31/31: Taobao, Chinese Online Shopping Giant
I have been saving the best for last. At some point, I talked about Taobao and how it has become the main player on Chinese online shopping.
Taobao is a website and mobile app for buying and selling everything and I really meant the everything. You can buy from cars or houses, to hire services like cleaning personal or moving companies. You can buy food, clothes, medicines, cameras, scooters, furniture. Almost everything you can think of and it’s legal, you can find it on Taobao.
The company owned by Alibaba Group has become more than the Chinese Amazon or eBay, it has mixed both systems and transformed them into a new way of doing online shopping. The company started in 2003 after eBay made public its interest to enter the Chinese market buying Eachnet. After just two years Taobao became the main online buying platform in China owning 59% of the market and killing eBay just one year after that.
The platform started copying eBay model, being a C2C business where users could post for free their products in order to let other users buy them. In 2008 the company opened its B2C platform, letting brands to register their official accounts and offering their products to the clients through TMall (Taobao Mall), which catapulted the usage of the app to dominate the market almost completely.
Taobao is, at this moment, the best way to buy things in China. It also helps small and medium business to enter the market easily and offer their products to clients all over mainland China without the need of being physically in the main city like Shanghai or Beijing.
The process is simple, you can look for a product using keywords or a picture or image taken from the internet. You are then presented with thousands of options, you can filter them by price, reviews, the number of buyers, location, etc. Once you select the product you can choose the size, color, model, complements or any other add-on offered by the seller. You add it to your shopping cart and checkout. Automatically it connects to your Alipay account in order to pay and the order is placed. In less than three days you will get your products.
Most of the things that I’ve bought in China since I arrived have been through this app. Most of my clothes, presents for my family, a piano, books, and many more things.
Taobao has 400 million users with an estimated 150 million monthly users. In 2016 during Chinese Single’s Day, November 11, the company reached ¥121 billion on sales ($17.8 billion USD), becoming the largest online shopping day, beating Cyber Monday by $15 billion dollars. Taobao controls 80% of all the Chinese online shopping market.
Taobao success has many key points but some of them are:
Early Adopter. Alibaba Group saw a good opportunity on eBay and it moved quickly before the popular C2C platform became popular in China. Knowing the market from the inside helped Alibaba group to get the superiority it needed in order to kill its early competitors. Once owning more than half of the market the path was easier for the giant of online retailing letting them establish the rules of the game.
Availability. Taobao is open 24 hours, you can buy what you need at the moment and if you live in a big city or the same city as the seller then you can get it in less than one day. It’s easy to find whatever you are looking for without too much trouble and the suggestions given by the app sometimes are a good fit for what you are searching. This letting the users have a better experience while using the app.
Delivery Infrastructure. Chinese delivery times are amazing, if you live in one of the main cities you will get your order in no more than three days, even if the seller is literally on the other side of China. This amazing delivery infrastructure has made Taobao a great option for buying things, not only that the return policies are usually really good and in less than a week you can return your item and get the new size or color.
Alipay Integration. Alibaba’s Alipay is completely integrated with Taobao, it’s the easiest way to pay (and the only one as well). Paying right without not even leaving the app is a great way to maintain your costumers on your app. Also is really convenient, because the transaction gets recorded and so you can ask for a refund in case you don’t get what you want. You can read more about Chinese cashless culture here.
Security. Taobao has worked really hard on giving security to their users. Being Alibaba the intermediary in the transactions lets the buyers get what they wanted and the sellers to get their money. Online transactions can be a little tricky, and in some countries this is the main barrier online shopping finds, getting the trust of the users. Alibaba worked well on this and now people trust more on Taobao than other online retailers like Amazon.
Easy to use. As I said, it’s easy to use. Even if you don’t speak Chinese (like me) you are able to look for what you’re looking for just using reverse image search or just putting keywords. The number of options, prices, delivery dates, brands, styles, sizes makes the buying experience easy. The app is a step by step one and while it’s easy to get lost on the infinite list of products, buying what you want is quite easy, just click three buttons and your order is on the way.
Communication. Taobao has a really good chatting platform where you can directly contact the seller. If that’s not enough you have access to their phone number and even address if you want to visit the seller directly.
Taobao has changed the way of doing business in China. Now a lot of people can set their own store even if they don’t have a physical space where to start. This helps to improve the local business which is one of the main purposes of Taobao as well.
The platform has led to a really increase in online shopping all through mainland China and it’s definitely a game changer for some brands.
Outside of China we need to rely on different apps for different needs. Amazon is maybe the best B2C platform, eBay the best C2C and I’m not sure yet of what app to use in order to get a Services C2C/B2C platform. Taobao was able to put all of that in just one site and offer it to the biggest market in the world.
Taobao has been evolving and it’s still changing almost every day. With the new integration of the live channels, big Chinese artists or influencers to promote products and get paid for it, while doing a live streaming in their houses, cars or in the streets.
We know the future of shopping is online, maybe we should start looking to the Chinese market in order to learn lessons on how to do this, Taobao has become a great success on this matter and maybe it’s time to start learning on how to do things.
This story is part of my 31/31 challenge. Following a friend’s idea, I will publish at least one story every day for the next month.
If you see any error please let me know, the idea is to stop over-reviewing my stories before publishing them.
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