China's biggest e-commerce platform Taobao has set up a branch in Taiwan. Some legislators argued that, the Alibaba Group, the conglomerate behind Taobao, has adopted the same business model as the Singapore-based Shopee to set up its branch in Taiwan. In response, the Investment Commission said they will investigate and if it is backed by Chinese capital, they will demand the company to withdraw its investment.
Taobao Taiwan officially began operation on Wednesday. It's been advertising its 7-day return and exchange policy. The new e-commerce platform offers close to 20 million items produced in Taiwan and abroad.
The website is in traditional Chinese and the price tags are in New Taiwan Dollars. The local consumers can complete purchases with credit cards and pick up their deliveries at convenience stores near their homes.
Some legislators said that, the Alibaba Group, the conglomerate behind Taobao, has adopted the same business model as the Singapore-based Shopee to set up its branch in Taiwan. The legislator claimed that the business model allows the e-commerce platform to control the supply chain and the market, at the same time limiting the profit margin of vendors in Taiwan. This means that a company from China will have the ability to completely control the supply chain.
If Taobao controls the supply of all the products and selling rights, it is like same control that China has over Taiwan's tourism industry. We are calling on e-commerce professionals to beware of the situation.
The legislator presented records showing that the Alibaba Group has authorized Credaro, a company based in the U.K. to register in Taiwan. The company was set up in May, and it has a capital of only 1 U.S. dollar. Its registration showed that the company is administered by other businesses in U.K,'s overseas Cayman Islands, which implied that the company has been controlled by other board members.
We have begun investigating the data of Credaro. If it's supported by capital from China, we will handle the matter according to law.
The Investment Commission said that if its investigation reveals that Taobao Taiwan is backed by Chinese capital, the government will demand the company to withdraw its investment.