CONSUMER BEHAVIOR
Case Study

Taobao.net and Online Shopping in the Chinese Market

PART1

1. What does this case study teach us about the "critical success factors" for any marketing firm wanting to establish strong internet presence on the web?

This case study deals with two online companies: Alibaba.com « serves as an e-commerce aggregator, bringing together buyer and sellers » and Ebay.com which is a Web site auctions, became a world reference. In China, the high-powered US brand didn’t succeed (Ebay) contrary to the Chinese start up growing brand (Alibaba). The question is: why one succeed in China and not the other one? This is what it will be explains in this case study.

The strengths of Alibaba are: - « Alibaba succeed because it filled a void » - « Alibaba allows the users and sellers to contact each other directly » - « Alibaba is free of charge » - « In mid-August, Yahoo! acquired last year for $120 million, 3721.com competes with Baidu.com, which is partly owned by Google »

By opposition to Alibaba, the weaknesses of Ebay are: - « Ebay has attracted a lot of negative press by raising fees, placing the burden of fraud detection on its buyers and sellers, and abysmal customer support that amounted to little more than automated emails » - « The need to adhere to Ebay’s global platform, which hinders customization » - « It lacks a Chinese online payment platform like PayPal »

Moreover, thanks to the following factors, market shares of Alibaba.com have increased: - safety and security of payments made over the web - pricing polices used by web browser companies to attract users to adopt and stay with their brand - effective target marketing - effective customer service and relationship management

Indeed, customers on Internet have not the same expectations those customers who buy directly in physical shops.

So, thanks to these different points, Alibaba.com