Analysis on the Success of Taobao

2874 Words Jul 3rd, 2011 12 Pages
ISBN 978-952-5726-00-8 (Print), 978-952-5726-01-5 (CD-ROM) Proceedings of the 2009 International Symposium on Web Information Systems and Applications (WISA’09) Nanchang, P. R. China, May 22-24, 2009, pp. 202-205

Analysis on the Successful Strategies of Taobao’s E-Commerce
Yang Lixia 1, Liu Xun 2
College of Arts, Hebei University of Engineering, Handan, China Email: claireyang123@yahoo.com.cn 2 College of Mechanical Engineering, Hebei University of Engineering, Handan, China Email: cnliuxun@yahoo.com.cn
Abstract—The improvement and the development of internet technologies have triggered the rapid development of E-commerce applications since 21st century. A number of E-commerce sites have been rising in China. But with the bursting of the
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III.

TAOBAO’S SUCCESSFUL STRATEGIES

Taobao can be the top of E-commerce market in just two years, people may think it lies on the characteristics of the Internet economy, but the most important is its effective business strategies, including operation strategies and service strategies. A. Operation Strategies 1. Capturing the market by No Fees In order to create brand, Taobao made a plan that it wouldn’t receive any charging transaction fees and
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listing fees in the first three years. Taobao believes that only allows users to get real benefits in online transactions, and then there will be more loyal network dealers. With this belief, Taobao captured the market rapidly and took more than 60% market share in two years. Free is a huge investment, it reduces the threshold of personal transactions and protects the interests of both sides [3]. 2. Strengthening the comprehensive cooperation with banks On October 27, 2003, Taobao and Zhejiang branch of ICBC (the Industrial and Commercial Bank of China) signed a comprehensive cooperation agreement, which is a guard against default and fraud. It reflected the integrity of online transactions and payment. The mode of payment and settlement on the online bank was born. This is a new mode which puts the bank intermediaries into the Internet and E-commerce, and it creates a precedent on the national credit guarantee cooperation. The introduction of this service has greatly increased the users’ confidence on

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