Unemployed? Open an online store on TaoBao.com…


It’s challenging to find a job during a recession time. In China, some local governments encourage people to start a new career in electronic commerce, and they provide e-commerce training to retool interested people. Recently iResearch group in China reported the Chinese C2C giant TaoBao.com created 570,000 positions in 2008, which equals the total of newly gained positions in the Shanghai city, the biggest Chinese city, in the same year.

What is TaoBao? TaoBao is an EBay in China. More accurately, it is an EBay’s local competitor which won the competition with a C2C market of more than 80% in China. Because of the sweeping success of TaoBao, EBay quit the China market in 2006. According to alexa.com, TaoBao is the 47th most visited website globally and the 5th in China.

I saw the appeal of TaoBao last summer when I shopped for baby clothing in my hometown, Hangzhou, a middle-sized Chinese city—it should be noted that TaoBao started from my hometown, :). The baby clothing store I went was very small, and I would have never been able to find this store if my mom hadn’t shown me, who also heard it from her friends. It was on the back street hid in buildings, and the store sign would not catch one’s attention, either. We were attracted because they had old-fashioned cotton-made baby clothing that was hard to find in trendy baby stores. While searching for baby items, I was concerned about how this store would survive because my mom and I seemed to be the only two customers there. Then the postman came to answer my question. He was picking up UPS packages from the store owner. At that point, I noticed that the middle-aged female owner had been busy working on an old computer with an old CRT monitor while we were searching for bargains. From their conversation, I knew that she opened an online store on TaoBao, and it seemed that her online business was pretty good—WOW, I was surprised. Would a small mom-and-pop shop on a back street in an American town have both the online and physical store fronts? Just think about that, while the dot com economy was booming in the US, the Internet was not available to the public in my hometown. Back in 1996, I had to travel thousands of miles to go to Shenzhen, a southern Chinese city near Hong Kong, to learn how to use the Internet and enjoy affordable net surfing service for the first time.


People might wonder why EBay lost in this e-commerce competition. The first issue of Communications of the ACM in 2009 has an interesting article which discusses the “Glocal Advantages” TaoBao has over EBay in China (Ou & Davison). As an indigenous e-commerce site, TaoBao understands Chinese consumers’ concerns about Internet fraud, and it particularly designed interface features to help build “swift trust” between buyers and sellers. For example, there is an icon below the product picture to show whether the seller is online or not, and if the seller is online, the buyer can use the embedded instant messaging application to communicate to the seller right away including voice chat. Users reported this system is more trustworthy than the rating of sellers.

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