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Alibaba to Launch 'Tao Factory' Service

Ebrun, 10/31/13

Chinese e-commerce conglomerate Alibaba Group has announced the mid-December launch of its "Tao Factory" ("Tao Gongchang") service, which will provide merchants on the company's C2C & B2C e-commerce site Taobao with access to manufacturing services from producers of items sold by international brand name fashion outlets such as ZARA and Louis Vuitton.

Alibaba will require manufacturers registering for the platform to provide free samples, price estimates, and production schedules to Taobao merchants looking to source product manufacturing. Taobao will also institute a minimum order quantity of 30 items, as well as a 7-day or less production deadline.

After Taobao merchants confirm receipt of delivery, producers will receive their payment in full. Alibaba's small and medium enterprise (SME) financing arm, Alibaba Financial, will assume the role of financial guarantor in the event of a Taobao merchant's sudden closure, and will pursue debts on behalf of producers.

Keywords: contract manufacturer e-commerce Taobao Internet B2C C2C

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