobao Hong Kong and Tmall.”

A source at Alibaba said: “The number of online shoppers has increased in Hong Kong during the Covid period. But given how both Taobao and Tmall are equally efficient in serving the local market, they both accept local payment methods and delivery from mainland is as fast as in three days, it doesn’t make much business sense to have two platforms running. We’ve decided to shift resources and logistics to one marketplace and further enhance the Taobao experience."

Was growing competition from HKTVmall, a much bigger and a more reliable local app, a reason for the retreat?

The source refutes: "Tmall showed overall growth in terms of user base, value of orders and the browsing frequency over the last year of its operations in Hong Kong. The reason is to consolidate and sell mainland goods through Taobao."   

According to sources, Tmall will refund deposits and annual fees to local merchants and not a single employee will be laid-off in the move. "It's the same team which works on both Taobao Hong Kong and TMall, so it's a shift of resources, not culling of jobs," the source said. 

In a separate update, the Alibaba Group has authorised the company's management to apply for a primary listing on the Main Board of Hong Kong Stock Exchange. After completion of the primary listing process, which is expected to occur prior to the end of 2022, Alibaba will become a dual-primary listed company on the New York Stock Exchange in the form of American Depositary Shares and on the Hong Kong Stock Exchange in the form of ordinary shares.

Source:
Campaign Asia

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