Group Members: Yuan Lu, Ling Zhang, Xiao Chen, Sha Ye

Agenda1.Background2.Buying Process3.Featured Functions of

Taobao4.Porter’s Five Forces5.Promotion Strategies6.Problems and

Recommendation7.Reference

Company Background● History

Founded by Alibaba Group in 2003A Chinese website for online shopping; online

auction leaderBecame the largest online shopping website in Asia

in 2006Lanuched eTao (searching engine) in 2010760 million product listings as of March 2013500 million memberships; 6 million visitors per day

● Business ModelB2C platform: www.tmall.com C2C platform: Taobao.comFree 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 ProcessStep 1: Get Taobao ID Step 2: Activate

Alipay

Buying ProcessStep 3: Search Items & Communicate with seller

Buying Process Credit rating Hearts

Blue Diamonds

Blue Crowns

Gold Crowns

Buying ProcessStep 4: Choose Payment Methods

Buying ProcessStep 5&6:Receiving

&

Feedback

Featured Functions of Taobao

Searching functions

Gallery Sales transaction volume credibility price range Locations

Tmall Second handed Auction Wangwang Online

Trade Safety Guarantee

3 times refund for counterfeits

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 StrategyAdvertising -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 invoiceLack technical innovations copied by

other counterpartsCounterfeit merchandise destroy

Taobao’s reputation

RecommendationMake use of information technology

and resourcesProvide safety and scientific systemImprove 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/martinzhang73-1637615-taobao-english/

● http://data.eguan.cn/dianzishangwu_172432.html● http://www.smejs.com/chuangyepingtai/chuangyptwschuangy

/6001477142.htm● http://www.dwastell.org/MSc/Group6.pdf

Thank you!