Taobao’s price-for-quality Taobao Xinxuan opens second physical store in Shanghai

Taobao Xinxuan (or directly translated as Taobao Selected, 淘宝心选), is scheduled to open its second brick-a-mortar store in Shanghai today, June 28. With a shop-size of 230 meter squares, the store took only 30 days to come to its current shape, from design to product display.

The Taobao Xinxuan channel and product line

Taobao Xinxuan is both an affiliate shopping channel and product line of Alibaba’s own Taobao. With entry embedded in Taobao, it offers affordable quality lifestyle and functional daily necessity goods including home fragrance, smart power sockets, underwear, and sonic-control toothbrush. An aluminum 26’’ rose gold suitcase, for example, is priced at RMB 404.9 now.

According to the official Xinxuan site, the business’ location is Jiaxing, in the same province as Alibaba’s national Hangzhou headquarters of Zhejiang. The location is very likely to be where Xinxuan’s major logistics infrastructure such as warehouses are.

Xinxuan’s first physical store was opened in Hangzhou 2 months ago. The geographical allocation would optimize cost control, and stay close to China’s Yangtze-Delta region, one of the most affluent areas of the country where light industries and trading businesses gather. After 2 hours of opening, according to local media, the store was almost emptied by eager consumers (in Chinese).

The first Taobao Xinxuan brick-a-mortar store. Image Credit: Zheshang Magazine (Magazine of Zhejiang Enterprises) on ifeng.com’s finance channel

In addition to China-made products, the Xinxuan store (both online and offline) offers products imported from regions including Japan and North Europe.

Serving needs or combating rivals?

Ironically, backed by China’s e-commerce market leader Alibaba, Taobao Xinxuan is not the first of its kind in China. NetEase Yanxuan (directly translated as NetEase Selected, 网易严选), launched in 2016, is one of the earliest pioneers in the affordable quality product segment in China. Yesterday, during the 1st anniversary of Taobao Xinxuan and its press conference, the Alibaba business’ model was available to the public for the first time.

Tabao Xinxuan says the past year was an internal alpha test (内测). Both the Taobao Xinxuan and NetEase Yanxuan businesses hope by directly connecting with OEMs and ODMs, they can acquire key resources in the design, manufacturing, channel, and consumer segments to create alternative market supplies, and to upgrade consumers’ available shopping options while also offering reasonably priced goods.

Taobao Xinxuan can also be seen as a natural expansion of Alibaba’s power in e-commerce big data and resource allocation. Market research that used to take a few months to complete can now be done in 10 minutes. As algorithms develop and Alibaba’s ecosystem consolidates, calculation of consumer profiles and market preferences are producing more detailed analyses and suggestions to new segments and divisions.

No business lives for rivals or concerns of rivalries. Businesses care for their own survival  more – most time, the stronger, the safer.