Guest column: Taobao in prime position to dominate China's C2C market for foreseeable future

http://www.interfax.cn/news/8624

Shanghai. March 12. INTERFAX-CHINA - It was recently revealed that the total trading volume on Taobao reached RMB 99.96 billion ($14.62 billion) in 2008, up 131 percent year-on-year, and that by the end of 2008, Taobao's number of registered users reached 98 million.

This is in part due to the rapid increase in Internet user numbers, especially among the young. According to a CNNIC (China Internet Network Information Center) report issued on Jan. 13, 2009, by the end of 2008, there were 298 million Internet users in China, up approximately 42 percent year-on-year. The Internet's penetration rate was 22.6 percent of the population, higher than the figure of 16 percent in 2007.

Meanwhile, a report by Analysys said that the total trading volume of China's C2C market reached RMB 30.45 billion ($4.45 billion) in the third quarter of 2008, and is expected to reach RMB 112.1 billion ($16.39 billion) for the whole of 2008, up 140 percent year-on-year.

Taobao's business model, under which sellers do not have to pay commission to the site, and its online trading security and trust system, is driving the rapid development of China's C2C industry. Online trading is likely to be even more popular during the economic downturn due to the lower costs involved.

Established in 2003, Taobao became the biggest C2C company in China, thanks to its model that does not charge sellers and its large-scale advertising. It remains the market leader today, with around 80 percent of the share of China's C2C market.

However, Jack Ma, CEO of Taobao, thinks this is still not enough, as many rivals such as Tencent's Paipai.com and Baidu's Youa are eager to wrest away market share from Taobao.

International C2C giant eBay, Taobao's long-term rival, has had an uneven development in China. It purchased C2C site Eachnet.com in 2003, which once occupied 90 percent of China's C2C market share. However, Eachnet was overtaken by Taobao in 2005. This led eBay to sell Eachnet to TOM Online in 2006.

However, eBay does not want to give up the huge market offered by China. It kept a low profile in 2008 [editor's note: although it still operates in China at eBay.cn], preparing for a new battle. Its opening of a new office in Foshan City in Guangdong Province at the end of the year may signal that it is about to launch its challenge against Taobao.

Taobao's aggressive stance, practical strategy, huge marketing investment and understanding of the Chinese consumer have paid off. However, the platform itself is the essence of a C2C business and the deciding factor in a company's longevity.

So, how do Taobao and eBay's services in China differ?

Platform: Taobao's product display platform and billing platform are very good. Users are first attracted to Taobao by its advertising and its business model, but it is the platform that keeps them loyal. Meanwhile, eBay.cn's display platform and billing platform are not well tailored to the habits of Chinese users. In addition, the slowness of its Web site and the fact that it charges users to sell items have made people reluctant to use eBay.cn.

Charging: Taobao is dedicated to its policy of not charging its sellers. In October 2008, Taobao announced it would invest RMB 5 billion ($731.05 million) in a five-year "Big Taobao" strategy. Through this, it aims to occupy a larger market share while maintaining its business model. Rather than charge sellers, it aims to make money by cooperating with other subsidiaries of its parent company, Alibaba.

It is an almost unbelievable amount to invest during an economic downturn, and demonstrates Taobao's confidence and determination to maintain its leading position. It is doubtful that eBay will be able to regain its market share in China if it persists in charging sellers.

Communication: With regards to instant messaging tools, Taobao's free AliWangWang is more attractive compared to eBay's use of Skype, which charges for some services. AliWangWang's video and screen capture functions and mobile phone integration are better and more convenient than Skype's audio and video functions.

Customer service: Taobao has a dedicated customer service department, which offers all-day all-year non-stop phone and online services to solve sellers' and buyers' problems. In contrast, eBay.cn does not have an independent customer service department, although it has a hotline. However, it is more likely to leave its users to solve any problems by themselves.

Taobao has an online message-leaving system, which allows user to ask questions and complain directly and wait for a response from a member of Taobao's staff, while eBay answers customer queries via e-mail.

Security: Taobao has formed a trading security team made up of 50 members of staff to combat online fraud, whereas eBay educates people on safe trading practices through a security center page.

Consumer rights protection: This is a big factor that differentiates Taobao's from other C2C providers. Taobao offers compensation to people who make purchases through the Alipay payment service. If defective purchases are reported within 14 days, Taobao will ask the seller to compensate the buyer. If the seller refuses, Taobao itself will compensate the buyer. This is really impressive.

Complaints: On the upper right corner of all Taobao's pages there is a button that people can click on to complain about a particular listing, whereas eBay relies on e-mails and telephone calls to handle complaints.

So we can see that eBay still has a long way to go if it is to revive its prospects in China's C2C market. Taobao is not a sleeping giant. Rather, it is aware of the need to stay on its toes.

The above is a personal opinion piece by the author. Its publication in no way implies that Interfax shares the views expressed in the article.

About the author: Liao Jiannian has worked in the IT marketing department of several global companies including Cascade Corp. and Simon Electric (China) Co. Ltd. He is also the creator, partner and PR supervisor for several Web sites and forums. His blog is located at http://blog.sina.com.cn/shian

How Taobao beats eBay in China

http://www.thomascrampton.com/china/taobao-china-ecommerce/
Alibaba Group’s Taobao platform was a latecomer to consumer-focused e-commerce in China, yet has managed to dominate the sector.
When questioned how he could possibly beat eBay, Alibaba’s Jack Ma memorably said: “eBay may be a shark in the ocean, but I am a crocodile in the Yangtze River. If we fight in the ocean, we lose—but if we fight in the river, we win.”
These are excerpts from an excellent report released this week by research and consultancy firm BDA looking at China’s e-commerce and Taobao’s success.
Taobao is now so big, that it has become a proxy for the entire e-commerce sector in China.
That was not always the case. Bo Shao, whose company eBay bought to expand into China, Eachnet, explains that eBay’s mistake was migrating Eachnet users onto a common US-based eBay platform.
The day of the migration, eBay China’s traffic dropped by half and the local team lost the ability to adapt to fast-changing China market.
“It took nine months to implement any major changes and nine weeks to even change a word on the website as everything had to go through the headquarters technology development team,” said Shao, in an article posted on the Taobao parent company website.
Chinese e-commerce heading to a scale of US
By mid-year 2009 China had an estimated Internet population of 338 million. Today almost one third of Internet users, or 105 million according to iResearch, are engaged in online shopping. This number is set to almost double by 2011. Sales generated from these shoppers are set to grow rapidly. iResearch forecasts the market to grow from RMB 190 billion (USD 28 billion) in 2009 to over RMB 400 billion (USD 60 billion) in 2011. By comparison the consumer e-commerce market in the US in 2008 totaled USD 178 billion.
More than 40% of all Chinese Internet users are registered on Taobao
Taobao’s massive lead is reflected in the number of goods offered on its site – over 200 million vs. less than 20 million items from its rivals. Mid 2009, Taobao claimed 143 million registered users or 43% of the Internet population, although a more useful datapoint is the number of active users – 30% of the total, or c. 47 million – which Taobao defines as those purchasing on their site at least once within the last six months. By comparison, eBay recorded 86.3 million active users worldwide at year end 2008.
Taobao’s top 10 products are thus a good proxy for China’s e-commerce market
there is a range of specific factors driving online sales. “China-specific” features need to be considered, which explain why some categories online thrive in China but not in the US or other developed markets.
For mobile phones, the availability of smuggled (for example iPhones with WiFi functionality not available locally, or “shanzhai” ‘bandit’ phones) or 2nd hand handsets drives sales on Taobao, which claims 10% of all handsets sold in China this year. For cosmetics, cutting out the cost of a physical retailer makes online goods substantially cheaper than offline. For apparel, consumers may choose to buy (knowingly) fake goods of decent enough quality, widely available in China given its massive manufacturing output, or look for niche clothing such as baby clothes not easily available in their local stores, especially in Tier 2 or Tier 3 cities.
In addition to Taobao and other general contenders, niche sites are exploiting growth in the above listed areas as well as other promising categories including health products, housing-related products and services (ranging from home improvement to apartment rentals) and food/dining related services.
Business model of Taobao vs eBay
In the case of eBay in the US transaction commissions represent c. 90% of the revenues of the company (USD 4.7 billion in 2008) with other items such as hosting fees or advertisements the remaining 10%.
In China, eBay had built a presence since 2002 through its investment and absorption of Eachnet. Taobao was a relative latecomer to the market – founded by Alibaba in 2003 – yet succeeded in rapidly taking on, and humiliating, eBay in this market by adopting a ‘free of charge’ strategy to compete with Eachnet’s listing fee model. How then to make money?
The answer is advertising. Taobao’s traffic makes it (according to Alexa.com) already the 5th largest website in China behind Baidu, QQ (Tencent), Sina and Google’s Chinese site. Over 80% of Taobao’s c. USD 300 million estimated 2009 revenues came from advertising, mostly ‘pay for performance’ ads as well as ‘pay for transaction’ and brand advertisements. The remaining 20% of revenues were generated between commissions that Taobao charges on its new (launched in 2008) Taobao Mall – a B2C area within its C2C platform – and value added services for merchants. Of course not (yet) charging transaction fees means that the “take rate” of Alibaba – the revenue generated for the company vs. the GMV – is only c. 1% vs 7.9% in the case of eBay, but this also explains the rapid increases in the GMV and the barriers for other contenders to take on Taobao.

CRT Extra: More on New Taobao “Mall” Site

http://blogs.wsj.com/chinarealtime/2010/11/02/crt-extra-more-on-new-taobao-mall-site/
A plan to re-brand and expand the business-to-consumer platform of Alibaba Group’s online retail platform Taobao.com could lead to higher profits for the company (see yesterday’s story in The Wall Street Journal here ).

Tmall.com

Taobao is re-branding its B2C platform Taobao Mall, giving it an independent web address, Tmall.com, and spending $30 million in an advertising campaign to attract more users. The move is meant to differentiate listings by Taobao Mall merchants, who are either brand owners or authorized distributors, from Taobao.com’s consumer-to-consumer, or C2C, merchants, who are mostly individuals or small to medium sized businesses that don’t have to go through the same verification process to open a store on Taobao’s platforms.
Daniel Zhang, Taobao’s CFO, said at a press conference on Monday that the company intends to launch more sales categories, such as a category for groceries, and to create unique features for each category, like a price guarantee for air tickets.
Taobao Mall currently has more than 20,000 merchants who sell products from more than 30,000 brands, Zhang said.
Expanding the Taobao Mall product could translate to higher profits for Taobao, which charges fees to B2C merchants for listings while allowing C2C merchants to list products for free (revenue on C2C listings comes from advertising and additional services value added services–see below). Taobao’s free listings have made it difficult for other companies including eBay to compete in the Chinese C2C market.
With Taobao Mall expanding rapidly (the company expects to quadruple its transaction value this year), Zhang said fees will be one of four main sources of income for the company going forward. The others: Keyword advertisements so merchants can advertise their listing when users search for related products, other types of advertising, and value-added services such as aiding merchants with warehousing and other logistics issues.
So far, Adidas, Lenovo, Uniqlo, and Procter and Gamble products are all sold in Taobao Mall.
Zhang reiterated that the company has no plans for an initial public offering, and told reporters during an interview that the new plans for Taobao Mall are not an indication of any plans for a listing.
– Loretta Chao. Follow her on Twitter @lorettac

http://lz.taobao.com data manangement tool

How has Taobao.com grown so rapidly?

By TONY JIN
Published: January 29, 2008 01:00 AM

 

source from: http://thechinaperspective.com/articles/howhastaobaocomgrownsorapidly3539/index.html

 

Turnover at Taobao.com grew 156% to US$5.98 billion last year, putting it ahead of all major retailers bar Bailian Group. Yang Guoqiang of the China Business News takes a look at the growth of China’s most popular online shop, and the challenges ahead

Can Taobao.com, China’s most popular online shop, outsell domestic retailers like Bailian Group and global giants like Wal-Mart, or even the entire traditional merchandising sector? We do not have an answer. But one thing for certain is that Taobao needs to improve its quality control and logistics systems and build its credibility.

According to Taobao, online throughput rocketed 156% last year to US$5.98 billion (RMB43.3 billion), putting it ahead of domestic competitors VanGuard (RMB37.9 billion in turnover) and Dashang Group (RMB36.1 billion) and its biggest foreign competitor, Carefour (RMB24.8 billion). Its turnover was second only to Bailian Group’s RMB77.1 billion.

Taobao’s rapid success began just five years ago, since when its sales have expanded at least 100% a year, well above the 15% increase in sales throughout China’s retail sector and the 40% annual gain posted by large retailers in China. Taobao estimates that China’s online spending totaled US$8.16 billion (RMB59 billion) last year.

According to Taobao, the company took just five years to reach a point (RMB40 billion in turnover) that took Wal-Mart 29 years. However, Yu Yang, the president of Analysys, a leading Internet-focused business consultancy, disagreed with Taobao’s 4-versus-29 claim, claiming the trend towards online shopping made comparison with a store-based retailer meaningless.

“They are doing business with two totally different modes,” he said. “Wal-Mart does all the things itself, including sourcing and distributing. It even has its own plants. But Taobao is just a distributor.

“From a market perspective, Taobao’s turnover is collective while Wal-Mart’s is individual,” he added. “Wal-Mart represents the highest level of the retail sector whereas Taobao represents the newly emerging online shopping sector.”

Taobao is, however, still stacking up well with store-based retailers, as a comparison with cosmetics giant Avon shows. Avon collected RMB1.7 billion in revenues last year from its 7,000-plus stores across China, far lower than Taobao’s RMB2.6 billion collected from cosmetics.

Taobao’s revenue from nursery products surged 361.5% year-on-year to RMB1.2 billion in 2007; revenue from SIM card and recharge card sales surged 427.7% to RMB1.76 billion; revenue from clothing surged 970% to RMB5.78 billion, more than the revenues from clothing sales in all shopping malls in Beijing combined.

Taobao.com is also becoming increasingly attractive to the white collar community. Statistics show nearly nine million people visit the website everyday. Super centers in China, like those owned by Wal-Mart and Carefour have 15,000 visitors on average everyday, meaning it takes 600 large supermarkets to match the number of visitors to Taobao.com. At the end of 2006, there were just 600 large foreign-owned retailers in China.

The red hot website had 53 million registered users as at the end of 2007, up 76.7% on 2006, 24.4 percentage points higher than the 53.3% increase last year in China’s online population.

However, for e-commerce, creditability, logistics, security and tax collection remain a problem. Beijing introduced a rule on May 30 2007 requiring vendors to have a license in order to sell their merchandises online. But the rule only applies to small and medium sized firms and is not applicable to big websites like Taobao and eBay.

Taobao is currently diversifying its revenue sources as it looks to stop charging customer-to-customer sellers transaction fees. Much like its rival Sina.com, Taobao is looking to sell advertising space to name brands, and it also plans to sell advertising space on the right column of its search page, in imitation of Google shopping.

It also plans to offer a range of value-added services to help sellers. “If you do business yourself you can earn 100 dollars,” Taobao president Lu Zhaoxi said. “With the help of Taobao’s vast platform and network, you can earn 1,000 dollars. I’m sure you are willing to give me 20 to 30 dollars out of the extra 900 dollars, aren’t you?”
Lu said some of Taobao’s big private vendors had become fully-fledged businesses so were shifting from a customer-to-customer model to a business-to-customer model, and some name brand companies were also looking to sell their goods online. Taobao will broaden its revenue sources and emerge as a platform offering both customer-to-customer and business-to-customer services, he said.

This article originally appeared in Chinese in the China Business News on January 25, 2008. The China Perspective takes no responsibility for the accuracy of the original article

"taobaowangwang" taobao management app. for IPHONE

Newly released "taobao wangwang" for IPHONE

a taobao management tool

including customer chatting list

shop decoration

 products management....

COMPARE WITH A WEB VERSION:

taobao's trying center

                            Here's Taobao trying center : http://try.taobao.com/index.htm

register on the website to get P&G samples

it can also be.....

           

"taobao tianxia" a taobao magazine..

Fashion leader and consumer nevigator

Introducing nice stuff on taobao

interaction between taobao and its clients

Sales information

another way of offline promotion

Jack Ma, Founder, Chairman & CEO, Alibaba Group and Chairman Yahoo China

BDA - China's "me-commerce" revolution

Got first diamond for my shop!---

Finally!
My selling credit surpassed my buying credit....

I used to be an online shopaholic....

Work hard to get two diamonds, three..four...five.. heading for the crown!

more information about seller grading

please find at

http://rate.taobao.com/user-rate-2d7278ea0aeb0f3cac3436f0d36446ff.htm

"tianxia taobao " a TV program sponsored by alibaba.com

《天下淘宝》是一档由阿里巴巴集团联合淘宝天下周刊、浙江电视台影视娱乐频道共同打造的大型娱乐周播节目，时长45分钟，将于2010年1月开始，在每周日晚8：30的黄金时间重磅推出。 《天下淘宝》力求时尚、清新、实用的节目风格，引领睿智生活。来自全国各地的淘宝达人和资深娱乐媒体人强强联手，各自带领自己的亲友团进行游戏PK。在节目中，嘉宾将分成两个阵营，通过对指定的淘宝商城提供的网货产品进行猜价格、猜商品性能、比搭配等3个环节的对垒，最终胜出的一队将获得丰厚奖品。
与此同时，《21点疯狂大秒杀》和《淘课堂》将成为节目中最具看点和卖点的两大元素，引发收视狂潮！
"Tianxia Taobao" is an Entertaining TV progtram sponsored by alibaba.com associated with "Taobao tianxia weekly"(a megazine published by taobao.com) and Zhejiang TV entertaining Channel. Started from Jan. 2010, It shows every Sunday evening.
"Tianxia taobao" aims to be modern and practical. Talented Taobao sellers and buyers are invited to compete in the games such as price guessing,function guessing. They are divided into two groups. The winner gets big prize of product from Taobao.com. Moreover, two most attractive sections are "21 o'clock second killing" and "taobao class".

My Comments:

This is not only a TV program but also a great platform for taobao sellers to expose their products to the public, and buyers to exchange their shopping experiences. Since almost half of Chinese net citizens are taobao users, this program does draw a lot of eyeballs.
As the sponsor, taobao.com earns more popularity among the audience, and brings in a great income from taobao sellers who appear in the program.And the greatest benefit is that they turns million audience into potential taobao users.

Here's link for a new episode of "tian xia taobao"   http://www.tmall.com/go/act/integrated/tbtx.php?ad_id=&am_id=1300208262d27d5f2df6&cm_id=&pm_id=

Taobao invests RMB10m to boost app store

By: Adaline Lau, China – Beijing
Published: Jan 18, 2010
http://www.marketing-interactive.com/news/17313

Here's the link of  online Taobao Application store: http://fuwu.taobao.com/service/search.htm?target_user=1

Beijing - Taobao, one of the largest online shopping portals in China, has launched a Taobao app store and committed RMB10 million to fund independent software developers on the platform.

The Taobao app store will offer tools for sellers and buyers, extensions for Taobao community sites, tools for product recommendation and mobile phone applications.

According to a Taobao representative, its app store mobile applications will be accessible on all types of handsets.

Sellers on Taobao will be able to use the applications to improve their business management and back end operations while buyers would be given tools to improve their shopping experience.

Wang Wenbin, vice president for Taobao Open Platform (TOP), said "The Taobao app store is a convenient channel for developers, investors and customers to interact directly and it will ultimately allow the market to evaluate the independent developers'
creations."

In October 2009, a TOP fund with an annual investment of RMB10 million was set up to encourage innovation among independent developers following a competition that saw more than 25 000 software developers participated.

The top three winners will receive a funding of RMB5 million while the other RMB5 million will be shared among the top 30 contestants whose first batch of applications are now available in the store.

Alibaba's Taobao.com To Boost Business-To-Consumer Business

By Loretta Chao

Of THE WALL STREET JOURNAL

BEIJING (Dow Jones)--Chinese e-commerce firm Alibaba Group Holding Ltd. is planning to expand its business-to-consumer online retail business, even as the burgeoning sector has grown increasingly competitive.

China's e-commerce market is expanding rapidly, with online transactions expected to grow to roughly 7% of China's massive retail market by 2013 from about 2% now, Hong Kong-based Deutsche Bank AG analyst Alan Hellawell said. Business-to-consumer transactions account for just a small portion of the overall market, but analysts said they expect that share to grow as shoppers increasingly look to buy goods online from brands and retailers they recognize.

As part of its efforts to expand its business-to-consumer business, the Hangzhou-based group's online retail company, Taobao.com, said Monday it separated the Taobao Mall business-to-consumer portal  http://www.tmall.com/ from its flagship consumer-to-consumer portal and gave it its own web address, Tmall.com.

Users could previously access Taobao Mall, on which vendors including Adidas AG, Fast Retailing Co.'s Uniqlo and Lenovo Group Ltd. sell goods to Chinese consumers, via Taobao.com.

Taobao.com Chief Financial Officer Daniel Zhang said Monday that Taobao Mall listings will still appear in Taobao.com search results, but the move is meant to differentiate the Taobao Mall brand and "give people a very clear idea that this is the first choice to find high-quality products."

He added he expects the value of transactions on Taobao Mall to grow 400% this year from last year, outpacing the growth of Taobao's consumer-to-consumer business. He declined to give a value for such transactions.

Taobao.com, which operates China's largest online retail website, has said it expects to double the value of consumer-to-consumer transactions conducted via its website to CNY400 billion ($59.9 billion) this year.

The separation of the two brands follows Taobao.com's appointment of Ye Peng, formerly chief operating officer of Chinese Internet search company Baidu Inc., as vice president overseeing Taobao Mall.

Research firm Analysys International said sales on Taobao.com accounted for 75% of all e-commerce transactions in China as of the second quarter. But while analysts said they expect Taobao.com to maintain its dominance in the overall market, they say Taobao's competition will intensify.

A number of competing business-to-consumer platforms have emerged in recent years, including 360buy.com, a website operated by Beijing Jingdong Century Trading Co. Amazon.com Inc. also operates a Chinese website, though both are much smaller than Taobao.com in terms of transaction value.

In addition, Baidu is working with Japan's Rakuten Inc. to launch an online shopping mall for Chinese Internet users, hoping to benefit from the search company's massive audience. The two companies plan to jointly invest $50 million in the site over the next three years, though a previous attempt by Baidu to enter the e-commerce market has yet to gain traction among Chinese users.

Taobao Mall will also face challenges from established, specialized websites for sales of goods such as air tickets, which the portal launched earlier this year.

For example, Ctrip.com International Ltd., China's largest online travel booking company, fills its own orders and has full control over its sales policies and service quality, while Taobao Mall, a platform for other merchants, doesn't actually fill orders.

Taobao Mall employs a number of measures to protect consumers, such as verifying the credentials of all of its Taobao Mall merchants and requiring that they all offer a seven-day, no-questions-asked refund policy. But service quality can still vary from merchant to merchant.

Taobao.com, which currently has 50 million daily unique visitors, said it will invest 200 million yuan over the next three months in a marketing campaign for Taobao Mall, including an ad campaign on state broadcaster China Central Television and an offline billboard campaign across major cities in China.

Alibaba Group, in which Yahoo Inc. owns a roughly 40% stake, is the parent of Hong Kong-listed business-to-business trading website Alibaba.com. (1688.HK).

-By Loretta Chao, The Wall Street Journal; 8610 8400 7799; loretta.chao@wsj.com
http://online.wsj.com/article/BT-CO-20101101-704939.html

Taobao launches Web search engine

(Agencies)
Updated: 2010-10-12 15:31
souce from: http://www.chinadaily.com.cn/bizchina/2010-10/12/content_11400559.htm


taobao's search engin: http://www.etao.com/

SHANGHAI - A unit of Alibaba Group, China's largest e-commerce firm, has launched a search engine, taking aim at a lucrative market now dominated by Wall Street darling Baidu Inc, Reuters reported on Oct 12.

Taobao.com, China's largest and most popular online e-commerce website with a consumer focus, launched its public beta test of the search site, called Etao, on Oct 9, a spokeswoman said on Oct 12.

"Etao is a shopping search engine launched by Taobao," she said in a statement, referring to the site's name.

Etao provides not only search options for e-commerce, but also a comprehensive search engine powered by Microsoft's Bing search engine.

The move is a direct challenge to reigning Chinese search leader Baidu, which dominates more than 60 percent of the Chinese search market by advertising revenue.

"Advertising to people who have come already to buy something is a very attractive proposition," Mark Natkin, director of consulting firm Marbridge Consulting, said of Etao.

"It (Etao) has the potential to pull a very valuable segment of users, by intention, from Baidu," Natkin said.

Alibaba Group is about 40 percent owned by Yahoo Inc.

China's Internet search market is currently controlled by Baidu and Google, which collectively have about 90 percent of the market.

But Google's share has been slipping since its high profile threat to leave China earlier this year. Chinese Internet firms are jostling with each other to eat into Google's share and compete against Baidu.

In August, Sohu, China's No 2 Internet portal said it will sell 32 percent of its Sogou search engine to investors that include Alibaba Group.

"There's always the potential for a threat to Baidu, but they (Taobao) are still in the early stages," said an analyst with an investment bank who is not authorized to speak with media.

"It may take them at least another three to four years to build up their technology."

Microsoft has been aggressively pushing Bing in China. The firm told the Wall Street Journal in September it is looking for a partner there to help the company play a major role in China's Internet search market -- the world's largest with more than 400 million users

Taobao.com aims for overseas Net sales expansion

By Qian Yanfeng (China Daily)
Updated: 2010-10-27 11:23

http://www.chinadaily.com.cn/bizchina/2010-10/27/content_11464512.htm

SHANGHAI - China's largest online shopping platform, Taobao.com, said on Tuesday that it plans to expand into the European and American markets by launching a new shopping section at mall.taobao.com for cross-border online shopping at the beginning of next year, allowing Chinese e-consumers to shop beyond the Asian markets.

Chinese Internet users can already buy products online from Japanese vendors, after Taobao's partnership with Yahoo Japan Corp in June launched two online platforms to allow vendors to sell in each other's markets, the first step in its overseas expansion strategy.

The new shopping section will allow European and American brand names to sell their products at mall.taobao.com.

"Following our entry into the Japanese market, we are now preparing to test the waters in the European and American markets. Discussions with European and American brand names are already under way," Lu Peng, vice-president of Strategic Business Development at Taobao, told China Daily on the sidelines at the Cross-Straits E-commerce Conference 2010.

"Chinese consumers have a huge demand and growing purchasing power for overseas products, which spells great potential for cross-border e-commerce, and we think Taobao can play a major role in that," he said.

When launched, the new integrated platform will provide Chinese e-consumers with access to products from several countries, including the United States, Great Britain and Germany, he said.

The company's partnership with Yahoo Japan has also been faring well, said Lu, but he refused to reveal transaction volumes for the platform, which provides users from the two countries with 8 million Japanese and 50 million Chinese product listings.

Lu said the platform would need to upgrade its business-to-consumer (B2C) model by cooperating with bigger and more competitive Japanese companies, instead of small and medium-sized individual shops, to both raise efficiency and provide a wholesale service to Chinese consumers.

The same problem exists in its partnership with Taiwan-based eDynamics, whose B2C e-commerce subsidiary, oBuy, opened a store on Taobao in 2006.

"But with the signing of the Economic Cooperation Framework Agreement (ECFA) between the mainland and Taiwan earlier this year, cross-Straits cooperation in the e-commerce sector is expected to grow more rapidly," said Lu.

Taobao, a subsidiary of the Chinese online giant Alibaba Group, is China's top e-commerce player, taking 80 percent of the country's online shopping market.

Its move to expand into the overseas market is also intended to attract Chinese consumers, who usually turn to foreign procurement service providers when shopping for non-Asian products, and help regulate the market, he said.

Online shopping in China has boomed in recent years, as the nation's more than 400 million Internet users - the world's biggest online population - become increasingly Internet-savvy.

According to the China Internet Network Information Center, the transaction volume in China's online shopping market reached 250 billion yuan ($37.52 billion) last year.

Taobao is establishing its own warehouses in 50 cities of China

淘宝欲在全国50城市自建仓储

2010-10-21 04:52:36　来源: 京华时报(北京)　
本报讯 (记者 李斌) 社会物流拖住淘宝后腿，淘宝决定自建以求突围。昨天，记者从接近淘宝网的一位可靠消息人士处获悉，淘宝网乃至整个阿里巴巴集团内部已经制定了计划决心自建物流，具体的运作是今明两年淘宝将在全国52个城市陆续建立分仓，以解决掣肘淘宝网发展的物流问题。同时，该人士透露阿里巴巴还将入股部分物流公司并与它们开展仓储方面的合作。不过，该消息人士强调，“淘宝还是不会把手伸到物流业前端去做配送，也不会抢物流公司的饭碗。”

 

据悉，目前淘宝网在北京、上海、成都已经建立了配送中心，还在全国20多个省市与物流公司合作组建了分仓。按照马云的想法，“希望在5-8年内，企业工厂里面最好不要有货，货直接配送到阿里在全中国20多个城市的仓库，通过信息平台的匹配，企业可以迅速把货送到用户手上。”
但是目前这些配送中心和分仓还远远无法满足整个淘宝的发展，多数快递公司的扩张速度已经难以与其匹配，进而导致服务品质下降。另一方面，居高不下的物流费用也在很大程度上制约了淘宝网的进一步发展，因此淘宝网不得不亲自涉足物流，所以有人指出阿里巴巴违背了当初许下“绝不做物流”的承诺。对此，在今年阿里巴巴的网商大会上，马云回应称“有的时候，你不去做解决不了问题。现在物流又碰上大问题了。”

Taobao is establishing its own network for delivery

阿里巴巴计划自建全国范围物流网络

2010-10-21 08:54:34　来源: 网易科技报道　

网易科技讯 10月21日消息，电子商务公司阿里巴巴集团正计划在全国范围内建立一个庞大的物流网络。该集团对目前国内递送服务的质量感到不满，同时希望在迅速增长的国内市场日益加剧的竞争中保持领先地位。
据来自该公司的消息人士透露，阿里巴巴创始人兼主席马云最近在内部战略会议上告诉管理层，未来两年，该集团将在全国52个城市建立分销中心。
据悉，此项物流服务主要是针对淘宝用户，但具体细节尚未公布。淘宝是阿里巴巴未上市的子公司，在中国消费电子商务市场上占有压倒性地位。
据德意志银行分析师阿伦·赫拉维尔表示，淘宝的C2C及B2C平台，市场份额总计达到83.8%。
在淘宝上的购买已占到国内快递公司每日送货量的70%以上；这已经导致了分销与送货的延误以及质量参差不齐，因为国内物流公司没有能力应对电子商务的迅速增长。
面对这一趋势，美国包裹递送公司——联合包裹(UPS)已计划在中国建立国内递送服务。
阿里巴巴集团旗下的淘宝网，也正面临着新的竞争。搜索引擎百度本周与日本最大网上购物商城运营商乐天市场携手推出了一个网上商城网站。

此外，越来越多的外国零售商也开始在中国建立自己的网上购物商城。阿迪达斯选择了在淘宝开设店面，而日本服饰零售商优衣库去年在中国推出了自己的网上商店，其竞争对手Gap将于下月跟进。世界最大零售商沃尔玛也正准备在中国推出自己的电子商务网站。

Shops and shopkeepers On tabao

source from http://asia.cnet.com/blogs/sinobytes/post.htm?id=63013693

Navigating the bamboo scaffolding of China's rapid-rising tower of technology by Steven Millward,China

Similarly to eBay, there's an emphasis on shopkeepers being rated by buyers to display who can, and can't, be trusted. The same, too, for buyers. In the screenshot to the right, you can see one shopkeeper's stats, displayed on its shop home screen. After every transaction, both parties can optionally rate each other; but it has become polite to give a good rating where one is due. The more "crowns" and "hearts", the better

Text reviews can also be posted under every product. Interestingly, running a Taobao shop has become a national pastime, with even office workers on a good salary running shops, chatting online with potential customers--perhaps even during office hours--and sorting out the mailing of items in the evenings and on weekends. University students, too, provided they have a laptop, have taken to being sellers to give themselves a bit of an income during the semester. Setting up a Taobao shop requires no fees be paid to the site. So it's just a matter of sourcing for some products from a wholesaler--an easy thing to find and do in China, which is the "world's factory" after all--for a fairly small outlay. And then you'll hopefully be able to sell the goods at a competitive price which slightly undercuts the bricks-and-mortar stores with their huge overheads.

Using taobao

source from :http://asia.cnet.com/blogs/sinobytes/post.htm?id=63013693

Navigating the bamboo scaffolding of China's rapid-rising tower of technology by Steven Millward, China


The 10 main tabs across the Taobao front page reveal the core sections of the site, which include "mall", "global", "second-hand", and "plane tickets". Much of what is sold, however, are brand-new products from its legion of hobbyist shopkeepers.

The search box is prominent just above the tabs and allows you to search across the site or within certain categories. Upon searching for anything, you get a list with thumbnails and descriptions, from a variety of sellers across the country. It doesn't really matter where the seller is, as regular- and express-mail options cover the country.

Taobao's payment method is Alipay, created by its parent company Alibaba, the business-to-business e-commerce site which also runs Yahoo's China operations. Alipay has been vital to their victory over eBay and its unfamiliar Paypal. For regular users, Alipay (Chinese name: 支付宝--Zhīfùbǎo) is the payment method and safety intermediary. It accepts payment on a wide variety of bank-issued debit cards and Visa.

The buyer first pays money--using an Internet shopping-enabled bank card--to Alipay, which then holds the money until the buyer has received the goods. If satisfied with the items, the buyer logs back into Taobao, and with a few clicks, can allow Alipay to pass on the payment to the seller. This eliminates the possibility of card fraud and items that don't get sent. Though for the shopkeepers, there's still the possibility of some wantonly dishonest customers damaging the goods themselves and sending them back.

Taobao to launch customised mobile phones in 2010

By Aaron Back, Dow Jones Newswires Monday 14 December 2009

Handsets to come with applications enabling consumers to shop, shopkeepers to manage online stores.

Chinese online retailer Taobao.com will release three customized mobile phones early next year, in partnership with Lenovo Group Ltd., China Telecom Corp. and TCL Corp., a person with knowledge of the matter said Monday. The phones will come with applications allowing customers to shop and pay for goods, and shopkeepers to manage their online stores, said the person, who declined to be named. Taobao, based in Hangzhou, Zhejiang province, may be hoping to emulate the success of eBay Inc. in the U.S. in moving online shopping to mobile platforms. Following the launch of a popular application for Apple Inc.'s iPhone, eBay said last month customers will buy more than $500 million in merchandise on its site with mobile phones this year. Computer-maker Lenovo Group confirmed its partnership with Taobao, saying in a statement the Taobao-branded phone will come equipped with software allowing customers to shop on the e-commerce site. The Taobao phone released with China Telecom will run on the carrier's third-generation mobile network, said the person with knowledge of the matter. Taobao has also just released a downloadable application for other mobile devices, including the iPhone and devices that run on Microsoft Corp.'s Windows Mobile. Taobao is China's dominant e-commerce site, where individuals can buy goods from one another and directly from major retailers. Taobao parent company Alibaba Group is also the parent company of Hong Kong-listed business platform Alibaba.com Ltd. In the first half of the year, Taobao handled CNY80.9 billion ($11.8 billion) worth of transactions, nearly double the year-earlier figure. Last month, Lenovo said it plans to buy back its mobile phone unit for $200 million in cash and shares, signaling its intent to get more involved in China's burgeoning mobile Internet market. The company had sold off the unit in 2008 for $100 million to focus on its personal-computer business. China Telecom spokesman Jacky Yung said he wasn't aware of any collaboration with Taobao. TCL wasn't immediately available for comment.

By Aaron Back, Dow Jones Newswires Monday 14 December 2009

shop management software on the phone.

Taobao Launches New Taobao App Store

source from: http://news.alibaba.com/article/detail/alibaba/100237896-1-taobao-launches-new-taobao-app.html

Company invests RMB10 million in top 30 applications

BEIJING, January 15, 2010 -- Taobao, the largest online shopping destination in China, has launched the Taobao App Store and will invest RMB10 million (US$1.46 million[1]) to foster promising independent software developers via the Taobao Open Platform (TOP) fund every year.  The Taobao App Store (http://app.taobao.com) will offer solutions created by independent developers through TOP for Taobao merchants and consumers.  The first batch of applications available in the store is the top 30 applications identified through the “Win at Taobao” competition held by TOP.

“With an increasing number of third-party developers registering and the emergence of exceptional software on TOP, the Taobao App Store will serve as an incubator of innovative technology for Taobao users,” says Wang Wenbin, vice president of Taobao Open Platform. “The Taobao App Store is a convenient channel for developers, investors and customers to interact directly and it will ultimately allow the market to evaluate the independent developers’ creations.”

The Taobao App Store will offer products across a range of categories to meet the needs of all Taobao users, including tools for sellers and buyers; extensions for Taobao community sites; tools for product recommendation; and mobile phone applications.  For Taobao sellers, the applications will aim to improve their business management and back-end operation functionality while buyers will be offered tools to improve their shopping experience.  Software developers will be able to generate revenue from their applications through subscription fees, commissions or advertising, depending on the type of service offered and popularity of the product.

Established in October 2009, the TOP fund will make an annual investment of RMB10 million to foster and encourage innovation in online application development among independent developers.  The TOP fund aims to incentivize independent developers to create original and novel tools for Taobao users and support their growth on TOP.  The TOP fund is jointly financed by Taobao, Alibaba Group and outside investors.  Several external parties including government entities in China and around the world, funds and investment companies have expressed interest in becoming potential investors.

The top three winners of the “Win at Taobao” competition, launched in September 2009, will receive investments from the TOP fund totaling RMB5 million (US$732,000).  Another RMB5 million of investments will be shared among the rest of the top 30 contestants.  As of December 31, 2009, more than 25,000 independent software developers have registered on TOP and more than 4,000 applications have been created using the application programming interface (API) provided on TOP.

Taobao FOCUS: Buy from China Taobao.com in English, Taobao agent

Buying on Taobao.com out of China is NOT REALLY A PROBLEM!
Taobao FOCUS: Buy from China Taobao.com in English, Taobao agent
TaobaoFOCUS.com is a website dedicated to shopping on Taobao.com in English.

"We help you buy all kinds of products offered at incredibly low price from China's biggest domestic online shopping website. We are your Taobao agent who can find, purchase, check and deliver the items from Taobao.com. Our offer includes sourcing, buying and international shipping from China."

Got first five hearts of my online shop...

yahooooooooooooooooo!

I registered my online shop on Taobao.com with my partner and started our business this July.
Started from selling cosmetics to my relatives and friends, We earned some credits. (on taobao.com, your shop gets credits by selling items and getting good grade.the credit goes from hearts to diamonds then crowns)
Some people came to ask about our products without buying anything,
and some people came to browse the pages without even asking.
Everything is going beyond our expectation.
However, by analyzing the data of the customers and browsed items, and using new online marketing tools, selling is improving and it shouldn't be someday far away to get a diamond!

Here's the link of my shop, http://2010-7-1.taobao.com/
Any suggestion will be appreciated.

Online Retailing's Next Frontier

Resource from:
Knowledge@Wharton, 06.16.10, 12:30 PM EDT
http://www.forbes.com/2010/06/16/future-of-online-retailing-facebook-entrepreneurs-technology-wharton.html

Mobile technology, social networks and better analytics
are converging to separate shoppers from their cash.

Imagine an online store that replicates the experience of stepping into a boutique.

As online and in-store retailing converges with the growth of mobile networks, the daydream could become a reality. Via their smartphones, shoppers at retail stores will have the capability to check the Internet for online promotions, product descriptions and reviews by past customers. Meanwhile, online customers will have access to software that allows them to "try on" clothing, or discuss a buying decision with contacts on social networking sites.

New mobile capability, social networks and better analytics will play an important role in the future of the retail industry, according to speakers on a recent Wharton retail conference panel titled, "E-Commerce: Is It the Future of Retail?" "Mobile will be a critical piece of retailing, even more so than shopping online," said Dave Larkins, vice president of NetPlus Marketing in Conshohocken, Pa., and a co-creator of online boutique The Colony.




Mobile technology has not advanced to its full capability, Larkins noted, but continues to evolve due to expanded bandwidth and increasing consumer adoption of smartphones. As networks get better, it becomes easier for retailers to target customers based on where they live or shop, and to communicate with them in real time. Location-based social networks such as Foursquare, which essentially ask users to share their retail patterns with friends, are viewed as another way for brands to link to communities, he added.



The history and visibility of brick-and-mortar stores helped retailers achieve immediate brand identification for new Internet ventures. But the support is now moving in the other direction--from the Internet to physical stores, said Kris Roberts, divisional merchandise manager of Target.com. She pointed out that consumers are eager to use mobile devices to inform in-store decisions because accessing online information on the spot is more convenient than having to research an item later via computer. "This brings the two retail modes together, and I think it will transform how people shop," Roberts stated.


Cross Channels


Most retailers continue to view online customers and shoppers at physical stores as two separate entities, panelists said. Roberts noted that Minnesota-based Target ( TGT - news - people ) is trying to develop "cross channels" that would link the offline and online experiences to reach consumers more effectively. But she added that cross-channeling is often an overused buzzword that presents many obstacles for retailers, including the need to update organizational systems to integrate in-store operations with Internet retailing. "We will need to see a generation or two of management changeover to really leverage the power [of cross-channeling]."
Successful integration, said Larkins, will require top managers to embrace new technology systems. "It begins with leadership," he said. "It is all about philosophy and how much the C-level executives are going to embrace these channels as one." Retail executives need to reduce divisions in their organizations and bring together people working in catalog, stores and online operations to create new added value. "It's tricky," noted Larkins. "The point is to have everyone at the table thinking about things and not just in silos--from stores to online to mobile and social media--beginning [with] the idea process and the planning process and the thought process."

Roberts suggested that the Web is the "ultimate" branding opportunity for companies because it is available anytime and anywhere. Buying an item in a store is a "primal" experience that will never go away, she said, but online shopping can deliver new levels of information and convenience for consumers. Roberts predicted that as online retailers interact more with consumers, shoppers themselves will take a role in shaping brands.




Consumers are beginning to expect brands to bring added value to their online stores, and to the social media networks businesses use to reach out to shoppers--and not just in the economic sense. The creativity a company uses on its Facebook page, for example, is becoming increasingly important. Shoppers "expect more now," Larkins noted. "If [an online promotion] has no value, no creativity, it doesn't show that you thought about the audience. A lot of this starts with the audience and understanding and exploring, enlightening and engaging them in a completely different and new way."



Web customers are in search of new information, particularly opinions from other shoppers, and increasingly want to read product reviews, said Tony Capasso, vice president of retail at Bazaarvoice, an Austin-based marketing firm that specializes in online customer reviews. When customers read what other shoppers write, it helps deliver a more tactile experience to Web retailing, he suggested.




One of the leaders in the development of e-commerce is Amazon.com ( AMZN - news - people ), which started out as an online book seller but has now broadened its scope to every major retail category. Capasso said 15-year-old Amazon continues to be the biggest surprise in the industry. Retailers invested significantly in transferring their brand equity to the Web, but Amazon--a store with no brick-and-mortar locations--continues to dominate the channel, he noted.



A Quicker Route to Checkout

Despite Amazon's success, the company and other online retailers have yet to create experiences that guide consumers to the specific products that they want, Capasso pointed out. Real-time applications would make it possible to conduct an analysis of shoppers in the moment, rather than pulling data that might be two or three weeks old, he suggested, and technology that makes better use of peer recommendations would also contribute to increased personalization of e-commerce.



Making online stores more relevant to consumers depends on the amount of time, technology and investment executives are willing to spend on integrating and adding personalization to their sites, Larkins noted. It's a question of "just where does it fall in the mix? Unfortunately right now it gets pushed down. But the technology keeps improving and applications are getting better." He predicted that in the next two years, customer personalization will play a much more important role in e-commerce than it does now because of the growing importance of social media in retailing. "If you are not there you are definitely going to be behind," he said. "It will become a necessity, where before it was a luxury."

Developing technology also has the potential to make it easier for retailers to figure out how to infuse their online stores with the look and feel of the company's brick-and-mortar locations. Larkins pointed to electronics giant Best Buy ( BBY - news - people ) and clothing retailers American Eagle and Roxy as brands that are working across channels in a way that is immediately apparent when a customer walks into the companies' stores or visits their websites. "It's not just in-store and online; it is in their advertising. It is truly fluid. With these brands it is natural. ... You need to get the people in place to make it a natural integration."

But Roberts suggested that, while Internet retailing has made huge advances, online stores are still unable to provide the instant gratification offered by a physical shopping experience. A potential "game-changer" for retailers would be the ability to get orders to a shopper's home within several hours, rather than days or weeks. Speeding that process would allow online retailers to offer shoppers a more timely sense of satisfaction after making a purchase.


Another common problem among Internet retailers is shoppers abandoning their virtual "shopping carts" before finalizing a purchase. Roberts named shipping as one of the main barriers to completing online sales. When customers see shipping charges that represent a significant portion of the item's price, they balk. Visitors to online stores also tend to use the cart as a shopping list, or to facilitate browsing or price comparisons, she added.

Emerging technology may decrease the number of "abandoned" shopping carts by removing other barriers that exist in online shopping, such as the difficulty for customers to grasp the fit of pants or dresses, Roberts noted. She added that computer-generated programs are evolving that allow consumers to "try on" jeans virtually to see how the pants would look on their own bodies.




Larkins' company works with apparel retailers that target teen girls. He discovered that these shoppers need affirmation from their friends before finalizing a purchase. When they walk into a store, they are often with friends and are able to communicate with them to make sure they are buying the "right" product. He noted there are Web tools in development that would allow shoppers to open chat sessions and bring friends into the decision-making process online.



Another tool to curb Internet cart abandonment, he said, is a dynamic e-mail system that can recognize that the cart has been abandoned and then send an e-mail quickly to the shopper offering a discount or another type of incentive to encourage the final follow-through.



No More Guessing

The level of integration will vary by brand and by customers' expectations of that brand, Capasso noted. "It will be important for the brand to understand where it fits from a customer's perspective--whether they want to lollygag or discover, or whether the brand helps them get to where they want to go. Brands are struggling with that." He added that brands are trying to build online communities that allow customers to interact with other shoppers or celebrities.

Larkins said retailers can use new analytical tools to gauge the response they are getting online. "They don't have to guess anymore," he said. In addition to more traditional marketing metrics, such as focus groups based on demographics, new tools are available to measure Internet buzz and feedback from blogging communities, he noted.




"Whether someone has an experience in a store or online or mobile, they will come online and tell about it," suggested Capasso. "The one thing I think you can begin to measure is the impact of better branding, which comes down to how you run and understand the types of data you are collecting." Capasso said he is not a fan of focus groups because of the time lag in getting information. He pointed out that some brands are able to make adjustment and tweaks to their merchandising programs--such as Internet promotions--but "real-time feedback is crucial."



Larkins added, however, that despite the potential to enhance online sales with new marketing tools, retailers must still deliver value and remain mindful of their return on investment for new technology. "If you are investing $1 million in a branding program, you better have the measurements in place. If you don't, you are missing the point of [being] online."