PDF《Taobao Villages》

3 trillion (more than USD

430 billion). Representative of the new economy, Alibaba'

s business ecosystem spans production and distribution while also securing a strong presence in the service sector through its logistics and finance activities. The GMV of RMB

3 trillion speaks volumes of the rapid growth of such an ecosystem as well as that of the global new digital economy. Underlying the GMV of RMB

3 trillion are greater socio-economic value, entrepreneurship and job creation. According to Alibaba, its ecommerce ecosystem has created over

15 million retail jobs and made possible over

30 million indirect employment opportunities (Ali Research, 2016). Before referring to the driving economic force, the inequality-reducing potential as well as the challenges of the Taobao villages, a review of the major milestones in the history of Alibaba and Taobao.com is necessary to understand why they have succeeded.

7 1. The development of Alibaba and Taobao.com2 1.1 Start-up (1999-2003) Founding of Alibaba InFebruary1999,JackMa3 andhisteamof17people founded Alibaba in his apartment in Hangzhou, a city in Southeast China in Zhejiang province. Their goal was to set up an online B2B platform to facilitate Chinese small and medium-sized enterprises'

(SMEs) participation in global trade. On April 15, 1999, Alibaba.com, the company'

s first website, dedicated to global wholesaling, was launched. Founding of Taobao.com and making inroads into C2C On May 10, 2003, Taobao.com went online. Free access aside, Taobao.com launched multiple services tailor-made to the Chinese market and culture, therefore differentiating itself from eBay in its customer base, product development, pricing, and customer service. Table 1. A comparison of the Competitive Strategies of Taobao and eBay Platform strategy Taobao.com eBay Customer base broad white collar Product development Alitalk Skype (later than Taobao) Alipay Paypal (later than Taobao) Pricing Free access: transaction price is flexible. Fee-based: transaction price is fixed. Customer service Active communication with customers Less communication Source: Yang, Fei. (2017). Evolution of Ecommerce Players'

Strategy C the Cases of Alibaba and JD.com. Master'

s Thesis. Jilin University: p. 37. 1.2 Growth (2004C2007) Launching Alipay and improving service In 2003, Taobao.com launched Alipay, an escrow account type of payment service whereby the buyer will agree to release the payment to the seller only when he/she is happy with the purchase. This service reduced transaction risks for the buyer drastically. In August 2008, the number of Alipay users exceeded

100 million, bigger than the number of Taobao users, which stood at

80 million at the time, accounting for

40 per cent of internet users in China. Alipay thus became China'

s largest third-party payment platform. 1.3 Maturity (since 2008) From Greater Taobao to Greater Ali , developing the Chinese ecommerce infrastructure In November 2007, Alibaba'

s B2B business was listed on the Hong Kong Stock Exchange, raising USD 1.69 billion to further drive growth. In 2008, Alibaba announced the Greater Taobao strategy, claiming that it would invest RMB

5 billion in the next five years to upgrade its ecommerce infrastructure centered around Taobao.com into a better consumer-oriented ecomme........