Mr. Wong, a businessman who has a 39 – year – old, who lives in Hong Kong, is a regular shopper on Taobao, the largest online market in China, which is run by the Alibaba.
He was buying his most recent black T-shirt and said, ” New York” in white letters, which cost a little over $3. The transaction took place between Mr. Wong and the merchant who sold the T-shirt on Taobao, which serves as a platform where shoppers and sellers to find each other.
Taobao, which does not charge transaction fees, makes money mainly through advertising purchased by traders who use the site. Generate a lot of revenue because there are about 7 million merchants – mostly small businesses – the use of Taobao. Many traders spend money on advertising to make their products more visible, because there are more than 800 million pieces on Taobao.
Mr. Wong is also a co-founder of eyewear retailer Lemon glasses, which operates seven shops brick and mortar in Shanghai. In June, the company opened a shop on Tmall Ali Baba, a Web site that hosts storefronts for many brands such as Nike Inc. and Gap Inc.
While almost anyone can become a seller on Taobao with little cost in advance, Tmall is the most exclusive site. Trademarks and authorized distributors pay the deposit to open storefronts after going through a stringent verification process.
The lemon Optics, which sells sunglasses from Ray-Ban and other brands, Tmall to pay a deposit of about $25,000 to open her store, and receive a commission on every transaction.
However, Mr Wong says Tmall traffic generates worth the cost. In July, lemon optics ‘ Tmall store sold about 1,000 pairs of glasses, and the weakness of the monthly sales in each of its stores brick and mortar of seven.
Last year, Taobao and Tmall exceeded together $160 billion in transactions and represents the vast majority of the company’s revenue.
Alibaba was founded in 1999 when Jack Ma, a former teacher, Alibaba.com, an e-commerce site that connects Chinese suppliers with buyers at home and abroad, from his apartment in his hometown of Hangzhou in eastern China. Over the past decade, the business has expanded rapidly with Taobao and Tmall.
Alibaba profit for the quarter ended in March, more than tripled to $669 million, while revenue rose 71 % to $1.38 billion. So far, the business model seems to be working.
One big challenge is how to cope with their work as more Chinese consumers use mobile devices.
As Alibaba tries to attract users of smart phones, it faces competition from other Internet giants in China, such as Tencent Holdings Ltd., which is also trying to enhance their mobile commerce and the Internet.
WeChat smartphone messaging application has 236 million active users. Last month, and added that electronic payment features to the application, a step toward turning a communication tool to e – commerce platform.
Says Forrester Research analyst Brian Wang Tencent has a lot of potential for WeChat is a platform ” very sticky ” – a lot of people use it throughout the day to communicate with their friends and family members. If the company can successfully integrate other services in WeChat, and could develop into a major competitor of e – commerce, says Mr. Wang.
Ali Baba, and at the same time, trying to adapt by investing in a wide range of online services, which are very popular among smartphone users. He said UCWEB company, which operates a Web browser smartphone and Store in China, has bought stakes in Sina Corp. Twitter like microblogging Weibo business and mobile mapping software company AutoNavi Holdings Ltd. last month, Ali Baba and Mr. Ma has a seat on the board of directors.[via]