taobao V.S. e-bay

Taobao is an online auction website in China. It was established in 2003 and it stars with the basic C2C business. Taobao achieved a total trading volume of $29 billion in 2009. It occupied about 83% market share on China’s online business industry. More and more organizations have cooperated with Taobao which in order to expend their trading domain. For example, some clothing brands set the flagship stores on Taobao and they offer a wide range of product which is basically everything available in a real shop. I bet we all have online shopping experiences. Please recall those experiences, have you ever experienced that you went to an online clothing shore but there was only limited collections and they were always the worst styles.




When taobao first started its business, no one holds optimistic opinion and many insiders predicted that taobao will not survive for 18 months. E-bay uses its existing advantage to crack down taobao in the first place. E-bay made agreement with Sina, Tom, Sohu and other major portal websites which restricts these websites from cooperating with taoao. Whereas taobao is compelled to publish its advertisements on personal website. The turnaround of taobao occurs in 2005, Sina terminated the cooperation with e-bay since Sina established its own B2C website, and meantime, taobao pushed series promotions that based on a hot movie in 2005 called ‘A World without Thieves’. Millions internet users get to know taobao and started the trial.


As online auction website, e-bay is obviously the reference of taobao. The initial operations of taobao were quite similar with e-bay, however, it keeps modifying the operation model to adapt the local market in China. For instance, e-bay charges sellers while they displaying merchandise and buyers shall be collected some rates while they paying by Pay-Pal. But before 2005, the traditional marketplace was still the dominated shopping model in China. If taobao follows exactly the same model as e-bay, there would be very few brave people who would like to try that new way.

Bargaining is traditional phenomenon in China even in online shopping. Taobao create a instant chat tools called ‘taobao Wangwang’ to satisfy the needs. Sellers and buyers are able to communicate with the application. Therefore, the consumer satisfaction has further improvement.  

screenshot of taobao

taobao Wangwang- the instant chat software created by taobao