Tabobao Reinventing (E-)Commerce Illustration of taobao growth by it's business model during recent years by strategyzer

1. 淘宝网
taobao.com
Reinventing (E-)Commerce
strategyzer.com/vpd

2. Taobao, part of the
Alibaba Group, is China’s
largest online shopping website.
Here follows the three-act
story of its evolution since
it began in 2003….

3. 1Platform-building from
the ground up

4. With a growing middle class and
Internet connectivity, Taobao sees
an opportunity to boost commerce
by connecting Chinese consumers
and sellers online.

5. But lack of trust and a largely
missing infrastructure create
challenges…

6. Chinese
consumers
Chinese
sellers
High Prices
Exactly what I
want
Instant Acces,
use
Find and
acquire goods
Low quality
Lack of Trust
Fast responses
Highest price
Get paid 100%of the times
Can’t process
payments
Non-existentlogisticsinfrastructure
Poor access to
customers
Sell new and
used goods

7. Taobao first focuses on creating
trust and on building the missing
infrastructure…

8. 淘宝网 taobao.com
Two-way review
system
Developing
commerce
infrastructure
Banks & Alipay
Express
logistics
providers

9. …to create new value propositions
for consumers and sellers alike.

10. 淘宝网 taobao.com
Two-way review
system
Developing
commerce
infrastructure
Banks & Alipay
Express
logistics
providers
Retail sales
platform
Web Retail with
best price/
quality
Online
customer
service
taobao.com
IT
Infrastructure
development
0.- (subsidized
by Alibaba)

11. 2Shift towards micro-
entrepreneurs

12. Sellers discover an opportunity to
create a business and become
micro-entrepreneurs with a set of
“business-like” jobs, pains and
gains.

13. Chinese
sellers
Fast responses
Highest price
Get paid 100%of the times
Can’t process
payments
Non-existentlogisticsinfrastructure
Poor access to
customers
Sell new and
used goods
Micro-
entrepreneurs
Recognized
brand
Easy admin
Repeatcustomers
Not making
enough money
No business
experience
No customerknowledge
Make a living
Sell products
Fulfill a passion

14. Sellers become
micro-entrepreneurs…

15. 淘宝网 taobao.com
Two-way review
system
Developing
commerce
infrastructure
Banks & Alipay
Express
logistics
providers
Retail sales
platform
Web Retail with
best price/
quality
Online
customer
service
taobao.com
IT
Infrastructure
development
0.- (subsidized
by Alibaba)

16. …Taobao shifts focus, adds
service providers and adapts its
value proposition…

17. 淘宝网 taobao.com
Two-way review
system
Developing
commerce
infrastructure
Banks & Alipay
Express
logistics
providers
Retail sales
platform
Web Retail with
best price/
quality
Online
customer
service
taobao.com
IT
Infrastructure
development
0.- (subsidized
by Alibaba)
Grow business
Help
entrepreneurs
succeed
App developers
+ fashion
models

18. …and creates revenue streams to
turn a profit for the first time.

19. 淘宝网 taobao.com
Two-way review
system
Developing
commerce
infrastructure
Banks & Alipay
Express
logistics
providers
Retail sales
platform
Web Retail with
best price/
quality
Online
customer
service
taobao.com
IT
Infrastructure
development
0.- (subsidized
by Alibaba)
Premium for
advanced shop
features
Ads
Training &
empowerment
Grow business
Help
entrepreneurs
succeed
App developers
+ fashion
models

20. 3Growing audience is
basis to new business

21. Access to millions of Chinese
consumers becomes the basis of a
new value proposition to a new
customer.

22. Reliable
shopping
engine
Grow sales
Reach Chinese
mass-market
Harsh
competition
Customer
acquisition cost
Effort to
establish
presence
Develop brand
loyalty
Sales statistics
Big Brands

23. Millions of consumers
become a precious asset…

24. 淘宝网 taobao.com
Two-way review
system
Developing
commerce
infrastructure
Banks & Alipay
Express
logistics
providers
Retail sales
platform
Web Retail with
best price/
quality
Online
customer
service
taobao.com
IT
Infrastructure
development
0.- (subsidized
by Alibaba)
Premium for
advanced shop
features
Ads
Training &
empowerment
Grow business
Help
entrepreneurs
succeed
App developers
+ fashion
models
Millions of
Chinese
consumers

25. …Taobao leverages this asset
for a new value proposition …

26. 淘宝网 taobao.com
Two-way review
system
Developing
commerce
infrastructure
Banks & Alipay
Express
logistics
providers
Retail sales
platform
Web Retail with
best price/
quality
Online
customer
service
taobao.com
IT
Infrastructure
development
0.- (subsidized
by Alibaba)
Premium for
advanced shop
features
Ads
Training &
empowerment
Grow business
Help
entrepreneurs
succeed
App developers
+ fashion
models
Millions of
Chinese
consumers
One stop
presence

27. …to a new lucrative
customer (big brands).

28. 淘宝网 taobao.com
Two-way review
system
Developing
commerce
infrastructure
Banks & Alipay
Express
logistics
providers
Retail sales
platform
Web Retail with
best price/
quality
Online
customer
service
taobao.com
IT
Infrastructure
development
0.- (subsidized
by Alibaba)
Premium for
advanced shop
features
Ads
Training &
empowerment
Grow business
Help
entrepreneurs
succeed
App developers
+ fashion
models
Millions of
Chinese
consumers
One stop
presence tmall.com
Membership
fees
2-5% of sales

29. Lessons Learned

30. Taobao created three
different types of
business models
(and value propositions)
in just ten years.

31. 2003:
C2C
2006:
Small B2C
2008:
Big B2C
?

32. Watch evolving context on
platform and in wider
economy and society

33. Develop capability to
reinvent by responding
to changes with new
business models and
value propositions
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