Can Sellers Make It in the Taobao Gold Rush?

30 Aug

Taobao, the Chinese e-commerce giant, has 620 million members and reports transactions totaling NT$7.6 trillion every year. The hot e-commerce site has become a fertile land for opportunities in China. Limited by cultural differences and the complicated procedure to set up stores on Taobao, Taiwanese businesses are hesitant to tap into the Chinese market. Compared to the tens of thousands of stores on e-commerce platforms in Taiwan such as Rakuten and PChome, stores operated by Taiwanese on Taobao were no more than 2,000. With the increasing number of Chinese tourists in Taiwan and their interest in Taiwan’s cosmetics products and food items, Taobao is aiming at attracting more sellers in Taiwan this year, organizing seminars and training sessions, to lead Taiwanese online retailers into the vast market in China.

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Taobao’s training mechanism to help solve cultural differences

Taobao officially started offering classes in Taipei to seek Taiwanese sellers. The training mechanism, Taobao University, was introduced in Taiwan with the help of Taiwan’s Youth Career Development Association and a private company called Fans Bao. Besides the basic knowledge of operation procedures, the classes, including popular culture, local idioms, and consumer behavior, focus on getting the Taiwanese sellers to understand their Chinese customers more. In addition to Taobao University, a Taobao business association in Taiwan physically takes Taiwanese sellers to China to open up stores. The training mechanism attempts to help remove hurdles for Taiwanese sellers in all aspects.

Lou Cheng-yi, Fans Bao’s general manager in Taiwan, said that for Taiwanese sellers to enter the Chinese market, the most challenging part is marketing. To market the products well, the sellers first need to know the language the customers use, what is on trend, the local holidays and their favorable page design. Taobao University essentially helps interested individuals in Taiwan soak up the Chinese consumer culture.

Vast opportunities in organic agriculture for Taiwanese sellers

As luring as NT$7.6 trillion sounds, a seller must really understand the consumer psychology and develop a unique marketing style in order to stand out among over 9 million stores on Taobao. Taobao, which was established over 10 years ago, could record transactions totaling over NT$200 billion on Singles’ Day on Nov. 11. The phenomenon shows that the golden time for the gold rush has gone. The e-commerce site is already loaded with stores for cosmetic products, clothes, 3C items and products for mothers and babies; sellers plan to open stores now will have to find their advantages to avoid failure.

Successful e-commerce sellers in Taiwan will not necessarily fare well in China by simply copying their operation model. Taiwanese clothing stores, for example, will have a hard time competing with their Chinese counterparts if they don’t have a factory in China and rely only on cross-border transactions. Chen Qingtan, Taobao University director, said Taiwan’s organic agriculture is a promising field. Chen said that Chinese consumers believe in the quality of Taiwan’s organic agriculture and that Taiwanese organic agriculture operators conduct the business with good faith. Taiwan’s agriculture also has a more comprehensive certification mechanism. Chen therefore believes that organic agriculture will be a blue ocean on Taobao.

Realizing the “Taobao dream” with real capabilities

Before China lifts its block on Taiwanese e-commerce websites, Taobao seems to be the best place for Taiwanese sellers to chase the gold rush. Lou Cheng-yi pointed that e-commerce websites like Taobao will be the only way for Taiwanese online sellers to tap into the Chinese market, unless they set up a website on their own.

Lou Cheng-yi stressed that the Chinese e-commerce market is seeing an explosive growth and have more opportunities than any other market. Although Taobao University can help break through cultural differences, train customer service skills, design web pages and even open up bank accounts in China and help sellers set up Taobao stores in just four days, however, the real challenges lie in the sellers’ capabilities, in order to shine in the vast market with over 600 million consumers and 9 million stores.

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