Taobao
Encyclopedia
Taobao is a Chinese language
Chinese language
The Chinese language is a language or language family consisting of varieties which are mutually intelligible to varying degrees. Originally the indigenous languages spoken by the Han Chinese in China, it forms one of the branches of Sino-Tibetan family of languages...

 web site for online shopping, similar to eBay
EBay
eBay Inc. is an American internet consumer-to-consumer corporation that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide...

, Rakuten
Rakuten
operates and manages business to consumer electronic commerce site, Rakuten Ichiba, and consumer to consumer auction site, Rakuten Freemarket. Its business is centered in Japan, although it has began international expansion through acquisitions. The chief executive officer is Hiroshi Mikitani...

 and Amazon
Amazon.com
Amazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...

, operated in the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...

 by Alibaba Group.

Founded by Alibaba Group in May 2003, Taobao facilitates business-to-consumer (B2C) and consumer-to-consumer
Consumer-to-consumer
Consumer-to-consumer electronic commerce involves the electronically facilitated transactions between consumers through some third party. A common example is the online auction, in which a consumer posts an item for sale and other consumers bid to purchase it; the third party generally charges a...

 (C2C) retail by providing a platform for businesses and individual entrepreneurs to open online retail stores that mainly cater to consumers in mainland China
Mainland China
Mainland China, the Chinese mainland or simply the mainland, is a geopolitical term that refers to the area under the jurisdiction of the People's Republic of China . According to the Taipei-based Mainland Affairs Council, the term excludes the PRC Special Administrative Regions of Hong Kong and...

, Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

, Macau
Macau
Macau , also spelled Macao , is, along with Hong Kong, one of the two special administrative regions of the People's Republic of China...

 and Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...

.

History

Taobao was launched in May 2003 by Alibaba Group after eBay acquired Eachnet, China’s online auction leader at the time, for US$180 million and became the major player in the Chinese consumer e-commerce market. To counter eBay’s expansion, Taobao offered free listings to sellers and introduced website features designed to better cater to local consumers, such as an instant messaging tool for facilitating buyer-seller communication and an escrow-based payment tool, Alipay. As a result, Taobao became the undisputed market leader in mainland China within two years. Its market share jumped from 8% to 59% between 2003 and 2005, while eBay China's slid from 79% to 36%. eBay had to shut down its own site in China in 2006.

In April 2008, Taobao introduced a dedicated B2C platform called Taobao Mall to complement its C2C marketplace. Since then, Taobao Mall has established itself as the destination for quality, brand name goods for Chinese consumers. In November 2010, Taobao Mall launched an independent web domain, tmall.com, with an enhanced focus on product verticals and improvements in shopping experience. The site currently features products from more than 30,000 major multinational and Chinese brands.

In May 2010, Taobao and Yahoo Japan launched a cross-border retail initiative that allows Chinese consumers to purchase Japanese products from Yahoo Japan shopping and Japanese consumers to purchase Chinese products from Taobao. For the Chinese consumers, Taobao launched a Chinese-language portal called TaoJapan offering Japanese products. For Japanese consumers, Yahoo Japan added a Japanese-language portal called "China Mall" to its shopping platform. However, in line with import/export restrictions in both countries, certain products are not available to non-local buyers; for example, mobile phones listed on Yahoo Auctions are not carried over to TaoJapan and certain name-brand goods listed on Taobao do not carry over to Yahoo Japan's China Mall.

In October 2010, Taobao beta launched eTao as an independent online shopping search engine, providing product and merchant information from all major consumer e-commerce websites in China.

In June 2011, Alibaba Group Chairman and CEO Jack Ma
Jack Ma
Jack Ma is founder, chairman and chief executive officer of Alibaba Group and chairman of Alibaba.com, the Hong Kong-listed unit of Alibaba Group.-Early life:...

revealed that Taobao will be split into three different companies: eTao (to be used for shopping searches), Taobao Mall (a B2C platform), and Taobao Marketplace (a C2C platform).

Taobao Marketplace

Sellers are able to post new and used goods for sale on the Taobao Marketplace either through a fixed price or by auction. The overwhelming majority of the products on Taobao are brand new merchandise sold at a fixed price; auctions make up a very small percentage of transactions.

Taobao Mall

Taobao Mall was first introduced by Alibaba Group in April 2008 as a dedicated B2C platform within Taobao. Since then, Taobao Mall has established itself as an online gateway for leading local and global brands to reach out to the growing Chinese consumer base as well as the destination for domestic online shoppers to purchase quality, brand name goods.

In November 2010, Taobao Mall introduced an independent web domain, tmall.com, to differentiate listings by Taobao Mall merchants, who are either brand owners or authorized distributors, from Taobao’s C2C merchants. Meanwhile, it kicked off a US$30 million advertising campaign to raise brand awareness among consumers. It also announced an enhanced focus on product verticals and improvements in shopping experience.

Brands that have established flagship stores on Taobao Mall include P&G, adidas, UNIQLO, GAP, Nine West, Reebok, Ray-Ban, New Balance, Umbro, Lenovo, Dell, Nokia, Philips, Samsung, Logitech and Lipton.

Alipay

Alipay , an escrow-based online payment platform, is the preferred payment solution for transactions on Taobao.

AliWangWang

A distinctive feature of shopping on Taobao is the pervasive communication between buyer and seller prior to the purchase through its embedded proprietary instant chat program, named AliWangWang . It has become a habit among Chinese online shoppers to “chat” with the sellers or their customer service team through AliWangWang to inquire about products, engage in bargaining prior to purchase products.

Others

Taobao has introduced various new features and services in recent years. For instances, it launched the Taobao App Store in January 2010 to provide Taobao merchants and consumers with applications created by independent developers through the Taobao Open Platform; in March 2010, it introduced the Taobao Data Cube platform, which gives small businesses access to its aggregate consumer transactions data for insight into key industry trends; and in June 2010, it partnered with Wasu Media Internet Limited to launch a digital entertainment products platform Taohua and interactive digital television shopping, which are operated by a joint-venture formed by the two companies..

In October 2011, Taobao has experienced two successive waves of online rioting since it significantly increased fees on online vendors . The service fees raised from 6,000 yuan ($940) to as much as 60,000 yuan ($9,400) a year, and a compulsory fixed sum deposit gone from 10,000 yuan ($1,570) to up to 150,000 yuan ($23,500)

Users

Taobao reported more than 370 million registered users as of the end of 2010 and currently hosts more than 800 million product listings. In May 2011, Taobao ranked 15th overall in Alexa's internet rankings.

Financials

In 2009 Taobao saw advertising revenues of $220 million. Advertising accounts for a majority of Taobao's income. Analysts believe Taobao's turnover exceeded 400 billion RMB in 2010 and revenues surpassed 5 billion RMB.

In January 2010, Alibaba Group said it expects gross merchandise volume on Taobao to double from 200 billion Chinese yuan in 2009 to 400 billion Chinese yuan in 2010, as China’s e-commerce market is expected to grow significantly in the next five to eight years.
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