淘宝网

taobao.com
Reinventing (E-)Commerce

strategyzer.com/vpd
 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….
 1
Platform-building from
the ground up
 With a growing middle class and
Internet connectivity, Taobao sees
an opportunity to boost commerce
by connecting Chinese consumers
and sellers online.
But lack of trust and a largely
missing infrastructure create
challenges…
 Get pa
Instant id 100
Acces, of the %
use times
at I es
tly w h
t respons
Exac ant Fa s
w

Highes
t price
el l n e w and
S ods
e d g o
us
High P
rices

Find a
nd
n ’ t process
o ods Ca nts
Low qua i re g payme
lity acqu

o
or a ccess t
st Non-e Po ers
Lack of Tru xiste custom
logisti nt
infrast cs
ructur
e

Chinese Chinese
consumers sellers
Taobao first focuses on creating
trust and on building the missing
infrastructure…
 淘宝网 taobao.com

Expres
s
logisti
cs
provid Developing
ers
commerce
infrastructure

Banks & Alip

ay

Two-way review
system
…to create new value propositions
for consumers and sellers alike.
 淘宝网 taobao.com

Web Retail with

Expres
s best price/
logisti
cs quality
provid Developing Online
ers
commerce customer
infrastructure service

Banks & Alip Retail sales

ay
platform

Two-way review
system taobao.com

IT
Infrastructure 0.- (subsidized
development by Alibaba)
 2
Shift towards micro-
entrepreneurs
Sellers discover an opportunity to
create a business and become
micro-entrepreneurs with a set of
“business-like” jobs, pains and
gains.
 Get pa
id 100
of the % Repea
times
nized custom t
re sp o nses Recog ers
Fast brand

Sell pr
oducts
Highes
t price Easy a
e l l n e w and dmin
S ods
e d g o
us

a livi ng
Make

b u s iness
n ’t p rocess N o
ence
Ca nts experi sion
payme Fu l fi l l a pas

o
o r a ccess t aking
Non-e Po ers Not m oney
xiste custom hm No cus
to
logisti nt enoug knowle mer
infrast cs dge
ructur
e

Chinese Micro-
sellers entrepreneurs
 Sellers become
micro-entrepreneurs…
 淘宝网 taobao.com

Online
customer
Web Retail with service
Expres
s best price/
logisti
cs quality
provid Developing
ers
commerce
infrastructure

Banks & Alip Retail sales

ay
platform

Two-way review
system taobao.com

IT
Infrastructure 0.- (subsidized
development by Alibaba)
 …Taobao shifts focus, adds
service providers and adapts its
value proposition…
 淘宝网 taobao.com

Help Online
entrepreneu customer
rs Web Retail with service
Expres succeed
s best price/
logisti
cs quality
provid Developing
ers
commerce
infrastructure

Banks & Alip builssinaelesss

GroRweta
ay
platform

App developers
+ fashion
models Two-way review
system taobao.com

IT
Infrastructure 0.- (subsidized
development by Alibaba)
…and creates revenue streams to
turn a profit for the first time.
 淘宝网 taobao.com

Help Online
entrepreneu customer
rs Web Retail with service
Expres succeed
s best price/
logisti
cs quality
provid Developing Training &
ers
commerce empowerment
infrastructure

Banks & Alip builssinaelesss

GroRweta
ay
platform

App developers
+ fashion
models Two-way review
system taobao.com

Premium for
advanced sh
op
IT
Infrastructure 0.- (subsidized features
development by Alibaba)

Ads
 3
Growing audience is
basis to new business
 Access to millions of Chinese
consumers becomes the basis of a
new value proposition to a new
customer.
 Reliable
shopping
engine

Reach Chinese
Sales statist mass-market
ics

Grow sales

Customer
Harsh Develop brand
acquisition cost competition loyalty

Effort to
establish
presence

Big Brands
 Millions of consumers
become a precious asset…
 淘宝网 taobao.com

Help Online
entrepreneu customer
rs Web Retail with service
Expres succeed
s best price/
logisti
cs quality
provid Developing Training &
ers
commerce empowerment
infrastructure

Banks & Alip builssinaelesss

GroRweta
ay
platform

App developers
+ fashion
models Two-way review
system taobao.com

Millions of
Chinese
consumers

Premium for
advanced sh
op
IT
Infrastructure 0.- (subsidized features
development by Alibaba)

Ads
…Taobao leverages this asset
for a new value proposition …
 淘宝网 taobao.com

Help Online
entrepreneu customer
rs Web Retail with service
Expres succeed
s best price/
logisti
cs quality
provid Developing Training &
ers
commerce empowerment
infrastructure

Banks & Alip builssinaelesss

GroRweta
ay
platform

App developers
+ fashion
models Two-way review
system taobao.com

Millions of
Chinese One stop
consumers presence

Premium for
advanced sh
op
IT
Infrastructure 0.- (subsidized features
development by Alibaba)

Ads
 …to a new lucrative
customer (big brands).
 淘宝网 taobao.com

Help Online
entrepreneu customer
rs Web Retail with service
Expres succeed
s best price/
logisti
cs quality
provid Developing Training &
ers
commerce empowerment
infrastructure

Banks & Alip builssinaelesss

GroRweta
ay
platform

App developers
+ fashion
models Two-way review
system taobao.com

Millions of
Chinese One stop
presence
tmall.com
consumers

Premium for
Membership
advanced sh
op fees
IT
Infrastructure 0.- (subsidized features
development by Alibaba)

Ads 2-5% of sales

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

2008:
Big B2C
2006:
Small B2C
2003:
C2C
Watch evolving context on
platform and in wider
economy and society
 Develop capability to
reinvent by responding
to changes with new
business models and
value propositions

strategyzer.com/vpd