Taobaoa “indispensable e-commerce platform in China”

Taobao has established itself as an “indispensable e-commerce platform in China” and a market leader.

Figure1 : Taobao App and online: Fran Lu, All right reserved


Taobao, which means “finding treasure” in Chinese, is a Consumer-to-Consumer (C2C) and Business-to-Consumer (B2C) e-commerce marketplace founded by the Alibaba Group in 2003. It provides a platform for people and small businesses to sell their products online through their own “stores.” Besides, Taobao is often referred to as the China Amazon or eBay, but it far outperforms them. It is the world’s largest e-commerce website, as well as one of the top ten most frequented websites. With over 600 million monthly active users and about 60% of e-commerce revenues, it is by far China’s largest e-commerce site. Most Chinese, as well as an increasing number of Asian and global users, utilize it (TRADE ON TAOBAO, 2021).  

What is Taobao  ? 

Alibaba has become China’s largest e-commerce platform and Internet firm. “In May of 2003, Taobao was launched.”Hundreds of millions of people use it, and millions of merchants and companies utilize it.” The most well-known is Taobao. That is, it takes advantage of the

“Alibaba coffee” by Charles chan * is licensed under CC BY-ND 2.0

 Internet’s benefits to give people a shopping platform, encouraging merchants to utilize the Taobao platform to market their items and entice consumers to buy. Because it has increased people’s spending pace, the emergence of Taobao has considerably expedited the growth of China’s economy (Smith, 2020).




History of Taobao 

Jack Ma saw the uniqueness of e-commerce and the future impact of the Internet, so he decided to build a platform that would integrate online communication with e-commerce. Jack Ma, the creator of Taobao, discreetly dispatched a small team of nine individuals to dwell in a decrepit residential property in April 2003, and they signed a non-disclosure agreement to improve it day and night for a month. Finally, on May 10, 2003, Taobao was officially opened (Smith, 2020). The platform’s more than 200 “commodities” were all unused objects brought in by numerous technicians. People began to pay attention to this site and began to post their own content. Taobao had its 10,000th registered user twenty days later. (Lajoie & Shearman, n.d.)

Without a doubt that in the early days of its existence,

Ma Yun (Jack Ma), CEO of, speaks during a press conference in Beijing on November 9, 2005.

Taobao faced numerous uncertainties and regulatory problems. Established e-commerce sites like e-bay and Amazon stifled Taobao. “Traditional trading methods are still the primary trading strategies in the retail sector,” according to  Purnomo (2018). Traditional purchasing techniques can provide a more direct understanding of the goods, allowing buyers to directly experience it without putting their credit cards at risk. It also prevents loss and damage caused by customers who find the items to be different from what they expected after getting them. In order to assuage customer concerns, Taobao collaborates with express companies, banks, and when merchants apply, the supervisory department will intervene, and the multi-party collaboration will jointly protect consumers’ rights.

Figure3:CEO of, speaks during a press conference in Beijing on November 9, 2005.  : 2021 INEWS , All right reserved

Is it successful? 

  1. “Taobao is the largest retail circle in the Asia-Pacific area,” according to Ma (Zhang& Ma, 2015), who is working to create a global e-commerce platform. Taobao’s business currently includes both C2C and B2C transactions. According to statistics, the number of individuals registered on Taobao accounts for the majority of Chinese online shoppers, and transaction volume accounts for more than 80% of the Chinese online shopping market’s turnover (Lajoie & Shearman, n.d.).
  2. “Taobao gained Asia’s largest shopping website in 2006.” Taobao began to transform people’s lifestyles in this year”, and making the Internet not only a technology but an essential aspect in people’s daily lives. Taobao is used by 299 million individuals every day, according to the report. (Krokou, 2019).
  3. Taobao, the e-com
    merce site owned by Alibaba Group still has a position in the market and stands out amid so many other highly competitive e-commerce platforms. According to 80% of all internet purchasing in China. The number of daily users on the site surpassed 299 million in 2019 (Lajoie & Shearman, n.d). 
Figure 4 :A vivid picture depicting online shopping : Gemius S.A. , All right reserved











The unique business model

Its business model is really the foundation for its achievement. The business model is a three-dimensional system that forms “value for consumers, corporation resources and competencies, and revenue techniques” ( Kaplan, 2012). 

The Taobao network’s goal is to enable all merchants, regardless of their size or whether they are self-employed, to engage in 2C and zero-cost transactions. Taobao has evolved into a digital marketplace, linking people who want to gain from their items with those who need to purchase. In contrast to typical company models that spend the majority of their money on rent, “zero cost decreases the threshold for consumers to undertake personal online transactions” (Mourya & Gupta, 2015). It’s a safeguard to protect both parties interests in contemporary internet transactions. 

Figure 5: A cartoon picture of Alibaba form :ChangYueSin. , All right reserved

The Internet’s economic model also follows the principle of a fair market, which aims to “prevent huge corporations from stifling the growth of self-employed individuals.” (Chapter 8, Mackey, 2015) Taobao has implemented a customer rating system. Customers will be invited to participate in the product evaluation system once the transaction is finished, which covers the seller’s product conformance, contentment, and seller attitude. This information will be used by Taobao to assess the sort of credit the merchant has and to give prospective consumers reference information. The system of evaluation is two-way. Taobao will also allow vendors to assess the creditworthiness of its consumers (Mackey, 2015).

The unique techniques Taobao offers 

-Customers can use the evaluation to assess the trustworthiness of other users’ comments and build a mutually trusted buying process. 

-Customers can easily locate the goods they need if you “categorize the same or comparable products and give connections”.  

-Customers may also send their friends the item’s URL. There is a matching comparison platform for related or similar items. 

-Customers may restrict their options by specifying brand, kind, price, and other criteria, and rapidly locate more trustworthy vendors and cost-effective options (Qin, Xiao & Qin. 2012). 

Figure 6:Girls daily: Stay home baking party, Taobao makes buy Items More Easily:Rachel, All right reserved

How does Taobao make money? 

Taobao offers an additional service—Alipay as part of the payment procedure. Alipay not only makes money from merchants and marketers, but it also makes money for Taobao. When you link an Alipay account to a Taobao account, an Alipay account will be created when you apply for a Taobao account. Customers send money to Alipay, which is temporarily held by a third-party platform, and the “secured transaction mode” is used to increase consumer trust in Taobao purchases. The buyer’s money must be temporarily kept in Alipay, and the payment will be verified to the seller once the items have been received (Wan, 2014).

“Alibaba” by osde8info is licensed under CC BY-SA 2.0

According to this, shops and Taobao platforms will not be paid, ensuring that customers’ rights are protected and online transactions are more secure. Furthermore, since payments in an Alipay account cannot be transferred immediately to a bank statement, many sellers have large sums of money in their Alipay accounts, which has a significant impact on the “turnover rate of funds” ( (Ma, Zhang& Ma, 2015). Alipay’s massive deposit funds give Taobao a significant amount of cash flow, allowing it to become profitable.

Some concern 


Merchants may lose out on potential chances due to a lack of timely communication with customers when using online payment between merchants and consumers( Zhang& Ma, 2015).

Product quality:

Customers’ most prevalent issue with internet buying is that there is

Figure 7:Receiving a package at home from a delivery guy: Souhu, All right reserved

no guarantee of product quality. More fraudulent vendors are enrolling on these platforms and selling low-quality or fake items in the name of authentic and branded products (Prachi, 2018).  

Logistics-related problem:

Issues with shipping and logistics are a common concern with online buying. While in transportation, products are frequently lost or damaged, and order tracking systems are unable to correctly identify the goods (Prachi, 2018).



Taobao is a Chinese revolution that has impacted people’s lives. It gives customers a free transaction platform and gives businesses and micro-celebrities a lot of options. It has also altered China’s economic model, allowing the country to quickly expand into a major e-commerce trade nation. Taobao dramatically altered China, causing a revolution in the country.




Reference List:

 Kaplan, S. (2012). The business model innovation factory how to stay relevant when the world is changing . John Wiley & Sons. 

Krokou, D. (2019). Entering the Chinese emerging market (First edition.). Business Expert Press. 

Lajoie, M.& Shearman, N. (n.d). What is Alibaba. Retrieved from: 

Limited, M. T. P. (2018). {twitter.title}. MyAdvo.In.

Ma, Q., Zhang, W., & Ma, Q. (2015). Public mood and consumption choices: evidence from sales of Sony cameras on Taobao. PloS One, 10(4), e0123129–e0123129. 10.1371/journal.pone.0123129 

Mourya, S., & Gupta, S. (2015). E-commerce . Alpha Science International Ltd. 

Smith, C. (2020). 30 Taobao Statistics and Facts (2020) | By the Numbers. Retrieved from:

TRADE ON TAOBAO. (2021). What is Taobao? http:/

Wan, M. (2014). The China model and global political economy: comparison, impact, and interaction. Routledge