Header image source: Alibaba Group.
To understand where Taobao Shangou’s next phase of growth may come from, the upcoming Singles’ Day could offer some clues. At its campaign launch event in Shanghai, 36Kr spoke with Fan Yu, Alibaba Group’s CTO, chairman and CEO of Ele.me, and a partner at Alibaba. Fan discussed issues closely watched by the market: Taobao Shangou’s Singles’ Day goals, progress in improving platform efficiency, and how Alibaba’s ecosystem is working together.
This year’s biggest variable for Singles’ Day is the growing overlap between food delivery and e-commerce. Fan shared an example:
“One user told us that he opened the Taobao app at lunchtime to order food but noticed cat food at the bottom of the page. He ended up buying it before realizing that he was looking for his lunch.”
According to 36Kr, Taobao Shangou’s order mix has shifted in recent months. In August, tea drinks made up 22% of orders, retail 8%, and other food categories the remaining 70%. By October, both tea and meal orders had declined, while retail surpassed double digits. Seasonal factors explain part of the shift, but it also reflects a deliberate strategic adjustment.
At the launch, Alibaba said Taobao Shangou’s daily order volume has stabilized above 80 million. The company has also fine-tuned its merchant and delivery rider subsidies to improve efficiency. Since launching in June, daily orders have peaked at 120 million, driving a 20% year-on-year increase in Taobao’s daily active users. The Shangou business has reportedly helped 77 retail brands surpass RMB 10 million (USD 1.4 million) in monthly sales and 490 brands exceed RMB 1 million (USD 140,000).
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Collaborating across businesses
As Taobao Shangou broadens its retail offerings, consumer spending is becoming more flexible, driven not only by speed and price but also by richer experiences and greater product variety. This is the incremental growth Shangou is now targeting.
During a recent earnings call, Alibaba e-commerce head Jiang Fan said Taobao Shangou could reach RMB 1 trillion (USD 140 billion) in transaction volume within three years.
That goal depends on close coordination across Alibaba’s business units. Asked whether this could lead to internal competition, Jiang dismissed the concern. “We take a holistic view of coordination among Shangou and other businesses,” he said. “The goal is to fulfill every order accurately and on time. From a consumer or merchant perspective, if users want to meet multiple needs in one place, these business scenarios will naturally come together.”
He added that programs such as 88VIP help connect these efforts by allowing each business to grow within its own context while generating broader synergy across the platform. “That’s when one plus one becomes more than two, and it’s something we’re already seeing in practice,” he said.
Scale first, then efficiency
Unlike the surge-driven nature of traditional e-commerce during events like Singles’ Day, Shangou’s model prioritizes steady, sustainable growth across traffic, logistics, and supply. This demands increasingly precise operational management.
For its first Singles’ Day, Taobao Shangou is using a tried-and-true approach, offering 88VIP users two 50% off coupons per day. Beyond attracting users through discounts, the platform is also focused on improving operational efficiency as it scales.
At Alibaba’s August earnings briefing, Jiang noted: “You can’t discuss efficiency without scale. Our order volume used to be one-third that of competitors, and in many provinces our market share was below 20%. In that context, efficiency barely mattered.” He added that short-term improvements in losses came mainly from optimizing user structure, order structure, fulfillment efficiency, and cost management.
So how is Taobao Shangou putting that efficiency drive into action?
“Spending RMB 10 billion (USD 1.4 billion) won’t necessarily deliver ten times the impact of RMB 1 billion (USD 140 million). The goal is subsidy efficiency: making sure the right people get the right subsidies at the right moments,” Fan said. Shangou continues to refine its efficiency in user targeting and marketing operations, he added.
According to 36Kr, Taobao Shangou has launched a marketing and discount engine based on Taobao’s operational expertise. While maintaining consumer discounts, it restructured subsidies to reward higher-value orders, with extra benefits for 88VIP members.
On the structural side, the platform is adjusting category promotions to match evolving consumer demand. Large campaigns such as Singles’ Day create opportunities to expand retail order volume, while merchant order structures are being refined to better align with traffic through improvements in technology, logistics, and promotions.
Shangou rapidly scaled its delivery fleet amid China’s food delivery competition to ensure a consistent customer experience, but that expansion raised costs. The focus has now shifted to optimizing logistics through smarter order allocation and scheduling.
“I’m confident that once we make the experience better, it will naturally drive overall growth,” Fan said. “That’s why we’ve invested so heavily in building a comprehensive consumption platform.”
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Peng Qian for 36Kr.