Taobao.com is the site that killed eBay China. Created in 2003 by the Alibaba group; Taobao received 450 million RMB in funding to become China’s top C2C, B2C platform. The general consensus is Taobao.com is the largest online retail giant in China.
The term “Tao Bao” literally means “to search for treasure”, and implies that no treasure will go unfound when using their website. From my personal experience this is very true. Before discovering Taobao.com I would often go to overcrowded malls looking for cell phones, computer equipment, parts for my motorbike, etc. I found on Taobao I could search and find all of these things, for a much lower price than what I’d find in stores (even after haggling the vendor for awhile).
It only took Taobao 2 years to become China’s number top retail site, beating the pants off eBay in the process; it covers 70% of China’s online shopping and more than 80% of C2C market share in 2007; almost monopolizing China’s shopping website market. Total trade volume for 2007 alone was 43.3 billion RMB.
Statistically, it ranks as the 5th most visited site in China, and the 37th most visited site in the world by Alexa; its daily IP is around 8,748,000; daily PV is around 151,427,880.
Primary Onsite Interactions.
Taobao is basically eBay without the auction aspect. It’s a highly humanized platform for Chinese netizens selling and purchasing pretty much any good you can imagine online, both real and virtual. Users talk directly to each other via Aliwangwang (an instant messenger service created just for Taobao), can rate and recommend vendors, and participate in forums where they discuss creating stores, buying/selling, fake goods, gossip, etc.
Aliwangwang Instant Messenger; Dumb name, Awesome results.
Who uses Taobao.com?
As you’d expect, Taobao caters to the bargain hunting crowd. Most users are teenagers, college students, or 20-35 white collars workers in big cities. Since the internet is so easy to access, these users browse low priced fashionable products in their spare time.
Fashionable, cheap and convenient are the 3 major benefits to Taobao consumers. Since they do not earn a high salary, but do have leisure time, these users prefer to compare products carefully, they gather a lot of information, and select what they buy only after spending a period of time weighing options. They don’t care if the products are real or fake, and accept second-hand goods with a lower price (and tolerating the inevitable lower durability).
Who Advertises on Taobao.com?
Almost all ads on Taobao are from Taobao store owners, click any random ad and you’ll be taken to the Taobao mall, where the advertisers store is located. Other often seen ads are for E-bank payment platforms, such as Alipay, a third party for online payment, which incidentally is owned by the Alibaba Group, which owns Taobao.
Taobao’s “Mall”; User generated stores.
Taobao vs. eBay; the Aftermath.
Ebay is the only western counterpart that compares to Taobao. Although Ebay has local site in China too, its inability to adapt to Chinese local needs led to its failure, and now exists as a business portal, rather then the C2C powerhouse it is overseas. Taobao has local based competition, but nothing really comes close to Taobao’s market position.
Local Competition:
Local competitors cannot take Taobao on head-to-head, so have instead decided to perform better in niche areas.
Paipai.com (means “auction auction” in Chinese) shares a great similarity with Taobao. It is the second largest E-commercial platform in China, and supports China’s most widely used instant messaging tool: QQ. This gives Paipai immediate reach with QQ’s already established user base, by directly integrating into QQ’s interface when loaded.
Another similar site is Eachnet.com, a joint venture by Ebay and tom.com. This is Ebay’s real shopping platform in China. However, having no instant messaging support, falls behind in the online retail wars.
Other somewhat interesting, but ultimately not as popular or useful are barter exchange sites where users can exchange free goods. Huanke.com, Ewuqu.com, Huala.com are the top sites for this interaction. These sites grew in popularity due to users interest in having fun online, but since they aren’t the place you’d go to get anything meaningful, they predictably fell to the online retail wayside.
Personal Experience with Taobao.com.
This experience is from BA360’s local intern, Veronica:
“I’ve been running a small virtual store for 3 years, selling some lay-aside or second hand stuffs. Things were smooth and not too bad if you don’t aim at making huge money. It’s pretty safe for me so far, user-friendly, except there are always a lot annoying sellers promoting products to me.
I was once quite keen on online shopping in Taobao, as a newcomer to the website and a college student lacking of money and kept in countryside university town… What could I do? Do what all the others were doing. For college students, especially girls, shopping in Taobao, or just online are more popular than you imagine.
But as I stop being naïve to believe that the cheap price stands for also good qualities, I barely get touched by its attractive ad pages now. Except that I still shop good quality skin care products or clothes at reasonable prices, and that I sell good stuffs, like good books, at lovely prices as a sweet seller. Generally speaking, Taobao is getting far and far away from my standard with its suspect so-called real genuine goods.”
Problems with Taobao.com.
Taobao’s largest weakness is fake goods and scam artists/deceptive sellers. By introducing a comments and scoring system, Taobao increased protection for both buyers and sellers; however, as you can guess, this just led to fake comments and fake scoring to artificially increase certain buyers or sellers credibility stats.
Product pages; Can you spot the fake goods?
To address this issue, Taobao opened mall.taobao.com. There select sellers have official authority to sell certain brands, or the sellers virtual stores are actually the versions of a real-world shop. Taobao lifted its image a bit through this Mall, but as you can imagine, it didn’t offer the fun and variety of the original selling method.
A quick glance at Taobao’s forum section is instructive. We see headlines like: “Taobao Has Big Security + Hidden Dangers; Report mechanism highly defective! ”; “How to tell fake or real from a store’s introduction and pictures.”; “Cheat 110,000 RMB gold bar through Alipay.”; “Teach you how to tell fake Converse.”
General Comments from Chinese Netizens.
A Taobao seller praised:
“Taobao—create online consumption, guide new market
This is my comment on Taobao and also my impression of it since I opened my store here. It can be considered as Taobao’s culture or even its cooperate philosophy. Creating online consumption is the 1st strength of Taobao.
Through wholly free strategy, it beats down other websites that are reluctant in providing services. Taobao is so nice, so powerful. As a businessman, as a Chinese, I really adore it. Taobao, brilliant! However, even so, I think we still know that Taobao does earn money. It’s market economy after all, and there is no free meal. I hope Taobao can persist in its wholly free strategy, exchange high ad income and huge capital flow with extremely high click rate. Wish it good, support it and thank it. It has the strength other companies don’t, that is Taobao—create online consumption, guide new market; seize consumption, seize new market and the future!”
Please check out our Taobao Mall Marketing Partner Program
Professional Chinese and Website Localization Services
