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August 16, 2017

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Open sesame! Trio unlock Alibaba’s trove

EXPATS living in China often have a problem when it comes to shopping on the Alibaba platforms Taobao and Tmall, online marketplaces offering 800 million products. If they can’t read Chinese, they have to ask a local for help when ordering merchandise.

Until three American expats living in Shanghai who decided enough is enough. Two years ago, their frustration led Charlie Erickson, Jay Thornhill and Tyler McNew to create an e-commerce website called Baopals, which navigates Taobao and Tmall in English translation.

Baopals provides product descriptions, price and delivery information, customer comments and a channel for ordering goods — all in English.

Erickson, a high school teacher, Thornhill, a corporate English trainer, and McNew, a techie, started the company in a Shanghai apartment in late 2015. The website went live about 18 months ago.

The Baopals team said it is trying to build a bridge between Taobao and customers, not only those living in China but also those living overseas. Taobao and Tmall vendors benefit from the service because it expands their customer base.

They may not be a large market, when compared to China as a whole, but most expats living here have strong buying power. According to the latest data available, there are more than 600,000 foreign residents in China, and more than 170,000 of them have Shanghai residency permits.

“Expats have long been ignored when it comes to e-commerce or Internet-related services in China,” said a Baopals user who uses the site occasionally to buy home electronics. “Baopals is a small step forward, which is better than nothing at all.”

Baopals automatically collects information and the updates of the merchandise sold on Taobao and Tmall through an algorithm that collects the product details once users search a key word on Baopals. It also arranges merchandise into easy-to-find categories for customers navigating through the enormous inventory of products.

The website will be updated in about two months to include more social functions, according to Thornhill, who heads the company’s product development. He told Shanghai Daily that English-language users will be able to leave their own comments and recommendations about products they see on Alibaba sites.

Here’s how the system works. A customer finds a product on Baopals, then places an order and makes payment on Baopals, which accepts Alipay, WeChat Wallet and UnionPay.

The website charges a commission fee of 5 percent of the price of an ordered item, plus 8 yuan per item type. Baopals staffers then use their own Taobao accounts to communicate with and pay online vendors. The sellers handle delivery services to the buyers.

The idea of a bridge between Chinese Taobao and prospective English-language customers isn’t new, but in the past, purchasing agents for expats, like Cssbuy, Taobao Focus and Free Shopping China, functioned more as middlemen. They required customers to send a Taobao link to one of the concierge services online, which can be a tiresome process when digging through the massive amount of available options on Taobao.

Helping expats

To date, Baopals has handled more than 120,000 orders and nearly 600,000 items from 16,000 registered users, everything from alcohol and home furnishings, to kitchenware and clothing. Thornhill said there are no plans to introduce advertisers to the site, which turned to profit for the first time earlier this year.

The trio started the website with an initial investment of 400,000 yuan (US$58,823), taken from their personal savings and some financial help from friends. The Baopals team, which now numbers 26 full-time staff, moved into a new office last November.

In addition to handling the orders and processing requests for returns and refunds, staff members also provide shopping tips when they come across interesting items or sales on Taobao.

Erickson, head of business development for the company, said the most attractive side of Taobao, the world’s largest online marketplace, is its competitive prices and rich product variety.

“Many people don’t have a chance to access the products sold on Taobao,” he said. “We view Baopals as a place that helps build trust between customers and Taobao vendors, and also dispels the common misconception that products made in China are of low quality.”

The founders don’t hide their admiration for Alibaba founder Jack Ma.

“He has made it essentially possible for everybody to buy and sell online, and we’re hoping to help these sellers gain new customers and extend their presence overseas,” Erickson said.

About 43 percent of Baopals orders come from shoppers in Shanghai, 20 percent originate in Beijing and the rest flow from other parts of China.

Erickson likens browsing on Taobao to “going down the rabbit hole” in “Alice in Wonderland.” You just never know what kinds of weird and amazing stuff you will find there, he said.

Baopals founders are in tentative talks with venture capitalists, seeking investment to expand the site more quickly beyond China.

“We believe that action speaks louder than words,” Erickson said. “When we first came up with the idea, we didn’t know whether it would work or not. It was just an exciting concept that proved to be more successful than we imagined.”


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