Chapter 11 Taobao: the most successful business model in the past fifteen years

If someone asks: What is the greatest business model created by Chinese companies in the past fifteen years? My answer is: Taobao model.Taobao was invented by Jack Ma at the end of 2002. It has four innovations, which are very important now. The first innovation is that it changed the business model of eBay in the United States.Taobao's entire charging model and customer service model are completely different from those of eBay. It is an e-commerce model that is very in line with Chinese characteristics. The second innovation is that it invented a third-party payment system called Alipay.In the U.S. e-commerce system, a personal business credit system based entirely on credit cards has been established and used as a payment system for transactions.But this credit system does not exist in China.The biggest problem in e-commerce in China is the question of "ship first or pay first". There is a lack of a credit relationship between consumers and merchants.And Jack Ma invented Alipay, which solved this problem.Alipay is a very innovative third-party payment system worldwide.

The third innovation is that Taobao has become the most important paradise for entrepreneurs in China.Up to now, the total number of sellers on Taobao has reached 8 million, which is a very large number.As of the end of 2013, there were a total of about 36 million individual businesses in China, that is to say, about 20% of China's individual businesses opened their stores on Taobao. The fourth innovation is that the Taobao model has revolutionized China's traditional manufacturing and service industries in the past 10 years.The sales of almost all fast-moving consumer goods and durable consumer goods in the Chinese market have been affected by the Taobao model.It can be said that the Taobao model has played a great role in the progress of Chinese business.

Back to Taobao itself, the growth of its entire transaction volume is also very amazing.We can look at a set of data: from its establishment at the end of 2002 to the end of 2003, Taobao’s transaction volume was less than 100 million; by 2004, its annual transaction volume reached 1 billion; and then it took four years, Its annual transaction volume has reached nearly 100 billion in 2008 from 1 billion; by 2012, it reached 1 trillion.If we look at the total retail sales of consumer goods in China in the same year (2012) (21030.7 billion yuan), one trillion has already reached a very high proportion (about 5%).

Therefore, in the entire commodity trading market in China, Taobao has become an e-commerce platform that cannot be bypassed at all. As mentioned above, there are 8 million sellers operating stores in Taobao.com.With so many sellers doing business on Taobao, a problem arises, namely the conflict between Alibaba and Taobao sellers. In the past few years, the conflict between the two sides has been very intense.Among them, there have been two major conflicts.