![]() ![]() In July, three Swiss watchmakers resorted to litigation: Omega, Longines and Rado sued Taobao in Beijing for failing to stop the sale of knockoff watches in Taobao Marketplace. And on Taobao, foreign brands are beginning to take notice now that they've started setting up shops in the Taobao Mall. According to a survey conducted last year by the website tech.qq.com, nearly 95% of Chinese Internet users believe that counterfeit goods are "running wild" online. (Read about Alibaba's relationship with Yahoo!.)Ĭounterfeit goods, though, are an even bigger problem and not just for Taobao. In each case, Taobao said it didn't condone such sales and it shut down the vendors as soon as they were discovered. Fertility drugs have turned up on Taobao, as have diet pills containing tapeworm eggs. Months earlier, a scandal erupted when mothers were found selling excess breast milk for upwards of $16 per bag on the site. Last month, the China Daily, a state-run newspaper, reported that vendors on Taobao were selling dried and ground human placenta, a popular ingredient in traditional Chinese medicine, in violation of federallaw. Take the trade in illicit drugs and other medical supplies, for instance. Given the ubiquity of counterfeits and illegally made goods in China, this is a serious problem. ![]() It seems the bigger the firm gets, the more trouble it has trying to control what's actually being sold on its sites. Though Taobao is tops in China, it's hit something of a rough patch. One of the main reasons that eBay didn't succeed in China was that Taobao offered a similar, or, perhaps, superior, service for free. 22.) Goldman Sachs predicts the company will make $716 million in pre-tax earnings and be worth $14.3 billion in 2013, which is impressive considering it makes the majority of its revenue from advertising unlike eBay, it doesn't charge listing or transaction fees in its C2C business. (Read why Silicon Valley is no longer king in China.)Īccording to Alexa, a Web tracking firm, is the third-most visited site in China and the 15th-most visited site in the world smack between Yahoo! Japan and Google India. Taobao's gross merchandise volume (total value of all goods sold) last year reached an estimated $60 billion double its 2009 volume and topping eBay's $53 billion. Taobao Marketplace (the site most similar to eBay) virtually owns the country's online consumer-to-consumer business, with a 90% market share, while Taobao Mall, a separate site where brands like Gap and Uniqlo sell directly to consumers, has captured close to 50% of the B2C market nearly triple its nearestcompetitor. ![]() Just eight years after its launch, Taobao has 370 million registered users across its three main platforms more than the entire population of the United States. Or a mutant creature from another planet hell-bent on global domination. Taobao (which means "searching for treasure" in Mandarin) isn't a mere crocodile today, it's a Tyrannosaurus Rex. ![]() He was not only right, he underestimated his company's potential. If we fight in the ocean, we lose but if we fight in the river, we win." Follow 2005, when the scrappy Chinese e-commerce company Taobao was locked in battle with eBay for control of the lucrative China market, Jack Ma, the former English teacher who founded Taobao parentcompany Alibaba, confidently predicted that victory would be his: "Ebay may be a shark in the ocean, but I am a crocodile in the Yangtze River. ![]()
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