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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
Searching functions
Gallery Sales transaction volume credibility price range Locations
Tmall Second handed Auction Wangwang Online
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 Strategy
Advertising -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