Transactions up at Taobao stores

After four years of research, Robin Niu (Niu'er), one of the more popular cosmetic experts and also a television celebrity in China, released his new product exclusively through Taobao, China's largest online commerce site.

Since Sept 1, more than 1,000 bottles of his Cream of Jing Cheng have been sold through its flagship store at Taobao Mall, Taobao's business-to-consumer (B2C) platform, which was launched last April.

"The market price should be around 660 yuan per bottle, but it only costs 320 yuan at Taobao," Niu said.

"I will donate all profits to the Chinese Red Cross Foundation and, at the same time, provide quality and cost-effective products to my fans who have given me constant support for years," he said.

Daniel Zhang, chief financial officer at Taobao.com, China's main competitor to US online auction giant eBay, said Taobao has more than 100 million users.

"Through the daily operation of Taobao, we are able to get information on consumers' preferences and shopping habits," added Zhang, who also is in charge of Taobao Mall.

"Niu'er is among the most popular key words at Taobao's search engine, which reflects its popularity and also market potential, " Zhang said.

Business people like Niu also are able to get direct feedback through Taobao's platform to make any adjustments to their products, sales or other aspects of their operations, Zhang said.

Zhang said the global financial crisis has hurt businesses and consumers.

"To counter the so-called business chilly winter, increasing numbers of enterprises have chosen Taobao for better profits, while consumers are looking for products with lower prices," he said.

The company said Taobao Mall can save enterprises as much as 20 percent of the cost of establishing sales channels and also 20 percent of operational sales costs.

Since last year, many well-known brands such as HP, Lenovo, Li Ning, Disney and P&G have launched flagship stores at Taobao Mall. There are currently more than 1,000 enterprises at Taobao Mall.

Uniqlo, the Japanese retailer known for its cheap and cheery cashmere jumpers, gained 300,000 yuan in sales on its first day at Taobao Mall in April 2008. Sales reportedly reached 150 million yuan during its first year at the online commerce site.

In April, sales at flagship PC stores operated by China's Lenovo and US-based Dell reached 2 million yuan each.

Zhang said Taobao.com has won a 20 percent-plus share of the Chinese B2C market since it launched its B2C platform at mall.taobao.com.

"There are more than 100 million users at Taobao, which means an incomparable market for all enterprises. You don't need to spend much money on sales channel exploration and advertisements. Just let consumers know you are here at Taobao, and then they will come," Zhang said.

"The cooperation between Taobao and Niu'er should be a good example for Taiwanese, Hong Kong or overseas enterprises that are considering entering Chinese markets but lack a sales channel," Zhang said.

Taobao reported a transaction volume equivalent to 80.9 billion yuan in the first half of this year, a nearly twofold increase from one year earlier.

On average, there are 438 commodities, 473 clothing items, 261 cosmetics items, 215 jewelry pieces, 81 small household electrical appliances, 69 mobile phones and 32 laptops sold at Taobao every minute, according to the company.

The most popular items bought at the site include laptops, mobile phones, cosmetics and clothes.

(China Daily 10/19/2009 page3)