Taobao
Taobao is a Chinese online shopping platform. It is headquartered in Hangzhou and is owned by Alibaba. According to Alexa rank, it was the eighth most-visited website globally in 2021. Taobao.com was registered on April 21, 2003 by Alibaba Cloud Computing Co., Ltd.
Taobao Marketplace facilitates consumer-to-consumer retail by providing a platform for small businesses and individual entrepreneurs to open online stores that mainly cater to consumers in Chinese-speaking regions and abroad, which is made payable by online accounts. Its stores usually offer an express delivery service.
Sellers are able to post goods for sale either through a fixed price or an auction. Auctions make up a small percentage of transactions, whereas the majority of the products are new merchandise sold at fixed prices. Taobao users usually read feedback and compare items from multiple shops. Taobao's popular payment platform is Alibaba's Alipay.
As of at least 2024, it is the world's most popular shopping hub as measured by gross merchandise value.
History
Before its launch of Taobao, Alibaba had focused on online business-to-business wholesale sales.In 2003, eBay acquired Eachnet, China's online auction leader at the time, for US$180 million. It became a major contender in the Chinese consumer e-commerce market.
Responding to eBay's moves Alibaba launched Taobao as a rival consumer-to-consumer platform. To counter eBay's expansion, Taobao offered free listings to sellers. It introduced instant messaging for facilitating buyer-seller communication and an escrow-based payment tool: Alipay. Taobao's focus on institutional trust building mechanisms like escrowing payments became a major reason for its success in the market for eBay, despite eBay's first-mover advantage. Taobao became mainland China's market leader within two years. Its market share grew from 8% to 59% between 2003 and 2005, while eBay China dropped from 79% to 36%. eBay shut down its Chinese site in 2006.
In 2008, Taobao established a platform rule providing that customers had the right to return clothes sold on the platform within seven days of receipt without cause, and subsequently expanded the rule to cover other commodities. This rule became an influential standard in Chinese e-commerce and in 2014 was made an industry standard through the State Administration for Industry and Commerce's Administrative Measures for Online Trading.
In October 2010, Taobao beta-launched eTao as an independent search engine for online shopping to provide and merchant information from a number of major consumer e-commerce websites in China. Online shoppers would be able to use the site to compare prices across sellers. According to the Alibaba Group web site, eTao offers products from Amazon China, Dangdang, Gome, Yihaodian, Nike China and Vancl, as well as Taobao and Tmall.
In June 2011, Jack Ma, executive chairman and former chief executive officer of Alibaba Group, announced that Taobao would split into three different companies: Taobao Marketplace, Tmall.com, and eTao. The move was said to be necessary for Taobao to “meet competitive threats that emerged in the past two years during which the Internet and e-commerce landscape has changed dramatically.”
In 2012, Taobao began to accept international Visa and MasterCard credit and debit cards.
On April 29, 2013, Alibaba announced an investment of US$586 million in Sina Weibo. According to Reuters, the deal “should drive more web traffic to Alibaba's Taobao Marketplace”. On August 1, 2013, Alibaba launched Weibo for Taobao, which allows users to link Sina Weibo accounts with Taobao accounts.
In addition to hosting individuals and businesses, Taobao includes online stores for courts, customs offices, state-owned banks, and asset management companies selling distressed assets. By early 2014, more than 500 local Chinese courts had established Taobao store fronts to sell seized property, including property which had been confiscated as part of the anti-corruption campaign under Xi Jinping.
Features
Shop feedback
A good way to investigate a Taobao shop is by clicking the shop's rating icon. For Tmall.com shops, people click the stars to view their ratings. Taobao users usually read feedback and compare items from multiple shops. Feedback can be genuine or artificial, requiring users to make their own judgments. Feedback can be posted by competitors.Every trade deal includes a section of customer feedback. Shop owners often put effort to maximize positive comments. Negotiations may happen between sellers and consumers over their satisfaction ratings.
Taobao uses search tools and other functions to understand user demands. Customers are asked to complete surveys that ask:
- Obstacles encountered
- Advice and reviews
- Use frequency
- Importance of that particular product
- Satisfaction levels about specific aspects, including visual and typographic layout, procedure and instructions
- Overall satisfaction
Other features
In March 2010, it introduced the Taobao Data Cube platform, which gives small businesses access to its aggregate consumer transactions data for insight into industry trends.
In June 2010, it partnered with Wasu Media Internet Limited to launch Taohua, a digital entertainment products platform, and interactive digital television shopping, that are operated by a joint-venture formed by the two companies.
Weitao
Weitao is a private shopping assistant/blog for Taobao/Tmall customers. It is a micro-blogging feature for brands and merchants on its e-commerce sites Taobao and Tmall.Taobao General Code
Taobao has developed an extensive set of rules and a constitution which it terms the "General Code". The General Code consists of 6 chapters and 31 provisions prescribing the basic access requirements and obligations of users, seller obligations, and the platform's conflict resolution mechanism.When Taobao proposes a rule change, all buyers and sellers with a sufficiently high Zhima credit score can vote and express their opinions on the rule. Taobao also invites professionals and academics with relevant expertise to public evaluate proposed rule changes in order to inform voters.
Public jury
Alibaba established its public jury dispute resolution system in 2012. By 2020, it was a widely used dispute resolution tool on the main Taobao platform and was also frequently used on Xianyu.Through the public jury process, Taobao randomly selects panels of 13 jurors from a pool of 4 million volunteers. Candidates must have been on Taobao for at least a year and have sufficiently high Sesame Credit ratings. Volunteers earn experience points that can earn virtual titles and which can be "spent" for Taobao to make a donation to charity.
All participants in the public jury process are anonymized and no communication between or among the disputing parties and the jurors are permitted. Jurors review the case and vote within 48 hours. The party with the most votes wins. A party who is unsatisfied with the jury outcome can request further review by Taobao employees. Taobao can implement jury decisions through means including freezing payments, taking money from a sellers' store deposit, lowering user ratings, or removing a party from the platform.
Most public jury cases involve buyer-seller disputes. In some instances, Taobao has used large juries of 800 to 1000 jurors to decide issues relating to platform governance. For example, Taobao used a large jury to decide whether to allow a baby bottle manufacturer, Betta, to remain on the platform. Betta was a legal but copycat style product of the popular Japanese brand Doctor Betta, which was also sold on Taobao. Jurors voted to remove the copycat product from the platform.
Golden Cudgel
In 2019, Taobao launched a dispute resolution called Golden Cudgel, named after the monkey king's magical weapon in the 16th century novel Journey to the West. This mechanism allows sellers who have passed qualifying exams to remove a limited number of malicious reviews on a daily basis without prior permission from the platform. Sellers must submit evidence to establish the dishonest nature of each removed review to enable review by the platform. Sellers' ability to use the Golden Cudgel mechanism is revoked if they are found by the platform to have repeatedly removed reviews improperly.Services
Alipay
Launched in 2004, Alipay is an escrow-based online payment platform. It is the preferred payment solution for Taobao Marketplace. It is the most widely used third-party online payment solution in China. To ensure safe transactions, Alipay uses an escrow system through which payment is only released to the seller once the buyer has received goods in satisfactory condition. According to the Alibaba Group website, Alipay partners with multiple financial institutions as well as Visa and MasterCard to facilitate payments in China and abroad.At the time it was implemented, the mandatory escrow feature of Alipay was a major institutional innovation for e-commerce platforms. This was a major reason Taobao was able to outcompete eBay/EachNet in the Chinese market.
Alipay systems are separate for different groups of users. For instance, Alipay users may send and receive funds if they have an account that have a credit card issued in China, whereas users with other cards may only use Alipay to pay for goods or services from Taobao. This has proven problematic for international users, as they are unable to receive refunds not issued via the Taobao system.