Group Members: Yuan Lu, Ling Zhang, Xiao Chen, Sha Ye
Agenda
1.
2.
3.
4.
5.
6.
7.
Background
Buying Process
Featured Functions of Taobao
Porter’s Five Forces
Promotion Strategies
Problems and Recommendation
Reference
Company Background
● History
Founded by Alibaba Group in 2003
A Chinese website for online shopping; online auction leader
Became the largest online shopping website in Asia in 2006
Lanuched eTao (searching engine) in 2010
760 million product listings as of March 2013
500 million memberships; 6 million visitors per day
● Business Model
B2C platform: www.tmall.com
C2C platform: Taobao.com
Free of charge
Company Background
● Market Share in Chinese e-commerce market
sources: http://data.eguan.cn/dianzishangwu_172432.html
http://www.smejs.com/chuangyepingtai/chuangyptwschuangy/6001477142.htm
Buying Process
Step 1: Get Taobao ID
Step 2: Activate Alipay
Buying Process
Step 3: Search Items & Communicate with seller
Buying Process
Credit rating
Hearts
Blue Diamonds
Blue Crowns
Gold Crowns
Buying Process
Step 4: Choose Payment
Methods
Buying Process
Step 5&6:
Receiving
&
Feedback
Featured Functions of Taobao
Searching functions
Gallery Sales transaction volume credibility price range
Tmall Second handed Auction Wangwang Online
Locations
Trade Safety Guarantee
Aliwangwang
Threat of New Entrant(Medium)
Too many companies that have their own product. They
could also enter into the B2C market by adding the B2C
functions into their official websites
- They are more professional and targeted.
In order to construct an efficient online
shopping platform
-The capital requirements are a kind of high.
Buyer Bargaining Power(Medium)
There are many buyers usually buy products in online are
belong to normal goods
and they can buy goods at different sellers easily with no
switching cost by choosing different webs(high)
The amount for buyer to purchase is too small
Buyer cannot credibly threaten to back-integrate
into the industry (Low)
Supplier Bargaining Power (low)
Taobao is not a manufacture firm but an e-service one.
- Major suppliers are those advertiser ( such as, some
famous brands,or websites)
Suppliers are not a union and the price is generally based on
the market
The supplier bargaining power is limit
and stable
Threat Of Substitutes (High)
The most important substitutes services are:
(1)the self-websites of large companies
(2)the traditional way to shop
(3) TV shopping
The Intensity of Rivalry among
Competitors(low)
Keep market share and has increasing trend in each year
Major competitors: Paipai , JD.
Oligopoly Pattern
The industry is dominated by Tao Bao( 83.5% of C2C, 50%
B2C)
Promotion Strategy
Advertising
-TV commercials
-Outdoor Advertisements
Public relations
-Sponsoring highly publicized events
Cooperation with Banks
-Protect against defaults and deceives
-Increase the confidence of customers
-Provide a convenient way
for vendors
Problems
Immature tax policy
not provide official receipts
and invoice
Lack technical innovations
copied by other
counterparts
Counterfeit merchandise
destroy Taobao’s
reputation
Recommendation
Make use of information technology and
resources
 Provide safety and scientific system
 Improve limited payment system

References
● http://en.wikipedia.org/wiki/Taobao
● http://www.taobao.com/about/intro.php?spm=1.22350.21637.8
● http://www.authorstream.com/Presentation/martinzhang73-1637615taobao-english/
● http://data.eguan.cn/dianzishangwu_172432.html
● http://www.smejs.com/chuangyepingtai/chuangyptwschuangy/6001477142.h
tm
● http://www.dwastell.org/MSc/Group6.pdf
Thank you!