Project Development of Taobao Online Shopping Site

Executive Summary
This report includes the case study of project development of Taobao online shopping site by
Alibaba. This report deals with managing the project successfully and how the company has gained
market of China. Taobao was able to take the place of a strong competitor eBay in China and was
able to successfully establish business capturing all the market share in the country. Alibaba
implemented many business strategies to develop the online website and was able to successfully
develop the project and capturing the market. This report deals with background study of the
company and critical analysis on the successful completion of the project.
Table of Contents:
1

Introduction
The purpose of this assignment is to identify a critical evaluation of a real world project. Whether an
organisation project is successful or failed is based on various of criteria and factors, this report
draw attention on project management as it is increasing importance in every organisation and
having a knowledgeable and talented project management team gives the opportunity for a project
to have a higher be a success. Today we are surrounded in a digital world, online shopping is
getting more and more popular and Taobao is an ecommerce platform and a project of Alibaba from
solving every individual needs in urban and rural of china to creating opportunity and jobs for small
business and individual in the market of domestic trade.
This study will focus on continue improving of Taobao strategy related to project management and
reduce factor that may cause bad reputation to the company:
 Buyers want to how they can be convince the authentic of the product by seller
 Introduce more automated self-pick up post box for consumer delivered package for easier
accessible in older suburbs and lower tier cities.
 Maintaining a healthy standard of reviews and feedback by consumer and seller, whereas a
lot of cases seller are using automatic bots to give them perfect reviews to attract customers.
Background
Taobao was founded in 2003 by Alibaba group. The company was established by Jack Ma and it
headquarter is located at Hangzhou city, China. It is China largest e-commerce website and the
ninth most visited website according to Alexa (Alexa, 2020).Tmall a subsidiary company Taobao
offering both C2C (customer to customer) and B2C (business to consumer) shopping platform
providing service to consumers looking for wide selection, value and convenience as well as
providing a platform for small businesses and individual entrepreneurs to open online store.
According to Alibaba Group finance highlight for Q4 2019, the platform boasted over 711 million
daily active users, mobile active user reached 842 million in December 2019 (Alibaba Group, 2020).
As when Taobao founded in 2003, the chinese e-commerce company face its biggest rival
competitor eBay. At that time eBay in China dominated the fledgling market, it had global revenues
of more than $2 billion hence Taobao aimed to be more innovative than eBay in customer service by
introducing a free instant online business communicating tool Ali Wangwang to help buyers and
sellers interact. Ali Wangwang has five features: (Gao and Zhang, 2011).
 Contact customers at any time: each information is marked with the user's online status, so
that businessmen can contact you at any time.
 Business opportunity search: you can quickly search millions of business opportunities
without logging into the website.
 Smart business opportunity: it is convenient to publish and resend information in batches at
one time and manage information by classification.
 Rich system functions: powerful voice, video, large capacity file transmission, text chat
functions.
2

 Multi party business negotiation: the business negotiation room with 30 people online at most
can easily complete business negotiation.
Standard Criteria for the success of the Project
Taobao being a successful project of Alibaba has contributed a few factors including:
 Access to shop in rural areas and lower-tier cities where there are fewer shopping malls
compared to big cities like Shanghai and Beijing.
 Access to tracking function to make it easier for customer to track their orders as it shows in-
depth details of exact location in a map as well as a timeline stating where and when your
order has been.
 Access to customer support with a simple click button in a live chat that replies within
seconds if customer have any question about the product, as well as pop up of frequently
asked questions, such as ‘when will my order be shipped’ or ‘what’s the return policy’.
Critical Justification of the Project Success Criteria
Taobao for establishing market in China had to face the established market of eBay. eBay in China
was a serious competitor of Taobao. Both the companies had similar business but the way to work
out with the business was different. Taobao was able to provide cheap service to both its sellers and
to the buyers. With this business strategy, the company was able to defeat the American company
eBay (Saetang 2017). The market share of the company increased more than three times
plummeting the market of eBay. In the year 2006, eBay in China was not able to compete with
Taobao because it has alliance with Tom Online a Hong Kong company and Taobao exited in the
market of China.
The main factor that was included in the business model of Taobao was that it was a marketplace, it
was not a seller. So, when Taobao entered in China’s Market, this was the only company serving
the people as marketplace, not seller. This business model of Taobao attracted large number of
people. Taobao only had to compete with eBay and has successfully fought off its main competitor
in China.
The business advantage that Taobao provided its customers is that not taking money from its sellers
but eBay took commission from the sellers. This was the main contribution that Taobao made I
market of China (Havinga, Hoving, and Swagemakers 216). The market of China includes lot of
small vendors and this the online marketers has great opportunity to grab over the market of China.
The business model that Taobao was offering to the sellers of China was providing free ads without
taking any commission from the sellers.
Taobao in China has also gained popularity and earned reputation by cooperating with media and
media was well used by the people of China before the use of Internet. Taobao partnered with many
TV shows and their ads were also shown in movies to gain popularity.
Taobao also gained trust of the people using its service. The company was able to gain the trust of
the users as because the company had allies with most of the banks in China. The transaction that
was made to Taobao online was secured and also provided the users protection against any type of
fraud. The types of online payment that were allowed by the company also increased. The people of
3

Taiwan and people of Hong Kong could also access the service of Taobao and it supported
international cards also (Liu 2020). Payment through ATM was also possible in some regions of
China. As the number of customers increased in Taobao, Alibaba decided to launch a mobile app of
Taobao so that it can have a flagship to Customer 2 Customer shopping and helps to capture
additional as well as interactive opportunities in mobile commerce. More than 70 % of the buyers in
Taobao were between the age group 2- to 30 and the company wants to serve them with improved
use experience.
Alibaba has changed the business strategy from C2C network single market to comprehensive retail
circle that includes C2C, different e-commerce models, auctions, purchase and distribution as well
as include group purchase. Alibaba has also split the business to three different platforms, one is
Taobao marketplace working on C2C based model and the other is Tmall.com that is B2C platform
also called as Taobao mall and the third is eTao which was the search engine for doing online
shopping.
Critical Analysis of the Case based on the Chosen Criteria
Great firewall of China has allowed the country to develop different applications and has provided
the opportunity to be one of the biggest platforms for online sell. With all these opportunities, Alibaba
has developed Taobao that allows small businesses, customers and entrepreneurs to sell as well as
buy on that platform with endless different kinds of goods (Chong et al. 2018). Alibaba has also
includes social element in Taobao to enhance peer selling that is common in online selling. With this
platform, customers will be able to acquire different information about the products, can
communicate with the customers and have real time messaging system from the vendors who sells
product to Taobao. Alibaba introduced certain factors business factors with Taobao that has helped
the company to increase its profit. The factors associated with the business model was:
1. Low cost for the sellers as well as buyers: Alibaba was able to successfully fend off eBay from the
marketing of China by implementing cost strategies in the project of Taobao. Cost strategies
included free listings for few years of joining for the sellers, and included no additional charges for
the transactions that are carried out online between the sellers and the buyers.
2. Website features that is user friendly: The website of Taobao was designed for best appeal to the
local users including instant messaging tool that facilitates the communication buyers and seller and
also introduced secured payment tool.
3. Different marketing models: Alibaba introduced a new business platform with Taobao with two
types of business platforms, B2B business model and C2C business model (Cui et al. 2017). The
project of Alibaba has established as destination for quality products, and sells attractive goods for
the Chinese consumers.
4. Effective promotional efforts: The company has introduced new promotional ways to promote
their business and that has worked very effectively in China markets (Gao and Zhang 2011). The
company has made strategic alliance with the internet portals of China and has established
beneficial partnerships in long term. The company also depends on the advertisements via
commercial movies and also has become famous using the TV programs for promoting its business.
5. Cooperation with the banks: Alibaba has established proper cooperation with the banks of Chian
and is able to give their customers a proper service with
Conclusion
Alibaba was able to utilize the weakness of the competitors and implement those in its project of
Taobao and was able to get its own strengths and got the opportunity to seize the market of
competitors and the company was able to become a premier e-commerce business in china.
Developing online business store includes different small processes including business analysis,
choosing proper platform for e-commerce and also includes user Interface design. With proper
4

project management strategies and marketing strategies proper implementation of website is
possible.
Recommendation
Choosing project management methodology is required for completing a project successfully.
Alibaba for developing the Taobao online website, agile scrum project management would have
been chosen to complete the project. With Agile scrum methodology of project management,
Alibaba would be able to have a speedy development of project. As because e-commerce is fast
industry that is developing, the behaviour of customers keeps on changing and technologies also
appear all the time. The scrum methodology allows team for achieving very quick results. The scrum
methodology also provides flexibility for developing the business need of online store that needs to
drive innovation for providing business solutions. The agile scrum provides collaboration within the
team members that would enhance the communication process.
5

References
Alexa 2020, taobao.com competitive analysis, marketing mix and traffic, viewed 8 march 2020,
<https://www.alexa.com/siteinfo/taobao.com>.
Alibaba Group 2020, Alibaba Group Announces December Quarter 2019 Result, viewed 8 march
2020, < https://www.alibabagroup.com/en/news/article?news=p200213>.
Chong, A.Y.L., Lacka, E., Boying, L. and Chan, H.K., 2018. The role of social media in enhancing
guanxi and perceived effectiveness of E-commerce institutional mechanisms in online
marketplace. Information & management, 55(5), pp.621-632.
Cui, M., Pan, S.L., Newell, S. and Cui, L., 2017. Strategy, resource orchestration and e-commerce
enabled social innovation in Rural China. The Journal of Strategic Information Systems, 26(1), pp.3-
21.
Gao, J. and Zhang, Z. (2011). User Satisfaction of Ali Wangwang, an Instant Messenger
Tool. Lecture Notes in Computer Science, pp.414–420.
Gong, C., 2016, September. E-commerce business strategy analysis and inspiration: Taking
Taobao as an example. In 2016 IEEE International Conference on Knowledge Engineering and
Applications (ICKEA) (pp. 72-77). IEEE.
Havinga, M., Hoving, M. and Swagemakers, V., 2016. Alibaba: a case study on building an
international imperium on information and e-commerce. In Multinational management (pp. 13-32).
Springer, Cham.
Liu, Z., 2020, March. Research on Information Asymmetry in C2C E-Commerce: Based on the Case
of Alibaba. In 5th International Conference on Financial Innovation and Economic Development
(ICFIED 2020) (pp. 24-41). Atlantis Press.
Saetang, S., 2017, August. The E-Commerce strategies responding to the UX design. In 2017 10th
International Conference on Ubi-media Computing and Workshops (Ubi-Media) (pp. 1-6). IEEE.
Wei, Y.D., Lin, J. and Zhang, L., 2019. E-Commerce, taobao villages and regional development in
China. Geographical Review, pp.1-26.
6