Comparative Ebay and Taobao

3114 Words Aug 12th, 2010 13 Pages
A Comparative Study between eBay and Taobao in Chinese Online Auction Market

BSAD 415:66 Electronic Business

Prof. G. Trites

Jie Yue (Kathy)

200706289

June 10, 2008

1 Introduction

Being the largest online trading company, eBay has launched websites across the world, including thirty other countries in addition to its original U.S. website. China, with its large online market, is one of these countries. In 2003, after its cooperation with Eachnet, the first C2C online company in China, eBay became the largest online trading company in China, controlled 90 percent of the Chinese C2C market (Zazaian, 2006). The success continued until Taobao, a completely free online C2C platform, established in China by the
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Also, eBay has lowered listing fee a lot since 2005, but this didn’t slow down Taobao’s growth. Therefore, free listing is not the key reason for Taobao’s success. Indeed, feeling they are benefiting, customers may even willing to pay.

Target Market

The first action for both eBay and Taobao in China is to identify their target markets. When eBay launched in China, it identified its target customers as those “well educated, familiar with the Internet, earning a monthly payment over 3,000 RMB, and 20-40 years old” (Chen et al., 2007). Indicated by Shixiong Wu, CEO of eBay China, these mainstream customers are very important to eBay as they help with the healthy growth of electronic market (as cited in Chen et al., 2007). On the other side of the Chinese online market, Taobao decided to focus on Chinese customers who are between 20 and 30 years old with good education levels, after analyzing China’s C2C market for four months. They believe that in a decade, these online shoppers will become mainstream consumers who will influence the buying habits of the whole country (Alibaba, 2006). Comparing the target markets of eBay and Taobao, it is clear that though they all target at young people, Taobao’s target market is much broader and includes students, while eBay’s target customers are professionals who have salaries. Shown by the survey results, in 2007, student buyers made up a quarter of all customers,

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