Alibaba Taobao together to Increase Market

With the financial crisis going on, Alibaba users, mostly Chinese small- and medium-sized exporters, have been witnessing reduced demand from overseas markets. To deal with the situation, Alibaba has to increase its marketing expenses and reduce its price to increase the number of users.

Alibaba.com plans to encourage more users to sell products through the online auction site Taobao.com to expand their presence in the domestic marketplace. The way is to break up the boundaries between Alibaba.com and Taobao.com to enable Taobao users to get stocks directly from the Alibaba platform.

Established in 2003, Taobao.com is China’s largest online auction site, taking up about three-fourth of the market share, according to domestic research firm iResearch. Jonathan Lu, president of Taobao.com, said the company’s online transaction volume is expected to double to 200 billion yuan this year from the 99.96-billion yuan it reported last year.

Alibaba.com held an online goods trade fair between its B2B users and Taobao.com users last weekend in Hangzhou. It said the contract value of the deals clinched during the three-day event was nearly 200 million yuan, two times more than the first online goods trade fair held in Guangzhou four months ago.

“Before our first online goods trade fair, Taobao.com users were purchasing only small quantities of textiles from Alibaba.com,” said David Wei, chief executive, Alibaba.com, “But now, the purchases have gone up significantly.”

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