Taobao

History

Taobao Marketplace (formerly "Taobao") was launched in May 2003 by Alibaba after eBay acquired Eachnet, China’s online auction leader at the time, for USD 180 million and became a 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 act in local consumers' best interests, such as instant messaging for facilitating buyer-seller communication and an escrow-based payment tool, Alipay. As a result, Taobao became mainland China's undisputed market leader within two years. Its market share surged from 8% to 59% between 2003 and 2005, while eBay China plunged from 79% to 36%. EBay shut down its China site in 2006.

In April 2008, Taobao introduced a newly dedicated B2C platform called Taobao Mall to complement its C2C marketplace. Taobao Mall established itself as the destination for quality brand name goods for Chinese consumers. Taobao Mall launched an independent web domain, Tmall.com, and enhanced its focus on product verticals and improvements in shopping experience in November 2010. It became an independent business in June 2011 and changed its Chinese name to Tian Mao (Tmall) in January 2012. As of October 2013 it was the eighth most visited web site in China.

In 2008, Taobao fueled the overall growth of the Chinese online shopping industry through execution of the “Big Taobao” strategy with the aim of becoming a provider of e-commerce infrastructure services for all e-commerce market participants.

In October 2010, Taobao beta launched eTao as an independent searching engine for online shopping, providing product and merchant information from a number of major consumer e-commerce websites in China. Online shoppers can use the site to compare prices from different sellers and identify products to buy. According to the Alibaba Group web site, eTao offers products from Amazon China, Dangdang, Gome, Yihaodian, Nike China and Vancl, as well as Taobao and Tmall.

In May 2011, Alibaba Group opened a retail store in Beijing under the Taobao Mall brand. The five-story 25,000sqm Taobao Mall iFengChao Furniture Showroom opened as a complement to their online stores.

In June 2011, Alibaba Group Executive Chairman and former CEO Jack Ma announced that Taobao would split into three different companies: Taobao Marketplace (a C2C platform), Tmall.com (a B2C platform; then called Taobao Mall), and eTao (a search engine for online shopping). The move was said to be necessary for Taobao to “meet competitive threats that emerged in the past two years during which the Internet and e-commerce landscape has changed dramatically.”

From 2012 onward, Taobao began to accept international Visa and MasterCard credit cards; prior, only domestic banks were supported by AliPay.

On April 29, 2013, Alibaba announced an investment of USD 586 million in Sina Weibo. According to Reuters, the deal “should drive more web traffic to Alibaba's Taobao Marketplace, China's largest e-commerce website with a consumer focus.” On August 1, 2013, Alibaba launched Weibo for Taobao, which allows users to link Sina Weibo accounts with Taobao accounts.

Mascot

Taobao’s mascot is an ant, which represents their corporate culture. Ma introduced Taobao to the outside world by stating, "We are the ant army." Ma once organized more than 2,000 employees at a gymnasium to celebrate the 5th anniversary of the founding ceremony. At the party, Taobao employees waved the Taobao mascot — the flag of "ants." At the end of the celebration that lasted for four hours, all the employees stood hand-in-hand, singing "If you do not experience wind and rain, you cannot see the rainbow. The ants that be organized together can beat the elephant."

Shop feedback

To thoroughly investigate a Taobao shop, a good way is to view its feedback by clicking the shop's rating icon. For Tmall.com shops, people click the stars to view their ratings. Taobao users usually spend time to read feedback and compare items of one shop with those of others. Feedback put up by the user can be genuine or made up which users have to thoroughly read through to conclude. If the feedback style and tone is same, likely, it's made up. Some of the feedback can also be posted by competitors. Users have to look at the majority of the feedback to deduce whether the feedback are genuine. The best way to conclude whether the item is truly worth buying is to look at the available feedback that are posted by users after they've used the item for a period of time.

For every trade deal on Taobao, there must be a section of customer feedback, which is a determination factor of the sale volume for the shop. Therefore, the shop owners often put effort to maximize the positive comments and eliminate the negative ones. Even profitable negotiations happen between sellers and the consumers for rating their satisfactions toward the commodity and their shopping experiences. In order to collect public perspectives towards Taobao services, searching tools and other functions are used to determine and learn the users’ demands, which could help Taobao make more improvements; There are also surveys handed out to Taobao consumers including the following parts:

·The obstacles that you encounter while using the product.

·Your advises and reviews of the product.

·The frequencies of your uses on the product, or the importance of that particular product to the users themselves.

·The satisfaction level towards the specific aspects, including visual and typographic layout, procedure and instruction guide.

·The overall satisfaction level towards the product.

Alipay

Launched in 2004, Alipay (simplified Chinese: 支付宝; traditional Chinese: 支付寶; pinyin: Zhīfùbǎo), an escrow-based online payment platform, is the preferred payment solution for transactions on Taobao Marketplace. It is the most widely used third-party online payment solution in China. To ensure safe transactions, Alipay uses an escrow system through which payment is only released to the seller once the buyer has received his or her goods in satisfactory condition.

According to the Alibaba Group web site, Alipay is partnered with multiple financial institutions as well as Visa and MasterCard to facilitate payments in China and abroad.

AliExpress

(Smarter shopping, Better Living) Aliexpress(www.aliexpress.com) is created in April 2010. It is an international retailing website facing worldwide consumers, including accounts from Russia, USA, Spain, Brazil, France, UK and other countries. People who live overseas could go online-shopping for production directly from Chinese manufactures with reasonable price through AliExpress.

AliWangWang (TradeManager)

A distinctive feature of shopping on Taobao Marketplace is the ease of communication between buyer and seller prior to the purchase through its embedded proprietary instant chat program, named AliWangWang (Chinese: 阿里旺旺; pinyin: ĀlǐWàngWàng). It has become a habit among Chinese online shoppers to interact with the sellers through AliWangWang to inquire about products and to bargain prior to purchasing products.

Happy Taobao

In Dec. 2009, Taobao, together with Hunan TV, set up Happy Taobao, Inc for television shopping. Hunan TV launched an entertainment series called "Happy Taobao", while Taobao Marketplace created channels and independent websites.

Other services

Taobao Marketplace introduced various features and services to create a better user experience for online shoppers and retailers. For instance, in January 2010, it launched the Taobao app, created by independent developers through the Taobao Open Platform, to be downloaded by consumers in Taobao App Store.

In March 2010, it introduced the Taobao Data Cube platform, which gives small businesses access to its aggregate consumer transactions data for insight into industry trends.

In June 2010, it partnered with Wasu Media Internet Limited to launch Taohua, a digital entertainment products platform, and interactive digital television shopping, that are operated by a joint-venture formed by the two companies.

Developing Strategy

In March 29, 2016, the CEO of Alibaba group, Yong Zhang, point out the three directions of the future development goals for Taobao: more community-based, more content-enabled and local adapted in the 2016 annual customer conference held in Hangzhou. Taobao extensively uses shopping strategies such as data personalizing, customer loyalties, video broadcasting and the focused demand of a single community to build stages for sellers to display their commodities. It is strictly constructing a new ecosystem from content producing, to content propagating, and content consuming with Alibaba’s cooperating internet platforms like Youku, Weibo, Alimama and Alifilms. Except for using centralized and demand-matching supplies depending on the need of users to form a self-operational system of content producing and consuming transmission, Taobao also improved the quality of the commodity and its services towards the consumers.

Adaptive Agent

Taobao applies a searching tool named 'adaptive agents'. An adaptive agent picks up the signals from consumers’ purchase records, including categories, brands, functions and colors etc; The search engine involves the scanning of a particular bar code. Taobao tracks customers' purchasing history and reorganize it into a series of selections that the buyers are likely to be attracted to. The way that an adaptive agent works is image prior models plus the posterior data using BAYES theory (LAPLACE method): The possibility of the occurrence of a certain event can be estimated through the frequency of its occurrence in the past. The ranking of a product or a page can be determined by the combination of its prior information plus its posterior data of click transaction.

The popularity of Taobao's searching model is based on the calculation of correlation rate and quality scores:

Taobao increased its traffic by launching an app.

Semantic Search

Taobao automatically classifies the text and images of the product, and uses tags to make the correlation match. The usage of the semantic search is to solve the correlative problem that key word texts cannot solve, such as images, complex texts, and ambiguous texts. Semantic search is also a way of recommendation that Taobao presents with more similar items consumers might find when searching one keyword. There are entity tagging and other classifications.

Chinese Singles Day

Chinese Singles Day (11/11) is China’s biggest e-commerce sales day of the year. It is larger than America’s Cyber Monday. In 2011 Taobao.com and Tmall.com took only 8 minutes to reach 100 million RMB (equivalent to $15.8m) in transaction volume and after the day ended, transaction volume reached RMB 3.36 billion.

Taobao for Southeast Asia

In September, 2013, Taobao launched its Southeast Asian site. A translation feature is now available on Taobao.com for major languages in Southeast Asia.

Metrics

Taobao Marketplace had more than 5 million registered users as of June 2013 and hosted more than 80 million product listings. It facilitated approximately RMB 200 billion in gross merchandise volume in 2009. In September 2013, Taobao ranked 12th overall in Alexa's internet rankings. For the year ending March 31, 2013, the combined gross merchandise volume (GMV) of Taobao and Tmall.com combined exceeded RMB 1 trillion.