The Most Famous Online Shopping Website In China Marketing Essay

The Most Famous Online Shopping Website In chinaware Marketing EssayAbstractTaobao is the most famous online shop website in chinaware. It was launched in 2003 and within two years it became the loss leader of chinawares online shop market. In order to throw the leadership position in increasingly trigger-happy aspiration and sustain its reading, Taobao needs to modify and better its strategies for coming(prenominal) development. Further more, its merchandise strategies can overly provide a good example for other online shopping companies. This essay is going to make an overall epitome on Taobaos personal line of credit strategies by bone up.Key words Taobao marketing strategies SWOT analysisContent1. Introduction 32.1 Leading position in Chinas online shopping market 42.2 Effective combination of diversified offerings 42.3 little market positioning 53.1 Limiting itself to topical anaesthetic market 63.2 Insufficient screen process to operate on counterfeit product s 64. Opportunities 74.1 Growing demand for online shopping in China 74.2 regimen donjon 74.3 Safer compensation systems for online proceeding 75. Threats 85.1 first base entry barrier leads to fierce competition 85.2 Strict insurance policy for third parties pay license 85.3 Higher logistics costs 86 Conclusions 9Bibliography 101. IntroductionTaobao operates a website, Taobao.com which is the largest Internet sell website in China. According to its website the transaction ledger on Taobao (gross merchandise volume or GMV) exceeded RMB200 billion (US$29 billion) in 2009. Taobao launched in 2003, is owned by Alibaba Group, which is a family of Internet-establish businesses. (Taobao, n.d.) Taobao provides not only online platforms but also third- companionship online wages operate (Alipay) and instant messaging services (Aliwangwang)Platforms within Taobao include Alimama (alimama.com), an online advertising commute and affiliate network for publishers in China. In addition , there is also a classified listing website Koubei.com. (ibid.)SWOT analysis, according to Philip Kolter, is an overall evaluation of a companys strengths, weaknesses, opportunities and threats. (Kolter, 2003)As the competition in the online shopping market is becoming increasingly fierce, Taobao faces some problems as well. The purpose of this SWOT analysis is to provide a critical review of key factors that may slow down Taobaos future development.2. Strengths2.1 Leading position in Chinas online shopping marketTaobao is an acknowledged leader in twain B2C (business to con spunker) and C2C (consumer to consumer) online shopping market in China. Taobao has (should be had) more than 190 million registered mappingrs by (could use at) the end of April, 2010. (Taobao, n.d.) It has built a strong brand and is recognised by more Netizen (which is defined as the Chinese population who perk up accessed the Internet in the past 6 months by China Internet Network Information Centre) (CN NIC. 2008, January fifteenth). The company is respected by customers which give births Taobao more advantages in competition.2.2 Effective combination of diversified offeringsTaobao combines its tercet segment businesses in effect(p)ly to enlarge its customer base. Take Alipay as an example, it is a third-party online payment platform, provides a simpler, efficient and safe payment service for both customers and vendors. This service not only ensure (should be ensures) the transaction gage but also reduces the transaction risk for online consumers, as it enables buyers to confirm the superior of goods before releasing funds to sellers. For example, if goods are found (to be) broken or fake, customers can request Alipay to postp superstar the release of funds to sellers. (Taobao, n.d.) This service serve well (should be swear outs) Taobao (to) attract more customers.In addition, an instant message (could use messaging) service called Aliwangwang make (should be makes) the co mmunication between (the) buyer and seller easier. Moreover, this service enables (the) buyer and seller (to) have a directly secret bargain during the transactions, which is the preference of Chinese customers.2.3 Precise market positioningTaobao study Chinas online shopping market at the beginning of its business. Different from other online shopping websites which prefer older white-collar worker(s) with higher salaries or people who wish well collecting and sharing, Taobao chose fashionable younger females as the target customer. This market positioning proved more suitable for Chinas market compared to other websites (apostrophe not needed) . This is one of the reasons that the egression rate of Taobao is much higher than other competitors.3. Weaknesses3.1 Limiting itself to local marketThe design of Taobao website and other supporting services were based on Chinas local market. This localisation strategy made Taobao grew (should be grow) fast at the beginning. However, wit h the development of the website, this strategy limits Taobao to the Chinese market and (, therefore resulting in a) deprivation of presence in (the) global market.3.2 Insufficient screen process to control counterfeit productsAlthough Taobao has taken some measures to control the sale of fake goods, such as rating the sellers by credit value, the result was not as expected. Because of the free strategy that Taobao used, individuals can establish an online shop easily without heraldic bearing and requirement. This makes it even hard to monitor and select sellers that commit fraud. Lack of effective screening processes to control the sale of counterfeit products has had a negative settle on customers confidence in Taobao. It could also affect Taobaos brand learn and sales.4. Opportunities4.1 Growing demand for online shopping in ChinaAccording to CNNIC, the procedure of online buyers reached 87.9 million by June 2009, increasing from 74 million in 2008 and 46 million in 2007. T he online shopping penetration rate achieved 24.8% by June 2009. (CNNIC. 2010, January 15th 2010, July 15th) As the data above shows, more people in China prefer to buy products online. Convenience and various choices could be two important reasons. This increasingly growing demand for online shopping contributed to the growth of Taobao.4.2 Government supportAfter the global financial crisis, (the) Chinese government provided a RMB 4 trillion stimulus package in order to boost the national economic growth through 2010. (the) IT industry received around 0.5% to 1% of the cash injection. (Xinhua, 2008). This gave online shopping companies strong support for future developments.4.3 Safer payment systems for online transactionsThe improved online payment systems play an important role in the growth of Chinese online shopping markets. There are more flexible payment systems for customers to choose. For example, a third-party online payment system ensures the security of transaction(s) and enables customers to get their refunds easily. A simpler and safer payment for online transaction(s) attracts (should be attract) more customers.5. Threats5.1 Low entry barrier leads to fierce competitionBecause of the low entry barrier and fast growing market, Taobao meets legion(predicate) challenges, particularly in the face of increased competition from new market entrants. In addition, without many technical difficulties, it is easy for other competitors to copy Taobaos business pattern. Therefore, Taobao forget be forced to increase investments on advertising or scientific grounding.5.2 Strict policy for third parties payment licenseRecently, Peoples Bank of China issued an Administrative Measures for the Payment Services Provided by Non-financial Institutions which has raised the entry type for third payment party. In order to get (could use obtain) and keep the license, Taobao has to increase its expenditure on online payment.5.3 Higher logistics costsTaobao testa ment give customers suggestions about the logistic companies which are mostly local third party logistics providers and customers usually take the suggestions because of the lower delivery prices these companies offered, compared to other international press out companies, such as DHL and UPS. However, local third party logistics recently announce that they would raise the price. As most online customers are highly prices sensitive, this will have a negative effect on Taobaos sale.6 ConclusionsAccording to the SWOT analysis, although there are some drawbacks which have negative effects on Taobaos future development, the advantages still outweigh the disadvantages. In addition, there are many opportunities for Taobaos further growth. This conclusion will give some suggestions for Taobaos future business expansion.First of all, in order to keep the leadership position, technological innovation is crucial for Taobao. Taobao may focus on continuous improvement of its online payment sy stem, which is also one of its strengths, particularly in the aspect of transactions (should be transactions, without apostrophe) reliability and security. Moreover, website functions, Internet stability and high-speed access to websites are also important in providing a better user experience, which may help to attract more customers.Secondly, as Taobao has the advantage of large scale consumers and sellers, Taobao may segment its market to provide more specialized services based on different demands so that it can meet customers requirements more effectively.To sum up, it is undeniable that the future of (the) online shopping market in China is promising. ground on the statistics by CNNIC, It is in a steadily (should be steady) development stage. In this attractive online shopping market, more complete logistics providers and payment systems will appear. These will provide Taobao more opportunities to develop in the future.