Taobao, similar to Amazon and Ebay, is the go-to Chinese online retailer for just about everything. Run by the Alibaba Group, the site has millions of independent e-retailers who sell clothes, electronics, beauty products and more.
While Taobao may prove to be a successful endeavor for some, stiff competition among e-retailers is leading smaller sellers to other online venues, or to stop selling completely, reports China Daily.
Mo Daiqing, senior e-commerce analyst at China e-Business Research Center, a Hangzhou based company, says that this move is no surprise as consumer-to-consumer sellers are under a lot of pressure as they have to constantly improve their services in order to keep up with fellow retailers.
Measures to improve services include improving the quality of merchandise and putting a lot of time and money into marketing. Advertising is a critical component in the success of online sales when the sheer number of similar products can sometimes be inundating. The cost of marketing is taking its toll on some sellers, and forcing them to move to other smaller scale sites.
Data collected by Daiqing’s company shows that the number of individual e-retailers in China was at 11.22 million at the end of 2013, down a marked 17.8 percent from 2012.
While this decrease can’t be directly correlated with e-retailers moving from Taobao to smaller marketplaces, the center does say that Taobao’s numbers do count for 96.5 percent of China’s consumer-to-consumer commerce.
While the numbers seem to indicate that Taobao is losing its appeal among retailers, its parent group, Alibaba, isn’t showing any signs of slowing down. The group, which was just was just put up for initial public offering, was valued by American markets at $140 billion. This would support the theory that those leaving Taobao are small, independently run endeavors and therefore not effecting the overall success of the marketplace.
Ultimately, Daiqing says her company predicts that the number of e-retailers in Chinas will continue to dip. “It is all about survival of the fittest. We project the number of private-owned C2C players will drop to 9.18 million by the end of this year.”
image credit: taobao