HARVARD BUSINESS CASE: ALIBABA’S TAOBAO (A)
GROUP 2 – GMBA
Question 1: What are the major differences in the web designs of Taobao and eBay in China? Which is preferred to on-line buyers and sellers in China? Why? Taobao sought to distinguish itself from eBay in numerous ways. So Taobao’s web designs were imbued with a strong local culture that reflected a deep understanding of Chinese consumers and an attitude of informality. First of all, the website was designed like a Chinese department store. Taobao’s web designs are with strong colors, a little bit noisy, with lots of links. For example, they designed men’s and women’s navigation tab, to make it more suitable for Chinese customers. The following are Taobao and eBay’s homepage on November 4,2010. Taobao’s Homepage:
eBAY’s home page:
Secondly, Taobao also developed a number of mechanisms on the website to help creat the trust between sellers and buyers because in China, even in business, affect- and cognition-based trust are highly intertwined. * Sellers need to register using their ID and bank account information. * Taobao allowed buyers and vendors to provide feedback for each other and distinguished a person’s score as a seller and a buyer while eBay only has one score for one user. * Taobao introduced Alipay in 2004. Alipay is an escrow service designed to eliminate settlement risk among trading parties. Lastly, Taobao also embedded an IM service, Wangwang, in its website to facilitate communication between buyers and sellers and between users and the company. Wangwang allows buyers to directly haggle with sellers. This service reduced the communication problems of Taobao tremendously, compared to eBay. Due to the better understanding of Chinese culture and Chinese customers, Taobao’s website designs are preferred by Chinese eyes because it reflected how Chinese shoppers think.
Question 2: Why did Taobao establish the Alipay system? Why did not eBay establish such a system when...
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