17 July 2018
As online shopping has become a rage, the industry is confronted with several problems in China.
As online shopping has become a rage, the industry is confronted with several problems in China.

A Taobao joke

It might sound apocryphal, but this is a story worth telling.

A desperate individual once logged on to Chinese online marketplace Taobao and ordered a male organ enhancer. Within a couple of days, a parcel arrived, sending the man into paroxysms of glee and dreams of a better sex life. But when he opened the box, guess what he saw? A magnifying glass! Someone had obviously pulled a fast one.

With millions of vendors selling almost anything you can think of, the mainland’s biggest e-commerce platform is notorious for knockoffs and products failing customers’ expectation. Sometimes the goods arrive in bad condition. Sometimes, like in the case above, buyers get something they didn’t expect.

Fraudulent vendors may not be high in terms of the overall proportion, but given the huge universe of shops doing business on Taobao, the absolute number may be quite big.

Taobao is almost synonymous to online shopping, but the giant has its weakness too. Shady vendors aside, rivalry is set to get worse.

Taobao is too big, it draws excellent traffic, but an increasing number of small virtual shop owners are complaining about the rising cost of doing business on the huge and expanding online bazaar. For one, to get noticed at all, Taobao vendors have to pay to squeeze into the front page of each category. Appearing on the landing page would probably cost a fortune.

So, more SMEs are looking elsewhere, or at least hedging their bets by opening shops on other platforms. No. 2 player is opening its arms wide at the moment as it works with Tencent and expands its third-party business.

Tencent’s social platform based Weixin store format has been adding e-commerce functions to improve the appeal to the kind of merchants that Taobao targets.

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Funny Money.

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