The proliferation of new digital villages, exemplified by Taobao villages, is profoundly influencing production, livelihoods, urban-rural relations, and overall life within contemporary Chinese villages and catalyzing the process of new urbanization. This study comprehensively examines the intricate interplay among Taobao village, mobile Internet, and the paradigm of new urbanization. It contends that a Taobao village stands as a quintessential emblem of new urbanization, with grassroots entrepreneurs actively engaging in both domestic and global production and consumption networks facilitated by information technologies. This engagement effectively transcends traditional spatial constraints, thereby reshaping the status, scale, and functionality of villages. Moreover, Taobao village emerges as a pragmatic solution to the lingering challenges of conventional urbanization, uniquely positioned to guide China's transition into the new stage of developmental and facilitate its rural revitalization strategy. Furthermore, employing panel data on 31 provinces and cities from 2013 to 2021, this study systematically investigates the through which Taobao villages influence the trajectory of new urbanization. The results reveal that Taobao villages directly and substantially help elevate urbanization levels. Furthermore, mobile Internet penetration mediates this influence. Intriguingly, the influence of Taobao villages on urbanization exhibits conspicuous regional disparities and spatial diffusion patterns. As such, efforts to enhance integration, interaction, and complementary synergies among regional Taobao villages should be contingent upon the specific contextual nuances and local conditions.