tabobao reinventing (e-)commerce
TRANSCRIPT
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….
1Platform-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…
Chinese consumers
Chinese sellers
High Prices
Exactly what I
want
Instant Acces, use
Find and
acquire goodsLow quality
Lack of Trust
Fast responses
Highest price
Get paid 100% of the times
Can’t process
payments
Non-existent logistics infrastructure
Poor access to
customers
Sell new and
used goods
Taobao first focuses on creating trust and on building the missing
infrastructure…
淘宝网 taobao.com
Two-way review
system
Developing
commerce
infrastructure
Banks & Alipay
Express logistics providers
…to create new value propositions for consumers and sellers alike.
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
development0.- (subsidized
by Alibaba)
2Shift 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.
Chinese sellers
Fast responses
Highest price
Get paid 100% of the times
Can’t process
payments
Non-existent logistics infrastructure
Poor access to
customers
Sell new and
used goods
Micro-entrepreneurs
Recognized
brand
Easy admin
Repeat customers
Not making
enough money
No business
experience
No customer knowledge
Make a living
Sell products
Fulfill a passion
Sellers become micro-entrepreneurs…
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
development0.- (subsidized
by Alibaba)
…Taobao shifts focus, adds service providers and adapts its
value proposition…
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
development0.- (subsidized
by Alibaba)
Grow business
Help entrepreneurs
succeed
App developers
+ fashion models
…and creates revenue streams to turn a profit for the first time.
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
development0.- (subsidized
by Alibaba)
Premium for advanced shop
features
Ads
Training &
empowerment
Grow business
Help entrepreneurs
succeed
App developers
+ fashion models
3Growing 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
Grow sales
Reach Chinese
mass-market
Harsh competition
Customer
acquisition cost
Effort to establish presence
Develop brand
loyalty
Sales statistics
Big Brands
Millions of consumers become a precious asset…
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
development0.- (subsidized
by Alibaba)
Premium for advanced shop
features
Ads
Training &
empowerment
Grow business
Help entrepreneurs
succeed
App developers
+ fashion models
Millions of Chinese
consumers
…Taobao leverages this asset for a new value proposition …
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
development0.- (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
…to a new lucrative customer (big brands).
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
development0.- (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
Lessons Learned
Taobao created three different types of business models
(and value propositions) in just ten years.
2003: C2C
2006: Small B2C
2008: Big B2C
?
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