Group Discussion_Group 8

Group 8

LI Jiayuan

TENG Qianyu

ZHANG Yujia

ZHANG Leyan

ZHENG Xiaoyu

Taobao

Changes:

1. Changes in business model

Taobao has evolved from a C2C platform to encompass the B2C sector with the launch of Tmall.

2. Changes in revenue structure

Taobao has evolved from merely relying on advertising and commission income to a more diversified revenue structure, including advertising, commissions, and technology service fees.

3. Changes in payment methods

Taobao has vigorously promoted mobile payments, making Alipay the primary payment method. Subsequently, Taobao has transitioned from primarily using Alipay to embracing various payment options, including the recent integration of WeChat Pay. These changes broke the previous payment limitations, facilitating consumers' payment choices and improving the convenience of shopping.

4. Improvements in mobile terminal

In the past ten years, the Taobao app has been continuously iterated, adding many new functions and services, such as live streaming and personalized recommendations, to meet the changing needs of users.

5. Innovation in Technology and Algorithms

Taobao has made significant investments in search and recommendation technologies, achieving personalized recommendations with the "thousand-person-thousand-face" approach, enhancing the precision and efficiency of search. Through real-time bidding systems and algorithm optimization, the platform has improved its advertising monetization capabilities.

6. Changes in marketing and promotion

Live streaming and short videos become mainstream:

Live streaming and short videos have become important means for merchants to promote. Taobao holds relevant activities and invites many celebrities and online influencers to participate, enhancing brand influence.

The development of social e-commerce:

Functions such as "Taoyou Circle"（淘友圈）are launched to increase user interaction. It also cooperates with social platforms like WeChat to expand marketing channels.

7. Expansion into Lower-tier Markets

Taobao has optimized its supply chain and logistics systems to better serve consumers in lower-tier cities and rural areas, expanding its reach into these markets.

3Cs Model:

1. Business Model

B2C and C2C are its main models, which meet various user needs. C2C mode attracts a large number of sellers, while the B2C model provides more formal and professional goods and services.

Taobao's revenue model is diversified. It can earn profits from companies and businesses. Based on the data collected from quantities of transaction behaviors and its technology ability, Taobao can offer companies or businesses the analysis results from those data, helping them learn more about consumers and better constructing their brands. Additionally, in the transaction commission mode, the platform charges sellers a commission as a service fee, which is determined based on the product category, price, seller level, and other factors. Taobao also relies on various methods such as advertising, value-added services, financial services, and membership services to achieve profitability.

As a dominant platform in e-commerce field, supported by Alibaba, Taobao has got the ability to enhance its vertical integration and to form a comprehensive and completed commercial chain. For instance, Taobao has a strong alliance with Cainiao and Alipay to broaden its profit channels.

2. Competitors

As one of the earliest e-commerce platforms, Taobao is dedicated to providing qualified and affordable goods to all consumers. Nowadays, its core competitors in China are mainly Jingdong, Pinduoduo and Red, Douyin and Kwai. These companies have different market positioning and strategy. Jingdong relies on self-operated model and logistics efficiency to win the trust of customers. Pinduoduo mainly attracts customers based on its low-price strategy. Red, Douyin and Kwai, on the other hand, are strong in live e-commerce, and they are all content-driven communities.

3.Clients

Taobao's users are mainly aged over 30, with a higher proportion of female users and urban users. These users prefer to shop through mobile app and have high requirements for the price, quality and diversity of goods. Over the past few years, thanks to a shift in its business model, Taobao has reached 900 million monthly active users.