Time: 2017-06-22 17:10:32     Clicks: 915

Alibaba CEO, Jack Ma famously said that Alibaba needed to become a leading player in China search around the same time that he gained operational control of Yahoo China as part of Yahoo's 2005 investment in a fledging Alibaba. But as a standalone search engine Yahoo/ Alibaba weren't able to compete with Baidu. Baidu also responded by creating Youa (an eBay-like marketplace) to compete with Alibaba's Taobao marketplace.

 

 

Alibaba wanted to change user behavior for shopping searches so that consumers would start their ecommerce shopping on Alibaba's site, not Baidu's. The thinking was that, hopefully, consumers would find more value going to Alibaba rather than Baidu. After all, Alibaba initially marketed its decision to block Baidu (and Google) as a way to prevent fraud from merchants who were manipulating paid search results on external sites.

 

 

 

It's hard to say how this strategy would have worked out for Amazon in the U.S. market, but this move was key to Alibaba's success in China. When it launched Taobao in 2003, Alibaba promised to keep Taobao free for its first three years in an effort to defeat eBay in China. eBay charged a percent fee for each completed transaction. As a result, it couldn't allow buyers and sellers to communicate before completing a transaction; otherwise they might complete their transaction outside of the platform.

 

 

By allowing users to transact for free, Taobao gained a big edge in the price-sensitive Chinese market. Additionally, Taobao introduced its hugely successful Wang Wang chat service to allow buyers and sellers to communicate before completing a transaction. This feature was a big hit in China because users often haggle over price before agreeing to a sale--the listed price isn't taken at face value like in the U.S. Additionally, product quality in China is more variable than it is in developed countries, so facilitating that communication was a key advantage for Alibaba over eBay in the Chinese market. As a result, Alibaba was able to build a much larger ecosystem with stronger network effects than eBay could.

 

 

Monetizing Like Google, Not Amazon

 

 

However, given its promise to keep Taobao free, Alibaba needed a different type of business model than eBay or Amazon. Product search is one of the most lucrative segments of search advertising, so it had huge revenue potential. That's why Alibaba ultimately decided on a revenue model that looks more similar to Google's Adwords than it does Amazon or eBay's ecommerce marketplaces. Instead of depending upon a percentage fee from each sale, Alibaba makes profit through its advertising model.

The bet has clearly paid off. Because Alibaba blocked external search engines, its marketplace became the dominant destination for shopping in China's e-commerce market, to a degree that neither Amazon nor eBay could achieve in the U.S.

Today, Taobao is Alibaba's largest and most successful platform, and it makes the majority of its revenue from product-search advertising. Alibaba's valuation has long since surpassed Baidu's–-a fact cemented by Alibaba's spectacular IPO last year.

 

That is why local E commercial com can develop local market faster than global giant  Ebay,  and  Amazon, etc.    They're forcast the market more accurite,  they have local pop keyword language inputs,  they know about the consuming behviour of people,  and the market volumn.

 

Never Try  Never Know,  Just Go and Develop your own territory!!

 

We're confedence on your sales and hope we can support you in the coming Data Centries.