Determined shoppers will always find their way around rules and regulations to find a bargain. Chinese e-commerce platform Taobao, owned by Alibaba (BABA) has certainly been one of the, probably unintended, winners of the Trump tariff tirade.
Cutting Out the Middleman
The site, which sells a variety of goods from sweets to drinks, lampshades, books and garden trowels, has raced to the top of Apple (AAPL) App Store’s free download charts in 16 countries. That, reports China Daily, is because of overseas consumers flocking to the online marketplace to buy products directly from Chinese suppliers during the period of tariff turmoil. Shares in Alibaba were up 2% in early trading.
This could be cost-effective given the 145% tariff hike on Chinese imports into the U.S. imposed by the Trump administration. The idea seems to be that by cutting out the middleman – the retailer – shoppers can secure their goods at a lower price.
According to China Daily, the overseas download volume of the Taobao app came to 326,000 on Tuesday, surging 222% compared to 104,000 downloads the previous Sunday.
The app is now among the top 10 of app downloads in 123 countries. Taobao’s downloads on Apple’s iOS platform in North America and Europe skyrocketed by 483% and 439% respectively, during the same time period.
It climbed to the second spot in the US Apple App Store on Wednesday and topped the download charts in France.
Chinese Suppliers on TikTok
It isn’t just Taobao benefiting. Chinese cross-border e-commerce app DHgate has secured the second spot on the free app download charts in the Apple App Store in the US, just behind OpenAI’s ChatGPT.
The surge in popularity is being helped, according to Bloomberg, by Chinese suppliers and manufacturers taking to TikTok to share videos aimed at showing foreigners the “source of good goods.”
Apparently, many of the videos claim that the handbags and clothes of high-end European brands are actually all sourced from Chinese manufacturers. So, again buying directly could save consumers money, although some experts are questioning the validity of these promises.
Is BABA a Good Stock to Buy Now?
On TipRanks, BABA has a Strong Buy consensus based on 16 Buy ratings. Its highest price target is £190. BABA stock’s consensus price target is $167.13 implying an 53.75% upside.
