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Taobao

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Taobao is a massive Chinese online shopping platform based in Hangzhou.

Taobao logo (2021)
Taobao logo (2021)

Owned by the Alibaba Group, it functions primarily as a consumer-to-consumer marketplace. This means it provides a digital space for small businesses and individual entrepreneurs to run online stores. These stores mostly serve customers in Chinese-speaking regions like Mainland China, Hong Kong, Macau, and Taiwan. However, the platform also reaches people living abroad. In 2021, Alexa rankings showed it was the eighth most-visited website globally. Today, it is recognized as the world's most popular shopping hub when measured by gross merchandise value.

The platform operates through several distinct methods of selling. Most transactions involve new merchandise sold at a fixed price. However, some sellers use an auction system where buyers bid on items. To facilitate these deals, Taobao uses an escrow-based payment system called Alipay. Escrow is a process where a third party holds money during a transaction. In this case, Alipay holds the buyer's funds securely. The money is only released to the seller once the buyer receives the goods in satisfactory condition. This mechanism builds institutional trust between strangers. It was a major reason Taobao succeeded against competitors.

Taobao's rise to dominance is a significant part of e-commerce history. Before Taobao, Alibaba focused on business-to-business wholesale sales. In 2003, the American company eBay acquired Eachnet, the leader in Chinese online auctions. This made eBay a major competitor in the Chinese market. To respond, Alibaba launched Taobao as a rival consumer platform. Taobao offered free listings to attract sellers. It also introduced instant messaging for buyer-seller communication. This strategy worked very quickly. Between 2003 and 2005, Taobao's market share grew from 8% to 59%. During that same time, eBay China's share dropped from 79% to 36%. eBay eventually shut down its Chinese site in 2006.

The platform has evolved through various structural changes and expansions. In June 2011, Jack Ma announced that Taobao would split into three distinct companies. These were Taobao Marketplace, Tmall.com, and the eTao search engine. Taobao Marketplace remained the consumer-to-consumer platform. Tmall.com served as a business-to-consumer platform. eTao acted as a specialized search engine for online shopping. eTao allows users to compare prices across many major Chinese e-commerce websites. This includes sites like Amazon China, Dangdang, and Nike China. These changes helped the company meet new competitive threats in a changing digital landscape.

Taobao also uses unique systems to manage disputes and maintain rules. The platform follows a "General Code" consisting of 31 provisions. This code outlines the obligations for both users and sellers. To resolve conflicts, Taobao established a Public Jury system in 2012. This system uses a pool of 4 million volunteers. From this pool, the platform randomly selects panels of 13 jurors. These jurors must have been on Taobao for at least one year. They review cases and vote on a decision within 48 hours. The party with the most votes wins the dispute. Taobao can then implement the decision by freezing payments or removing a party from the platform.

In 2019, a new dispute tool called Golden Cudgel was launched. This name comes from the magical weapon in the novel *Journey to the West*. This mechanism helps sellers manage their reputations. It allows qualified sellers to remove a limited number of malicious reviews each day. To use it, sellers must provide evidence that a review is dishonest. If a seller uses this tool improperly, their ability to use it is revoked. This helps maintain the integrity of the feedback system. Users often rely on these ratings and reviews to compare different shops and make decisions.

Modern shopping on the platform has become highly interactive through Taobao Live. This is a live-streaming service launched by Alibaba in 2018. It allows retailers to use social shopping to market their products. Weblebrities use the service to promote items like cosmetics, apparel, and electronics. This type of shopping has seen massive financial success. In 2020, 84 stores using the service reported $7.4 million in sales. The platform predicts that live-streaming will eventually generate over 500 billion sales transactions. Currently, daily sales for Taobao Live have already surpassed $3 billion.

AliExpress pavilion on the territory of the Leningradsky railway station
AliExpress pavilion on the territory of the Leningradsky railway station
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