The establishment of two years, spent 100 million yuan Taobao not earn a penny, but grabbed 41% market share
May 26, Microsoft launched MSN China, the Chinese portal site, and MSN Taobao beat eBay to become China's shopping channel partners.Moreover, Taobao, eBay only ants attack the elephant getting violent.According to market research firm iResearch statistics show that in 2004, personal e-commerce market in China, eBay's share of 53% to 41% of Taobao.In 2003, the birth Taobao, eBay's share of 80%.
April 25, there is no public disclosure obligations of Taobao and even its own operating results, its first quarter of 2005, merchandise trade exceeded 10 million.It also revealed that the number of registered members has almost 600 million single-day site visits to 60 million passengers, the number of breakthrough products online 7 million, accounting for domestic personal transactions online for half of market goods.
For a non-listed companies, the above results and the data may not be recognized by competitors, but it is undeniable that, as a personal e-commerce in China an indispensable one, Taobao has become a personal e-commerce giantseBay's rivals in the most headaches.
From nothing to become eBay's biggest rival in China, was born only two years time, Taobao has been imposed as a magician.Taobao, general manager of Sun Tongyu on the "Internet Week," told reporters: "in the Chinese market, capital investment is on the one hand, is more important is understanding the Chinese market." This is perhaps the transnational companies in China can not cross the threshold,Taobao is that the rapid rise of local companies the key factor.
Targeting an opponent's weaknesses
Two years ago, only the Sun Tongyu Taobao Alibaba investment department in the assessment of a project plan, then SARS epidemic, "from an idea to the website, Taobao only a quarter." Printed on their business cardsthe God of Wealth, said Sun Tongyu title.
Before becoming general manager of Taobao, Sun Tongyu worked two jobs, have become his valuable experience in charge Taobao."At that time the sales environment and not good enough, there are many places I have not meet." Steel for their initial marketing and advertising account manager's work experience, Sun Tongyu has marvelous.
The two unsuccessful career to Sun Tongyu a better insight into a favorable market environment and how important.But more importantly, he met Ma, which became a turning point in his career, "Ma was to get an ad from the order, but was moved by Ma's dream."
"The idea is there in early 2003, when Ma that Alibaba's business has been relatively stable, the need for more long-term plans for the future, so we wanted to do something of a personal e-commerce. And when we think the market has toWell ready to start mature. "
However, Alibaba has even been successful in e-commerce, personal e-commerce investment is still a bit of a surprise at the decision.At that time the situation is that eBay has been occupied for more than 80% of China's market share, while eBay has 30 million U.S. dollars in 2002 to the price, eBay acquired one-third of the shares, and in 2003 to 150 million U.S. dollarseBay bought the remaining shares and promised to continue to increase investment in the Chinese market to enhance its market leading position in China.
"EBay eBay was really doing great in China, but we found it has many weaknesses. Customers complain about it a lot, this is our opportunity." Sun Tongyu Taobao project was exactly the person in charge.He said the weaknesses, of which the important point is that eBay charges upheld the principle of eBay."That time is to take charge mode, we feel that the time is not suitable. So last year we have been calling us to develop the market for the purpose, do not rush to collect the money."
Have aimed at the weaknesses in the opponents after a short period of 120 days, the Sun Tongyu is complete from the detailed market research to set up 10 teams of "business" process.In the early stage without any marketing situation, May 10, 2003, formally launched Taobao.20 days, Taobao usher 1 million registered users.July 7, 2003, Alibaba announced start-up investment 100 million yuan Taobao.
Advertising campaign
Know the opponent's weaknesses and not winning, this is the initial phase of a cross in front of the Sun Tongyu natural moat.How to make as many individual users that Taobao is the survival of lies.
But the newborn Taobao start an unimaginable difficulties encountered.With a number of costly advertising contract, eBay eBay and the three major Chinese portals (Sina, Sohu and Netease) signed an exclusive agreement to prevent other individuals in the three e-commerce site advertising.
The three portals were accounted for the vast majority of China's website traffic, for a newborn Taobao, be excluded from the three major portals advertising platform, is undoubtedly a heavy blow."Since a large site can not advertise, we do small sites of advertising." Sun Tongyu strategy is to lower the cost of running in the hundreds of small sites of advertising Taobao, which is a powerful eBay websiteeBay can not be taken into account.
It is these modest achievements of a small site Taobao's "notoriety."April 2004, according to China Internet Laboratory popular Chinese e-commerce website list the latest CISI data show growth of popular Taobao CISI to 768%.The domestic growth rate of 78% of similar sites.
In addition to on-line, then living space under small Taobao also made a number of innovative online promotion.April 2, 2004, Taobao, and "A World Without Thieves" cooperation, in addition to common advertising patches, posters, press releases and other promotional tactics, the two sides still in the network video product development and network value-added aspects of cooperation establishedpartnership.Rumor Taobao this total invested 10 million yuan.
"Our initial plan is to spend 100 million yuan within two years, in fact, early this year, all of it. Now we are just beginning to take second money." Suntong Yu said.July 2004, Taobao, Alibaba announced additional investment of 350 million yuan again.
Moreover, Taobao also throughout the subway stations and bus bodies, and even costly television ads a lot of ads."We help the country's advertising company made a lot of money. Prior to this, the offline ad market is the first attempt to Taobao, including subway, car, road signs and television."
Counterattack, Breakthrough
April 12, Taobao, and Sohu announced a strategic alliance, which means that Sohu Taobao posted on the website in their advertising messages.Sun Tongyu sigh of relief, "we just break out success." So far, Sina and Sohu have been with eBay eBay lifted the exclusive agreement.
In fact, the counterattack had begun before the breakthrough.Free on eBay eBay is the thrown Taobao heavyweight weapons.As early as August 17, 2003, Taobao had declared, before 100 000 after authentication and Taobao have had experience of a trading member, will enjoy the three years does not charge transaction fees concessions.At present, the registration of its members are well above this figure, but still no charges Taobao plan.
Alipay is thrown Taobao another heavy weapons.February 2, Taobao announced a year-long test of payment network transactions "Alipay" upgrade, and launch "the full amount of" system, the use of "Alipay" losses from fraudulent user, Paypal will all becompensation."In fact, in October 2003 when Alipay just launched, with very few, but now people have been very, very much. Taobao currently has more than 800 million items, 85% of the goods can be traded with AlipayThis is a very great data, indicating that Alipay is useful in Taobao 'mass base' of. "Sun Tongyu that the launch of the Taobao, Alipay vital to the future.
But the Sun Tongyu and Taobao still have to face this challenge: If Taobao charging in the future to take, will cause serious loss of members, so that other emerging e-commerce companies take advantage of the individual.For years, many competitors think that it is free strategy to make Taobao competition with eBay eBay is becoming more and more powerful.
"Taobao can achieve this result, we do not deny that free of charge and there is a role, but it is not the core, the core part of our respect for the local market and customers." Sun Tongyu obviously does not agree with this view.But for individual e-commerce companies, the cost is almost the only member of the profits, and this is Taobao and Sun Tongyu has to face the choice: when to pay?Not received free of charge.
"When we think Taobao strong enough, we will start charging. Strong enough to be a comprehensive index, including the site's transactions, customer loyalty and so on. We have no plans to charge." Powerful in Alibabafinancial support, this has no personal income e-commerce companies seem prepared to continue this "crazy" go.
"I think to make money is more important than things, good customer service is to improve the deficiencies, so that everyone to buy Taobao even more smoothness, safety, and better able to select goods. Customer satisfaction youhave the potential to make money in the future. "Sun Tongyu not to profit mind now, to him, how firmly the geometrically growing Chinese consumers stick together and Taobao is the most important thing.
Indeed, perhaps as the Sun Tongyu been stressed, "Now is not the appropriate time fee," to seize the market is even more important development strategy.