From now classic Taobao.com to the brand-oriented TMall.com, the Taobao story as presented by a Taobao agent for the customers outside China, and then by the players themselves: businesses even in the remote rural areas, the most successful one growing into recognizable brands on the TMall.com, the couriers who are the lifeblood of Taobao operations, not least the customers themselves, as well as a local small business becoming a global one.
Disclaimer: I have no association either with Alibaba Group or with Go2Taobao/BuyWithAgents. The sole purpose of this post is to provide an illustrative follow-up to The Upcoming Mobile Internet Superpower [Aug 13, 2013], Assesment of the Xiaomi phenomenon before the global storm is starting on Sept 5 [Aug 30, 2013], and Opinion Leaders and Lead Opinions: Reflections on Steven Sinofsky’s “Era of Continuous Productivity” vision [Sept 1, 2013] posts on my ‘Experiencing the Cloud’ trend-tracking blog.
- How to buy from Taobao? Best Taobao Agent [Go2Taobao.com YouTube channel, April 25, 2013]
How to order from Taobao? Check http://www.Go2Taobao.com Follow us: https://www.facebook.com/Go2Taobao https://twitter.com/Go2Taobao http://gplus.to/Go2Taobao Best Taobao Agent. Go2 Taobao Agency provide professional english service, international shipping and secure payments. How to Shop on Taobao? Check it right now, and safely buy from Taobao.
- Buy from Taobao – Business Model [Go2Taobao.com YouTube channel, May 9, 2013]
- Taobao information [June 8, 2013]
Taobao is an online shopping platform where you can purchase anything and everything and have it delivered directly to your home. Sellers are able to post new and used goods for sale on the Taobao Marketplace either through a fixed price or by auction. The overwhelming majority of the products on Taobao Marketplace are brand new merchandise sold at a fixed price; auctions make up a very small percentage of transactions. Buyers can judge the sellers’ credit from their selling prestige, or the history of comment and complaint.
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- What is Taobao? [AlibabaGroupPage, May 1, 2013]
Interviews with people on the street, asking them what they know about Taobao – and how it helps them shop and sell.
- Taobao.com preserves tradition of making Chinese lanterns [AlibabaGroupPage, July 16, 2013]
Taobao.com is the most popular online marketplace in China where thousands of small businesses and entrepreneurs have set up shop. In this Alizila video, we meet a 76-year-old Chinese lantern handicraft master who is keeping his traditional craft alive through the modern tools of Taobao.
- E-commerce in Rural China [AlibabaGroupPage, April 25, 2013]
In this video from Alizila.com, e-commerce entrepreneur Du Qianli explains how his Taobao organic foods online store is helping poor, rural farmers in China’s Taihang Mountains earn extra income. For more on this story, go to http://alizila.com/can-e-commerce-ease-poverty-rural-china-video
- 7Gege.com – Customer Success on Taobao.com and TMall.com [AlibabaGroupPage, May 13, 2013]
7GEGE.com’s CEO, Louise Cao, describes how she built her business into a success using Alibaba Group platforms Taobao.com and TMall.com. In business since 2009, she also offers advice on how to build an online fashion business.
- Tmall.com Success: Joyme Furniture [AlibabaGroupPage, June 4, 2013]
Joyme Group is made up of several manufacturers who specialize in producing wooden furniture in northeastern Heilongjiang, China. For years, Joyme manufactured furniture for IKEA. However, with the rising costs of manufacturing and shrinking profits, Joyme decided to shift their business strategy from being IKEA’s OEM to launching their own retail brand. Find out how they used Tmall.com to make the transition successful.
- The Life of Taobao Couriers [AlibabaGroupPage, May 1, 2013]
Learn about the life and dedication of Taobao couriers, working in rural and urban areas. They are the backbone of e-commerce in China.
- A Mother’s Love on Taobao [AlibabaGroupPage, May 1, 2013]
To be a mother is a lifelong commitment and carrying milk for your baby is only the beginning. Learn how more than two million mothers have bought breastfeeding equipment on Taobao.
- Small Business From Korea Finds Global Success [AlibabaGroupPage, July 23, 2013]
A look at how DS Global Corporation (DS글로벌) president, Heaon-Jae Lee, found success for his small business in the automotive industry using Alibaba.com from Korea. From early on, Lee understood how the internet could help him reach new markets around the world. He now does business with companies across 70 countries, including Turkey, USA, Spain, South Africa, Brazil and Russia.
From: Xinhua Insight: Internet industry optimism to buoy China’s economy? [Aug 17, 2013]
At the 2013 China Internet Conference in Beijing, you felt like you had been teleported into a bazaar.
“Internet-related consumption of information products and services together with e-commerce are becoming the two biggest drivers of China’s economic growth and restructuring,” said Liang Chunxiao, vice president of the country’s top online trading platform Alibaba Group.
He predicted that online retail revenues would account for more than 16 percent of China’s total social sales in 2020 when the aggregated e-commerce volume exceeds 28.8 trillion yuan (4.7 trillion dollars).
“E-commerce will boost related sectors such as logistics and raw materials, and help release the consumption potential in many remote areas,” Liang added.
China’s Internet economy will take up 6.9 percent of its GDP in 2016, up from 5.5 percent seen in 2010, according to a research report by the Boston Consulting Group last year.
Alibaba has created 3 million direct jobs and over 100
billion[million] indirect ones, and the number will keep growing, according to Liang.
Another big online retailer Jingdong hired more than 30,000 delivery men, most of whom are migrant workers, said vice president Zhao Guoqing.
From: China’s e-commerce prize [Bain & Company briefing (survey-based), Aug 30, 2013]
The year 2013 will be remembered as the one in which China surpassed the US as the world’s largest digital retail market. Last year, Chinese e-commerce shoppers spent RMB 1.3 trillion [$212 billion] online, a sum that has grown more than 70% annually since 2009 and is expected to continue on its amazing trajectory, reaching RMB 3.3 trillion [$490 billion] by 2015 (see Figure 1). Digital retailing has furiously transformed shopping and purchasing habits, opening up vast opportunities for retailers and brands that pay attention to the nuances of massively changing consumer behavior.
To better understand how Chinese consumers shop and purchase online—and what implications that has for retailers and brands—Bain & Company surveyed more than 1,300 online shoppers across all city tiers, incomes, ages and education levels. A follow-up to our initial 2012 China e-commerce report, it gave us the opportunity to dig deeper into the dramatic growth numbers to understand how the world of online retailing has changed their behavior (see Figure 2). We found Chinese shoppers have been more willing than shoppers in other markets to use their smartphones to make purchases, are comfortable with third-party payments and online banking, and are happy to rely on third parties for deliveries—as opposed to picking up products in stores. Perhaps most important for the years to come is that we learned that digital retailing now is the major influence on their actual purchasing decisions.
As it explodes, China’s digital retail market also is making a dramatic shift from consumer-to-consumer (C2C) sites like Taobao—which introduced shoppers to online buying—to business-to-consumer (B2C) sites like Tmall, which surveyed shoppers tell us they trust more than consumer sites. Between 2009 and 2012, the compounded annual growth rate for B2C platforms was 160%, and it’s expected to continue to grow 53% a year through 2015. By comparison, Taobao, which represents the vast majority of the C2C market, grew by a compounded annual rate of around 65% in the years 2009 to 2012.
The Tmall phenomenon
As retailers and brands frame their strategies, they can’ t minimize the importance of Tmall, the dominant site where the majority of China’s B2C purchases take place. Tmall generated revenues of RMB 180 billion [$29.4 billion] in 2012, and the site has deftly shaped online retailing in China. Consider its iconic 11.11 digital retail event, in which shoppers are offered up to 50% discounts on most products. The single 24-hour period in November delivered fully 7% of Tmall’ s annual revenues in 2012, according to company reports. By the end of the day 213 million unique visitors had logged on, the company reported, accounting for 106 million transactions.
A presence on Tmall is critical for any merchant trying to establish a foothold with China’s online shoppers. Given its scale and ability to deliver enormous traffic, Tmall serves as a good entry option for brick-and-mortar retailers or brands that want to get shoppers comfortable with the experience of buying online. Then retailers can focus on convincing shoppers to make purchases on their own sites. Trouble is, our survey found that consumers often confuse flagship stores on Tmall with retailers’ own e-commerce sites. The challenge is to clearly differentiate the retailer’s e-store from its Tmall offering.
Ultimately, Tmall helps everybody grow, and fast. Its 11-11 digital holiday creates a halo effect that makes those 24 hours an exciting time for all online retailers in China.
The potential is huge for B2C sites to win away shoppers from C2C sites. Based on our survey, 96% of C2C revenues come from shoppers buying new—not second-hand—products like those sold on B2C sites. Tmall, probably the only profitable B2C e-store, is poised to gain from this trend. Its sister company, C2C giant Taobao, feeds traffic to Tmall without a fee.
These online-only pure plays lead the market over omnichannel retailers, those with both a physical and online presence. The pure player world supports three major business models. On Pure Platforms, such as Tmall and Taobao, vendors operate their e-store and own the products. These sites have no in-house logistics, relying on third-party players to fulfill orders. However, they integrate delivery into their sites, making it easy for shoppers. Taobao established a common platform that allows its third-party logistics partners to track the route and delivery status of orders. An Open Platform is a variation of this model. In sites like Jingdong (formerly 360buy), vendors own the products but only partially operate the e-store, although the platform will operate an e-store for a vendor for a service charge. While the Open Platform model has in-house logistics capabilities, an e-store may opt to use a third party and pay a service fee. Meanwhile, B2C pure players like 51buy operate the e-store, fully owning the products and using in-house logistics, except in remote regions.
Alibaba, the world’s biggest business to business (B2B) online platform, is probably the one facing the biggest challenge. It’s popular customer to customer (C2C) online marketplace Taobao receives more than 20 million orders a day (70% of China’s deliveries). The parcels are delivered by third-party providers that have to deal with China’s underdeveloped delivery infrastructure. This is a common problem the whole industry is facing, prompting other e-commerce players like Jingdong Mall (JD.com which was formerly known as 360buy.com), Suning and VANCL to invest in self-owned and managed logistics systems to ensure they are in control of the whole process.
In contrast, Alibaba is not interested in owning its delivery network and since 2011 it has been lobbying for what it sees as a “logistics revolution”.
In May this year, it announced the formation of a new company, Cainiao Network Technology. With Alibaba’s former CEO, Jack Ma, as the Chairman, Cainiao is an alliance of logistics companies, couriers and e-commerce companies such as Yintai Group, Alibaba Group and SF-Express, that are willing to collectively work for the development of a nationwide IT logistics platform. An Alibaba group spokesperson told CKGSB Knowledge that the company is “spearheading the project in cooperation with industry partners with a common goal of enhancing the existing logistics network, whether it be on the IT or physical delivery and warehousing levels”. With a planned initial investment of $16.3 billion, the consortium marks a critical step in Alibaba’s vision of developing what it calls a China Smart Logistics Network within this decade. The ultimate aim is to solve a common problem that the company describes as a “key industry bottleneck for e-commerce growth in China”, the spokesperson says.
Only sophistication and specialization can ensure that Alibaba’s Taobao and Tmall platforms will function efficiently in the future. The company wants to be able to guarantee same-day delivery nationwide. And it believes this will be possible only if all the parties involved form partnerships and strategic alliances to actively participate in the development of a ‘Modern 21st Century Logistics Network’.
It’s an ambitious attempt. According to the company, over the next 5-10 years, the newly formed Cainiao will oversee the construction of a nationwide warehousing network that will cover a total area as large as 560 American football fields (3 million square meters approximately). Beijing, Tianjin, the Yangtze River Delta and the Pearl River Delta are some of the locations under consideration to build these logistics hubs. Since the project is conceived as an Open Logistics Platform, its partners, Taobao sellers and B2C websites can openly share facilities and all the logistics data.
2012 is a triumphant year for e-commerce in China.
Alibaba, the owner of Taobao and TMall online store has reached top place as the most profitable Internet company in terms of net profit in Q4; several leading e-commerce providers are contending for larger market share while continuing to fuel the growth of the market. M-commerce is also booming.
Here’s a look at what China market holds for M-commerce in 2012 and beyond.
First of all, M-commerce user base has been growing steadily since 2009, it reached 149 million by the end of 2012 and expects to top 352 million by 2015.
In terms of market share, No one can beat Taobao‘s dominance at 62.7%. Jingdong, previously called 360 buy, remains a distant second at 16.7%, followed by a few other players like QQ, Suning, Vancl, Dung-dung and Yihaodian.
Moneywise, total revenue of M-commerce was merely 100 million US dollars in 2009, the figure topped 7.7 billion mark in 2012 and expects to reach 40.8 billion by 2015.
For M-commerce users, almost equal percentage of men and women shop online, the difference is less than 1%. However the number of women users is expected to catch up with men quickly.
China still has a regionally imbalanced economy. Most M-commerce shoppers come from affluent areas in the eastern part of China characterised by mega cities and dense population. For instance, 31.3%, 22.2% and 17.2% shoppers are from south China, east China and north China respectively where three largest metropolitan cities Guangzhou, Shanghai and Beijing are located.
There’re quite few choices for smartphone operation system. Android leads the market at 62.5%, followed by iOS at 32.7% and Symbian at 4.5%, which is still used on large number of low-end devices. Windows has got only 0.3% and there is lots of catch up to do for Microsoft.
Shoppers on Android, iOS and Symbian follow similar trends in time of shopping. However, while shopping on Android and iOS peak during the rush hours in the morning and afternoon, on the other hand, a large number of users on Symbian shop close to midnight.
Women and men have quite different tendencies in products bought. Women’s top purchases include women’s clothing, shoes, bags, cosmetic and skincare, and mother and baby products; men’s purchases include men’s clothing, women’s clothing, and 3C products.
Now, the average monthly spend for Q1, Q2, Q3 and Q4. While the spend under 8 dollars went down from 27.2% to 19.7%, spend in the 8 dollars to 48 dollars range has shown steady growth throughout the year. The spend level is expected to grow along with the improvement of living standard and maturization of large payment on mobile phone.
Concern for payment security is clearly indicated in payment method. 33.2% shoppers choose cash on delivery and 32.6% 3rd party payment such as Taobao’s Alipay. Only 13.2% choose online banking and 11.2% mobile payment. Less than 5% pay through China Mobile payment Easyown, and 2.4% through bank transfer.
For delivery method, around 67% shoppers use privately-run courier services due to price advantage and speed of delivery, around 21% choose EMS, a service run by China Post for security and better coverage as it’s often the only option for delivery to remote regions in China.
For users not choosing online shopping on mobile phone, the leading concerns are payment security, small screen that doesn’t provide good user-experience and slow network speed. Other concerns include, heard too many negative reviews, it’s troublesome to set up mobile payment, don’t have the right resources, worry about not good at using mobile online shopping, don’t know how to set up, don’t like online shopping, and don’t know smartphone can do online shopping.
This video infographic is presented by Advangent — a digital link to your business in China. Visit us to find more at http://www.advangent.com. Thank you for watching.
Chinese B2C E-Commerce driven by Luxury Goods and Social Commerce [preview for ‘Asia B2C E-Commerce Report 2013’ by yStats.com, Feb 5, 2013]
The recent “China B2C E-Commerce Report 2013” by Hamburg-based secondary market research company yStats.com provides information about the Chinese B2C E-Commerce market. Aside from trends, it covers revenues, the share of B2C E-Commerce on total retail sales, product categories, Internet user and shopper data, as well as information about leading players in B2C E-Commerce in China.
Chinese B2C E-Commerce expected to grow by approximately 30 Percent annually over the next Years
B2C E-Commerce is gaining more and more ground in China. According to forecasts, it is expected to grow by more than 30 percent annually between 2010 and 2016. Overall, fashion, shoes and bags, as well as computers and household appliances are among the most popular product categories online. B2C E-Commerce with luxury goods is one of the leading trends. In recent years, this segment has grown more strongly than traditional B2C E-Commerce.
A growing number of Chinese residents use social networks to purchase products online. Social Commerce is expected to become even more significant in China than in the USA. M-Commerce is also gaining in importance. Between 2011 and 2012, M-Commerce grew approximately fivefold and now accounts for more than four percent of total B2C E-Commerce sales.
Amazon is only in fifth Place among Online Retailers in China
Leading Chinese online retailers include Tmall [of Alibaba Group], 360buy, Tencent and Suning.com. Amazon is only in fifth place in China, with a market share of less than three percent. In 2011, Alibaba Group’s Tmall.com generated more than 100 billion CNY [$16.3 billion] in revenue, increasing its revenue by a three-digit growth rate. Some foreign companies also try to gain a foothold in the Chinese B2C E-Commerce market. In 2012, US company Toys’R‘Us opened its first online shop in China. However, online retailers face problems with the delivery of products ordered online. Consequently, retailers such as VANCL and 360buy are currently developing their own delivery solutions as shown in yStats.com’s “China B2C E-Commerce Report 2013”.
B2C E-Commerce and M-Commerce in China are expected to continue growing by double- to triple-digit percentage figures. However, the share of Internet users who also make purchases online is still much lower than in other countries of the Asia-Pacific region such as Japan and Australia.
Study on global B2C E-Commerce trends sees more personalization and increased use of mobile devices [yStats.com press release, April 11, 2013]
A newly released study by the Hamburg based secondary research company yStats points to trends expected to affect the B2C E-Commerce market in the coming years. Online shopping is likely to become more personalized, with retailers customizing their services and integrating online sales channels such as websites and social networks on any device that will connect to the Internet. M-Commerce is expected to play an ever larger role in the future, with over half a billion customers following the trend to shop via mobile devices by 2016. Moreover, throughout the world, online shoppers are forecasted to increasingly prefer to pay online when buying over the Internet, causing the online and mobile payment markets to grow strongly, especially in Asia.
Worldwide B2C E-Commerce growth will be led by large increases in the Asia-Pacific region
As current trends continue, Asia-Pacific is expected to overtake North America as the region with the highest B2C E-Commerce sales in 2013 and to account for over a third of global B2C E-Commerce revenues. By 2016, the Asia-Pacific region’s share is likely to increase further, while the North America and Western Europe shares of world total B2C E-Commerce are expected to steadily erode. Still, in 2013 USA is projected to remain by far the largest B2C E-Commerce market worldwide. One of the major trends there is expected to be growth of M-Commerce, reflected in triple-digit growth rates of mobile payments in the years to 2016. The Asia-Pacific region’s growth is expected to be led by China, with the number of online shoppers there projected to reach almost 2.5 times the number in the USA by 2016. M-Commerce is gaining popularity in China as well, with mobile sales on total B2C E-Commerce sales projected to triple by 2015. The online sales of luxury goods such as health and beauty products, apparel and watches has led the recent surge in B2C E-Commerce in China. New delivery systems and payment methods are being implemented in that country as well, helping to tap into the great potential for online commerce.
Intense growth foreseen in other nations
The other BRIC countries, Brazil, Russia and India, are also projected to see their B2C E-Commerce markets boom in the coming years. In India B2C E-Commerce is expected to see intense growth as soon as the payment environment is improved, since the current cash-on-delivery method of payment is seen as a hindrance to growth. The growth of Russian B2C E-Commerce is driven by the increasing Internet audience, already the largest in Europe, and increased online sales are anticipated as the challenge of product fulfillment is overcome. In Brazil online shopping benefits from growing mobile Internet penetration and social commerce. In Mexico B2C E-Commerce is forecasted to grow at double-digit rates in the years to 2015, with online travel sales leading the market. Another emerging B2C E-Commerce market is Africa. Growing smartphone penetration, especially in South Africa, is expected to boost M-Commerce and mobile payment markets on the continent.
Another trend influencing worldwide growth in online sales is the concept of group buying. In the Middle East particularly, group buying and daily deals websites have boosted B2C E-Commerce. Sales of Groupon in one nation in the region were so strong last year that the vendor could not keep up with the demand.
Growth expected in travel and gaming sectors
Among other trends highlighted in the yStats report, social media are forecasted to play an increasing role in the travel segment of the global B2C E-Commerce market, by helping customers research information for a trip. Moreover, the demand for travel arrangements adjusted for use on smartphones is likely to grow. Another market segment, online gambling, is expected to undergo a change in the years to 2015, with sports betting losing some of its share to lottery and casino.
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