GROUP 3: SHIVANGI SAMADHIYA1302-149 SHRAIYANS MITTAL 1302-151 KARTIK TS 1302-166 SUNAMIKA VIG 1302-170 VAIBHAV SINGH 1302-181 VIBHU

GOGIA 1302-183 SWATI GUPTA 1302-202

Alibaba.com- An international B2B exchange that assisted small and medium enterprises.
Alibaba.com.cn- An online portal for B2B consumers for domestic trade. Alipay- Launched in 2004, it was an online, 3rd party payment platform. It offers escrow service i.e it releases the payments after the consumer affirms that he is satisfied with the product.

Alimama- It is an ad exchange portal. It is a marketplace for online advertising inventory and is similar to Google Adsense/Adwords.
Taobao :facilitates C2C retail by providing a platform for small and medium enterprises. Sellers are able to post new and used goods,either at a fixed price or for auction. By 2005, Taobao grew to have a 59% market share, while eBay fell to a mere 35% in just 2 years. Offered free listing to sellers .

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million SMEs operated in fragmented market with limited access to communication channels and information sources. was no way to evaluate the trustworthiness of the trading partner

There

Jack

Ma founded Alibaba with a group of friends in December 1998

Main proposition was to assist SME in selling their product on the Internet.

Providing a communication channel & Promoting the Product of SMEs

later, more than 32 million registered users relied on Alibabas B2B

Decade

Built

sophisticated ecosystem around its core business.

Marketing Strategy was different for free and premium users. Premium subscribers operated their own storefront which had product information, a virtual tour and Trust pass verification Alibaba assisted in building and maintaining the websites.

In 2007, company tripled its operating profits by gaining on their

international marketplace Premium subscribers paid an annual fees which comprised of 70% of the revenue. Additional sources of income were promotional placements, banner advertising, and paid keyword searches.

Taobao Marketplace is a website for online shopping similar to eBay and Amazon operating.

Founded by Alibaba Group in May 10,2003. Taobao Marketplace facilitates C2C retail by providing a platform for SMEs.

Operations in China, Hong Kong, Macau and Taiwan. By March 2013, Taobao marketplace had 760 million product listings and

combined gross merchandise volume(GMV) exceeded 1 trillion yuan.

Continually expanding the Ebay marketplace to new communities around the world. In 2003, international markets accounted for 35% of the companys net revenues. Expansion strategy involved entering into countries with a large degree of Internet penetration & computer usage. Then on case by case basis determined whether: To start from scratch Do an acquisition Enter into a partnership

Yahoo! entered the Japanese market 5 months prior to Ebay. 2 years later Yahoo! dominated the Japanese market with 95% market share. Yahoo! entered first and got the first mover advantage. Understanding the fact that there is a stigma in Asians against buying used goods, Yahoo! offered new goods. Yahoo! delivered a free auction site in contrast to Ebay where it charged 1.25%-5% commission.

Ebay entered China by acquiring market leader EachNet. Ebay relied on website usability and marketing techniques to defend its leading position. Charged Chinese sellers listing fees of up to 3 RMB & transaction fees of upto 2% of its items value. In 2005, Ebay introduced PayPal to China to help transactions close more quickly.

MARKETPLACE DESIGN:
Taobao understood the local culture , such as importance of interpersonal relationship and included services like instant messaging(AliWangWang) . Employees within taobao were asked to choose a nickname from kung fu novels and referred each other by the same reflected an attitude of informality and suited chinese consumer behaviour. The navigation on taobao was better than that of ebay. Taobaos website was very noisy and had a lot of links which was exactly how the chinese customers wanted it to be unlike ebay who stuck to the western concept of keeping it simple and clean.

Trust

To establish trust between taobaos sellers and buyers: Affect-based trust and cognition-based trust. Taobao sellers national identity card and bank information were

required at the time of registration. Taobao provided a user with rating as a seller and a different rating as a buyer by the feedback received, unlike ebay who provided a single rating for the user. Taobao introduced free of charge escrow payment service called Alipay. AliWangWang .

Fees

Ecommerce was in a nascent stage. The Chinese customers were not familiar with online marketplaces. The Chinese merchants wanted the marketplace to be free so that they could use and benefit from such service. Unlike Ebay, Taobao did not charge listing or transaction fees.

By the end of 2007, Taobao had achieved a leading position in C2C commerce in China. Ebay shut its site in 2006 & entered into a Joint Venture with TOM Online shoping hoping to stage a comeback.

Strategic Operations: Capturing the market by No Fees. Strengthening the comprehensive cooperation with banks . Building the shopping platform by associating with strong enterprises . Establishing an identifying secure trading platform. Simple and friendly Interface. Service Strategies: Taobao Wangwang Alipay

Create Trading

Buyer makes payment to Taobao through Alipay

Taobao notifies seller to send the goods

Seller sends the good to buyer

Buyer receives the goods and notifies Taobao

Taobao(Alipay) makes the payment to seller

Taobao did not charge listing or transaction fees. No revenue Model. In May 2006, Zhao Cai Zin Bao launched. It would let sellers bid for keywords , ranking paid listings and collecting a fee when a transaction related to paid listing was completed .

In china it is not the right approach for C2C platform. Reasons: A PR disaster. After three years free service, many users may complain that this new product violated Taobaos promise of free service. The main local customers are indeed sensitive to charges and pricing policy. The community is a double-edged sword. In the forum, people could expand the negative emotion very easily and largely to affect the image of Taobao.

Up to 100 shopkeepers who use Taobao.com in Chongqing have signed a petition against Zhao Cai Jin Bao The group accused Taobao.com of charging hidden fees. Threatened to boycott Taobao Angry owners even form "anti-Taobao" groups online in protest. Then, 32 days after the announcement of Zhao Cai Jin Bao, on 2006, 6, 21, Alibaba announced the termination of Zhao Cai Jin Bao

STRENGTHS
Second largest Chinese retailer. Full understanding of Chinese culture and economic behavior. The use of AliWangWang. Own 84% of market share. More than 55 million registered users. Connect with reliable payment method .

WEAKNESS
Increasing disputes and frauds between buyers and sellers. Not generating large revenues with the current business model. The trading models of Taobao are easily being copied.

OPPORTUNITIES
China has the worlds largest population.

China will likely have the largest population of online shoppers by 2015.
Fastest growing and emerging economy in recent years. Priority of the Government to encourage and promote technology. Increasing demand for e-commerce.

THREATS
Fierce competition. Threat from replacement. Hit by economic crisis. Price war.

Restructuring of Taobao: Taobao Marketplace Taobao Mall eTao The move would provide three entry points for online shopping and enable the company to provide a more nuanced and diversified shopping experience.