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Transcript of TaoBao
Market and Sales
Value Chain and Value System
Saturday, July 05,2014
Wenjing Cai, Rui Gao, Jin Wang, Qingqing Lu
Four Porter Models
Porter Models Introduction
Value Chain and Value
with Porter Models
The power of Supplier
Supply-side factors, mainly through the increased input prices and lower quality unit value the ability to influence industry profitability od existing enterprises and the competitiveness of products.
The threat of Entrants
The power of Buyer
Buyers, mainly through its lower prices and require a higher quality product or service ability, to influence industry profitability of existing enterprises.
The threats of Substitutes
The traditional shopping method
Taobao is a online shopping website similar to Amazon in China.
Taobao is the biggest C2C platform in China.
Taobao is the biggest e-tailing platform in the world today.
Taobao gathers product information and creates diverse categories of product on their website.
The merchants in Taobao will receive customer’s reply after finishing one purchase online.
Taobao makes good use of website, weibo (a website like twitter) and other media（APP）to promote their discount information.
Why TAOBAO succeed?
The Cost Leadership Strategy:
creating uniquely desirable products and service
offering a specialized service in a niche market.
The Cost Leadership Strategy
Increasing profit by reducing costs
Increasing market share through charging lower prices
Access to the capital needed to invest in technology that will bring costs down
Very efficient logistics
A low cost base (labor, materials, facilities)
Taobao’s Market and Sales
Profit from Alipay
- A large amount of the fund precipitation under the credit control management
- 90 millions Interest per year
- Service fees
Profit from Tmall
- Major retailers and big sellers
- Deposits and service fees
- Technical service platform resources
Bargaining Power of Customers – Medium.
- The units purchased by the individual customers each time tend to be small.
- Individual consumers can choose a different B2C websites since the switching cost would not be high
Bargaining Power of Suppliers – low.
- little switching cost for Taobao
Taobao’s After-Sales Valued-added Service
Providing platform for advertisements
According to different prices payment to display
Specific Sale Promotion
Providing different sales proposals for customers