taobao.
com
Reinventing (E-)Commerce
strategyzer.com/vpd
Taobao, part of the
Alibaba Group, is Chinas
largest online shopping website.
Here follows the three-act
story of its evolution since
it began in 2003.
1
Platform-building from
the ground up
With a growing middle class and
Internet connectivity, Taobao sees
an opportunity to boost commerce
by connecting Chinese consumers
and sellers online.
But lack of trust and a largely
missing infrastructure create
challenges
Get pa
Instant id 100
Acces, of the %
use times
at I es
tly w h
t respons
Exac ant Fa s
w
Highes
t price
el l n e w and
S ods
e d g o
us
High P
rices
Find a
nd
n t process
o ods Ca nts
Low qua i re g payme
lity acqu
o
or a ccess t
st Non-e Po ers
Lack of Tru xiste custom
logisti nt
infrast cs
ructur
e
Chinese Chinese
consumers sellers
Taobao first focuses on creating
trust and on building the missing
infrastructure
taobao.com
Expres
s
logisti
cs
provid Developing
ers
commerce
infrastructure
Banks & Alip
ay
Two-way review
system
to create new value propositions
for consumers and sellers alike.
taobao.com
Web Retail with
Expres
s best price/
logisti
cs quality
provid Developing Online
ers
commerce customer
infrastructure service
Banks & Alip Retail sales
ay
platform
Two-way review
system taobao.com
IT
Infrastructure 0.- (subsidized
development by Alibaba)
2
Shift towards micro-
entrepreneurs
Sellers discover an opportunity to
create a business and become
micro-entrepreneurs with a set of
business-like jobs, pains and
gains.
Get pa
id 100
of the % Repea
times
nized custom t
re sp o nses Recog ers
Fast brand
Sell pr
oducts
Highes
t price Easy a
e l l n e w and dmin
S ods
e d g o
us
a livi ng
Make
b u s iness
n t p rocess N o
ence
Ca nts experi sion
payme Fu l fi l l a pas
o
o r a ccess t aking
Non-e Po ers Not m oney
xiste custom hm No cus
to
logisti nt enoug knowle mer
infrast cs dge
ructur
e
Chinese Micro-
sellers entrepreneurs
Sellers become
micro-entrepreneurs
taobao.com
Online
customer
Web Retail with service
Expres
s best price/
logisti
cs quality
provid Developing
ers
commerce
infrastructure
Banks & Alip Retail sales
ay
platform
Two-way review
system taobao.com
IT
Infrastructure 0.- (subsidized
development by Alibaba)
Taobao shifts focus, adds
service providers and adapts its
value proposition
taobao.com
Help Online
entrepreneu customer
rs Web Retail with service
Expres succeed
s best price/
logisti
cs quality
provid Developing
ers
commerce
infrastructure
Banks & Alip builssinaelesss
GroRweta
ay
platform
App developers
+ fashion
models Two-way review
system taobao.com
IT
Infrastructure 0.- (subsidized
development by Alibaba)
and creates revenue streams to
turn a profit for the first time.
taobao.com
Help Online
entrepreneu customer
rs Web Retail with service
Expres succeed
s best price/
logisti
cs quality
provid Developing Training &
ers
commerce empowerment
infrastructure
Banks & Alip builssinaelesss
GroRweta
ay
platform
App developers
+ fashion
models Two-way review
system taobao.com
Premium for
advanced sh
op
IT
Infrastructure 0.- (subsidized features
development by Alibaba)
Ads
3
Growing audience is
basis to new business
Access to millions of Chinese
consumers becomes the basis of a
new value proposition to a new
customer.
Reliable
shopping
engine
Reach Chinese
Sales statist mass-market
ics
Grow sales
Customer
Harsh Develop brand
acquisition cost competition loyalty
Effort to
establish
presence
Big Brands
Millions of consumers
become a precious asset
taobao.com
Help Online
entrepreneu customer
rs Web Retail with service
Expres succeed
s best price/
logisti
cs quality
provid Developing Training &
ers
commerce empowerment
infrastructure
Banks & Alip builssinaelesss
GroRweta
ay
platform
App developers
+ fashion
models Two-way review
system taobao.com
Millions of
Chinese
consumers
Premium for
advanced sh
op
IT
Infrastructure 0.- (subsidized features
development by Alibaba)
Ads
Taobao leverages this asset
for a new value proposition
taobao.com
Help Online
entrepreneu customer
rs Web Retail with service
Expres succeed
s best price/
logisti
cs quality
provid Developing Training &
ers
commerce empowerment
infrastructure
Banks & Alip builssinaelesss
GroRweta
ay
platform
App developers
+ fashion
models Two-way review
system taobao.com
Millions of
Chinese One stop
consumers presence
Premium for
advanced sh
op
IT
Infrastructure 0.- (subsidized features
development by Alibaba)
Ads
to a new lucrative
customer (big brands).
taobao.com
Help Online
entrepreneu customer
rs Web Retail with service
Expres succeed
s best price/
logisti
cs quality
provid Developing Training &
ers
commerce empowerment
infrastructure
Banks & Alip builssinaelesss
GroRweta
ay
platform
App developers
+ fashion
models Two-way review
system taobao.com
Millions of
Chinese One stop
presence
tmall.com
consumers
Premium for
Membership
advanced sh
op fees
IT
Infrastructure 0.- (subsidized features
development by Alibaba)
Ads 2-5% of sales
Lessons Learned
Taobao created three
dierent types of
business models
(and value propositions)
in just ten years.
?
2008:
Big B2C
2006:
Small B2C
2003:
C2C
Watch evolving context on
platform and in wider
economy and society
Develop capability to
reinvent by responding
to changes with new
business models and
value propositions
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