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Transcript of Taobao.com
XIE CAN RAN
YIN CHUAN BIAO
WANG XI LING
ZHU ZHENG QIN
Problems & Fixing
Suggestion & Conclusion
& Social Evaluation
Online shopping website
B2C, C2C, group-buying, auction
Over 760 million listing products
GMV exceed 1 trillion yuan
Services & Features
Happy Taobao, etc.
Official communication tool
Chat between buyer and seller
Official online payment platform
Release payment when buyers
Support various services payment
Enable users to finance their wealth online
Free of charge
-Real name registration system
-Thoughtful guideline (Taobao university, real time help center, etc.)
Became the largest online
shopping website in Asia
Tmall created record that
transaction amount reached to
10 billion yuan within 13 hours
Got the fund
platform management qualification
Integrity, Active and Quick
Create millions of job opportunities
for the society
Age and Population Structure
-Covers all age level
-Largest Population and
Spread Widely → Huge Demand
National Income Increase
-Economy develops rapidly → National Income ↑ → People‘s Purchasing Powers ↑
→ Need a Bigger Market
Financial Crisis and Price Advantage
-China still suffer from the financial crisis
- Price: Online Shopping V.S Traditional Retail Shopping
- Ages between 16 to 35 are the main consumer → Pursue Fashion
Development of the Internet and Information Integration
-Development of the Internet → More Convenience
-Internet give a channel for industry
-Online chatting platform become more mature
→ Information are more integration
Aging Structure for Taobao
The Intensity of Rivalry among Competitors
Keep market share and has increasing trend in each year.
Major competitors: Eachnet and Paipai
-An oligopoly is a market or industry is dominated by
a small number of sellers
The Threat of New Entrants
In order to construct an online shopping platform
→ Require a lots of capital
→ Maintenance cost and logistic support in long run
→ Create a high barrier for the new entrants
Baidu → New Entrants, build up by big corporation
→ Market share is not high → Taobao’s position is
The Bargaining Power of Buyers
Buyers usually buy products in online are belongs to normal goods
→ Buy goods at different sellers easily → The
switching cost is low
The amount for buyers to purchase is too small
→ The treat of backward integration by buyers
The Bargaining Power of Supplier
Supplier does not actually “exist”
The Treat of Substitute Products and Services
The major substitute products and services are retail store
Like Wal-Mart, plenty of goods, such as food,
vegetable, dairy, etc
Like 7-11, Save the customer’s time
Brilliant Market Strategy
-Free Charge Strategy, Attracted a huge customer groups,
Expand market share
-Aliwangwang and Escrow Payment solution, Alipay,
which is more safe and convenient, and it get most users’ support.
Advantage of Tangible and Intangible Asset
-For tangible asset, Alibaba Group
-For intangible asset, Excellent brand image and reputation
“Free” to Bring a Heavy Burden
-Originally design to the China’s
market, expanding market is difficult
due to the model limited
The Rapid Development of Online Shopping Market
-Until 2012, China has using the online payment
users reached 167 million, which increase 21.6%
compare with year 2011.
Recent Boom in Nontraditional Financial Products
-Yu E Bao, a money-market fund promoted by Alipay.
-Plenty amount of cash flow into Alipay every day →
Making fund investment
Strong Competition with Others
-C2C mechanisms are easy to duplicate,
-Stabilize their customers → Focus on building
Credit rating system
Relying on rapid Internet development in China
Taobao kept a smooth sailing for a long time.
Many competitors outside and drawbacks inside
Taobao begins to introspect and contemplate.
Opportunities always lie within crises
A further step towards a first class C2C platform.
Chinese online shopping industry will get more
Taobao crack down the bad sellers almost every day.
As of January 11 2012, Taobao did with the cases about infringement of intellectual property up to 82 million, punished 79 million sellers.
On November 28, 2012, Taobao announced crackdown data of 11 months in 2012.
In 2013, Taobao even did more.
Violation Points System
If deduction of the points approached to 48 points, the sellers needed to close the stores.
Since 2013, If the sellers violate again, they will be deducted by 24 points.
If the sellers use multiple accounts to repeat selling fake products, they may face the deduction of 48 points.
Many scholars believed that in the future B2C will become the most important market on the internet.
C2C is hard to control the quality
Shift the attention to Tmall
Attract more sellers and buyers
Decrease the inventory
Increase the visibility
Yu Ebao is a good try
On October 31, 2013, CRSC issued a third-party e-commerce platform operating qualification license.
In the afternoon of November 1, 2013, Taobao started its fund financial management channel.
The crackdowns sometimes made mistakes
The small sellers got together to attacked some of the big sellers
Bought many hot selling goods of the big sellers but asked for the refund after
On November 11, 2012, Taobao single-day trading volume reached 19.1 billion yuan.
On November 11, 2013, the total transaction of Alipay fixed at 35 billion yuan in the end.
The total transaction volume reached 1.5 billion yuan within 10 minutes, and reached 50 billion yuan within 38 minutes.
-Fully refund after the promotions
-Fake “original price”
-Logistics were not powerful enough
The trading volume is still not good enough
People are not ready
Prefer seek more professional website
Instance service for buyers—AliWangWang
sellers on group purchase can built up their own customer service center
Taobao’s customer service center--self-service, telephone service and online cloud service
Resource-Based View of Taobao
Revenue over 8 billion each quarter
Head office in Hangzhou
Service offices in major cities
Evaluation & control system
Seller-credibility rating system
Selling shop decorating tools
online shop management service
gallery featured positions
Campus recruitment—Ali star project
Taobao management team
Asia No.1, World No.3
Comparative mature in customer guarantee project
occupied more than 80% of the china’s e-commerce market share
Taobao is a star company with high market share and growth rate
Taobao’s current stage in Life-Cycle
- strong increases in transaction volume
- high brand recognition
- trying to built up differentiated products
- predominant in Chinese e-commerce markets
- relative mature in technology and organization
Product Quality Concern
Poor quality products
-In the previous years, people care more
about price than quality of products
-Taobao always provide cheap commodities
Sell fake commodities
-Hard to check products one by one in a
-Not only affect seller’s credit, also affect
Taobao’s credit, even worse
Fierce Market Competition
Taobao presents a mass market for customers.
Its competitor’s focus strategy might bring threaten to it.
Taobao’s competitors are making effort to catch up with it.
Jingdong: focuses on online-selling electric appliances
Dangdang: focuses on online-selling books and could provide more book resources for customers
Problems they encounter
Manipulation of Credit Rating System
Manipulating credit rating grade
-Grading system gives customers rights to grade
the shops they consumed.
-But the sellers cannot change it themselves, so they
hire people to buy their goods in very low price in
a large number to make their sell look convinced.
When real customers wrote something bad about
-offer some benefit to them if customers change their
review about the goods.
Other firms provide more specific commodities→easier and quicker to find what customers want →switching cost is low→customers will turn to them.
For instance: Buying a cell phone
Famous for its mass market before
While mass market became a problem
Created by Elaine