This paper indicates that cultural differences have significant impact on the development of the domestic e-commerce. The comparison between eBay (China) and TaoBao; the evaluation of how and why eBay (China) lost to TaoBao demonstrate that studying the target market as well as their attitude and behaviour toward online shopping can affect the consumer’s level of satisfaction when using a particular e-commerce website. This paper tend suggests future e-commerce developer to build their website according to their target market’s preferences in order to succeed in the e-commerce market.
Consumerist Culture
Consumption is a process of purchasing and using goods and services from the market that provide these resources. In the manner of eating, no matter how much food one ate, they will eventually be breaking down by the body into substances needed for energy, growth, and cell repair. After that, one will start feeling emptiness in the stomach and begin to crave for food again to fulfil the body’s need.
This endless consumption of food is similar to the consumption of material goods because when the goods are used completely, one would always have to acquire them again to support the necessities of life. In this way, all consumers are falling into a helpless cycle of consumption, satisfaction, and hunger because what they buy is never enough and the resources can never totally satisfy their need forever.
Today, people rely on buying, rather than making items needed for living. Thus the market must have enough resources available to supply to the consumers’ need. In fact, developing shopping platforms which can satisfy the consumers’ need would be a great way to make money in the current industry. Electronic commerce as a new and efficient shopping platform has significant opportunities as it can satisfy more consumers’ need than a physical store.
Shopping is an activity of selection and purchasing goods from the retailers. The consumers can search and buy goods from shopping.
Thanks to fast-growing use of the Internet, consumers can now perform the shopping task online in the comfort of their home environment. Furthermore, online shopping is more effective and efficient than conventional shopping.
First, with online shopping, consumers can browse products with minimal effort. Second, consumers can efficiently obtain critical knowledge about the products. Third, consumers can easily make comparison between the product features and prices. Fourth, online shopping is convenience because consumer can do purchasing anywhere with Internet connection. Last but not least, online shopping can save time and effort as consumers wouldn't have to waste time and energy on road traffic and finding parking space in a shopping mall.
Electronic Commerce
Electronic commerce, commonly known as e-commerce is virtual way of doing business. It consist of is selling and buying goods and services over electronic systems such as the Internet and other computerized network, such as the World Wide Web. The payment for goods and services is also conducted electronically over the Internet. Therefore e-commerce is a lot more economical if compared to brick-and-mortar store since there is no physical store space, insurance, or infrastructure investment. All one need is an idea, a unique product, and a well-designed web storefront to reach the consumers.
Besides that, e-commerce provides better and quicker consumer service. It also enables consumers to perform quick comparison task. E-commerce also improves information sharing between retailers and consumers. Convenience is a major drive for consumers to utilize e-commerce platform. E-commerce platform enables consumers to experience no traffic jams, no crowds, and do not have to carry heavy shopping bags yet purchase goods with just few clicks efforts.
In general, e-commerce is a type of business model that enables a firm or individual to conduct business over the internet. It operates in four major segments which are Business-to-Business (B2B), Business-to-consumer (B2C), Consumer-to-Consumer (C2C), and Consumer-to-Business. Out of these major segments, C2C is a fast developing pattern. C2C platform enable transaction between consumers via the Internet. eBay and TaoBao are two of the world largest C2C e-commerce websites.
eBay is an online marketplace for buyers and sellers and was founded by Pierre Omidyar in 1995. It is a popular e-commerce website in the world especially in United States. eBay considered China would be its second most important target market since China’s consumer market might overtake the United States as the world’s largest consumer market in the world. Hence in 2002, eBay started strategic alliance with EachNet in China which was founded by two American-trained MBAs, Chinese entrepreneurs. eBay then injected $100 million to build its China operation, now renamed “eBay EachNet,” also known as eBay (China).
The China Market
Today, China’s middle class is already larger than the entire population of the United States and is expected to reach 800 million in fifteen years. The official data from China’s National Bureau of Statistics categorized the Chinese middle class as households with an annual income ranging from 60,000 RMB to 500,000 RMB. According to McKinsey, the Chinese middle class’s purchasing power, range from 85,000 RMB to 342,000 RMB.
In 2006, McKinsey predicted that the by 2025, the Chinese middle class would reach 612 million and China would become the third largest consumer market in the world after the U.S. and Japan. In fact, a recent Credit Suisse report predicts China’s consumer market will reach $16 trillion by 2020, overtaking the United States as the world’s largest consumer market in the world. Furthermore, Asia has reached 1,016,799,076 Internet users on December 31, 2011. It has the largest Internet user population in the world as shown in Chart 1 below.
Chart 1: Internet Users in the World by Geographic Regions - 2011
Cultural Differences
Even though eBay realised that China is an important target market and launched its China operation, eBay (China) with the intention to globalize its C2C e-commerce website and monopolize the China market to become the world largest online marketplace. It failed to recognize that the Chinese market is very different from the Western market and thus lost to the local C2C e-commerce website called, TaoBao.
Taobao was founded by Jack Ma in 2003 and it is the most popular C2C
e-commerce site in China today. Jack Ma spent much time to identify his target market and study the local consumers’ attitude and behaviour to make TaoBao friendlier to use for its consumers. In spite of that, eBay stuck to its “global platform” which did not fit the local consumers’ tastes and preferences. As a result, the local consumers prefer to shop on TaoBao instead of eBay (China).
Understanding how cultural differences may affect consumer evaluations of websites can uncover ways to design a truly user friendly interface. Cultural preferences can affect the degree of user friendliness of an interface such as colour, content and structure. Given that different culture has different perception toward things; white may symbols purity in the United States while it is a symbol of death in China, so disregard cultural differences, the website will be doomed.
The reason why eBay (China) lost to TaoBao is because eBay (China) was too globalized and not localized enough. eBay sent a German manager to lead eBay (China) and brought in a chief technology officer from the United States but neither one spoke Mandarin or understood the local market. Moreover, because the top management team didn’t understand the local market, they spent a lot of money doing wrong things, such as advertising on the Internet in a country where small businesses didn’t use the Internet.
Besides that, eBay (China) advertisement was spreading on buses, subway platforms and everywhere else. Despite the fact that eBay (China) spreading its ads all over the places, Jack Ma fought back cleverly knowing that most small business people would rather watch television than browsing on the Internet, he secured advertisements for TaoBao on major television channels. In fact, advertising strategy used by Jack Ma is better and saving more costs and efforts.
Segmentation
Segmentation involves finding out what kinds of consumers would be the company’s target market. Several kinds of variables can be used for segmentation while the three relevant demographic variables are age, education, and income.
The age variable is crucial for the reason that younger consumers, especially those under age 25, are more interested in using new technologies, like the Internet to search for products, obtain product information, compare and evaluate alternatives if compared to older consumers (Wood, 2002).
Besides that, younger consumers have the ability and the resources to perform online shopping. “Self-efficacy” refers to individuals’ beliefs that they have the ability and resources to successfully perform a specific task (Bandura, 1994). Since online shopping requires basic knowledge of computer use as well as knowledge about the Internet, older consumers with low self-efficacy are less comfortable to shop online and thus avoid online shopping.
Education is another relevant demographic variables used for segmentation. Higher educated consumers are more comfortable using e-commerce site like eBay or TaoBao to shop. A reason for this is that education is often correlated with “computer self-efficacy” and “Internet self-efficacy”. Marakas et al. (1998) define general “computer self-efficacy” as an individual’s ability to perform a task through multiple computer application domains, while “Internet self-efficacy” is an individual’s ability to apply Internet skills in finding information or troubleshooting search problems (Eastin and LaRose, 2000). Subsequently, consumers with low education level may not be able to perform online shopping task by themselves.
The final relevant demographic variables used for segmentation is income. Consumers with higher household incomes intend to shop more often on
e-commerce sites if compared to lower income consumers. This is because, higher household incomes consumers have greater purchasing power and they are more likely to own a computer with Internet access and they often are higher educated persons (Lohse et al., 2000).
Target Market
There are two approaches to marketing. First, all consumers are treated as the same; the company is not making any specific efforts to satisfy particular groups. This may work when the product is a standard one where other competitor really can’t offer something different. Second, company chooses to target on one of several segments that exist while leaving other segments to competitors.
Both eBay and TaoBao went for the second approach which they chose to target on the particular consumers that they can address and grouping them according to appropriate demographic variables such as age, education, and income.
When eBay launched in China, it segmented its target Chinese consumers as those well educated, familiar with the Internet, earning a monthly payment over 3,000 RMB, and 20-40 years old (Chen et al., 2007). On the other side, TaoBao focus its segmentation on Chinese consumers as those between 20-30 years with good education levels which appears to included students as well, after analysing China’s C2C market for four months.
Comparing the target markets of eBay and TaoBao, it is clear that both of them targeted young people while TaoBao’s target market is much broader as it includes students, while eBay (China)’s target consumers are professionals who have salaries. Consequently, TaoBao’s segmentation was more successful than eBay (China) since student consumers made 10 percent of online purchases (China IntelliConsulting, 2008).
Trust between Consumer and Computer System
Lack of trust is one of the most frequently cited reasons for consumers not shopping online (Lee and Turban, 2001). Online shopping does contain certain level of risk since consumers cannot monitor the safety and security of the payment process and feel uncomfortable sending their personal and financial information. Therefore, the payment security is the most important issue to develop e-commerce.
Both eBay and TaoBao have launched their own online trading tool: Paypal and Alipay. eBay acquired Paypal in 2002. Through PayPal, buyers pay directly to sellers without any middle transaction. In contrast, Alipay launched by TaoBao is as the credit intermediary. It is a secure payment service which will temporarily keeps the money of the purchase before the buyer confirms to receive the purchases. To be clear, of buyer is willing to pay the seller for a product, the money will first be put in the buyer’s account in Alipay, and the seller will be informed to ship the product to buyer. After buyer receives the product, the buyer will confirm the payment in Alipay, and the seller will receive the payment (Alipay, 2008).
This trading tool is launched because TaoBao found that Chinese consumers have a strong suspicion on online payment. As a 22 years old Chinese consumer said, he felt more confident paying money to Alipay and then only releasing the money after he had his purchase in-hand first. Although Paypal also introduced this method to China after 2007, it failed to win consumers back as the consumers are used to and comfortable to trade on TaoBao e-commerce site.
In addition, TaoBao also strengthening the comprehensive cooperation with banks such as ZheJiang branch of ICBC (the Industrial and Commercial Bank of China). As a consequence, the introduction of this service has greatly increased the consumers’ confidence of TaoBao online payment. In July 2004, Taobao also reach an agreement with the Ministry of Public Security, to build a “national citizen identification number enquiry service centers”, which as a result, provides a more secure trading environment for TaoBao. Moreover, TaoBao also has free online anti-virus/ hacking system and user payment account verification that seek out those who use false indentify information to deceive bad or illegal action on TaoBao, while eBay does not integrate these systems.
Trust between Buyers and Sellers
Online shopping involves trust not simply between the consumer and the computer system but also involves the trust between the buyers and sellers. In the United States and much of Europe countries where agreements are commonly rather precise and contractual in nature; while in Asia, building a relationship of trust is important, especially in China. In the Chinese context, it is critical that buyer must trust seller before engaging in a transaction. Given the extremely high risk of fraud in China and given the buyer desire to reduce uncertainty, the embedding of an online messaging system in the C2C platform allows pre-transactional communication and so facilitates the development of trust between seller and buyer.
Since TaoBao’s establishment in China, it has been providing an online instant messenger called Aliwangwang, which is ranked as the most satisfying service of TaoBao. On the contrary, there was no online messaging system or any kind of direct communication between sellers and buyers was allowed in eBay before it acquired Skyped in 2005 (Chen et al., 2007). Even though Skyped is embedded into eBay after 2006, consumers claimed that it is not user friendly as it is a non-integrated tool, whereas Aliwangwang is integrated into each seller’s webpage.
Figure 1: Screen shot of TaoBao buyer’s webpage
In order to build the swift trust, a direct communication is crucial. A buyer is thus able to identify a seller as being online, and contact the seller immediately without having to leave the TaoBao platform to use other tools. Rather than going through the third party, real-time and direct communication is preferred in China. Another major characteristic founded by TaoBao is when Chinese consumers bought things: they see the goods first, and then cut the price. Aliwangwang along these lines provides instant communication between buyers and sellers and allow chances for buyers to negotiate the prices before they decide to purchase. In fact, Aliwangwang is an important tool to make virtual trading real.
Ou and Davison interviewed 10 users of eBay and TaoBao, focusing in particular on the interface between these two platforms, as well as the communication channels and their importance for successful transaction completion. The interviews is reported below.
- One buyer specified “when I shop in TaoBao, I only select items from sellers who are online because I like to communicate with the seller and solve transactional problems immediately”. Similarly “the icon (active blue or inactive grey) in TaoBao helps me filter sellers. By appearing online, those sellers express their readiness to communicate with consumers, and so I trust them more. Online status is even more important for me if it is the first time to transact with a seller. It seems that online sellers are more willing to take care of buyers’ needs because they make the communication channel open”.
- One interviewee commented “searching for online sellers is critical because when consumers buy things, they must have questions to ask. The transaction intention increases a lot if the seller is online. Trust can be also developed during the conversation in Aliwangwang. Although Skype is also used as a consumer-buyer communication channel in eBay (China), only a few sellers put it to use. Sellers’ online statuses are unknown in the web pages until you try to contact them by logging into Skype. This design creates inconvenience and reduces my communication intention with the sellers”.
- Some sellers also comment “I like the embedded Aliwangwang in TaoBao because potential buyers always want to communicate with me directly. TaoBao provides a uniform instant messenger for such demand for both buyers and sellers. I don’t need to switch among different instant messengers such as ICQ, QQ or Skype. With Aliwangwang I can easily signal my willingness and readiness for communication. That is good for me to build consumers’ first-stage confidence in transactions”.
- Both buyers and sellers pointed out that Aliwangwang can fulfil consumers’ needs for impulsive purchasing: “sometimes people want to buy because of impulse. Under this situation, they want to communicate with sellers immediately. If the sellers are not online, the impulse may not wait for another day”.
- Some buyers and sellers have moved from eBay (China) to TaoBao because of the convenience provided by the embedded instant messenger. For instance, “Aliwangwang is the most critical determining factor for me to switch to TaoBao from eBay (China). I can save the products and the sellers in my Aliwangwang bookmark list. I can directly select sellers in Aliwangwang and communicate with them”.
Trust Development in Reputation System
Reputation systems are also important in developing trust between the buyers and sellers. Reputation system is the feedbacks from buyers for the future buyers to review and it has significant impact on the buyer’s willingness to purchase since the buyer need sufficient confidence to engage in a transaction. A pleasant or arousing experience will let buyer engage in more unplanned purchasing, and browse for more products.
Online shopping experience resulted in satisfactory outcomes and if it was evaluated positively, it leads consumers to continue to shop on that site in the future. However, if these past experiences are judged negatively, consumers are reluctant to do online shopping on that particular site in future occasions. This illustrates the importance of turning existing online consumers into loyal consumers by providing them with satisfying online shopping experiences.
Giving feedback after a sale is completed is an essential part of the TaoBao process. Sellers live and die by their reviews thus TaoBao sellers usually try very hard to avoid negative ratings. An example of positive feedback would be “I’m very happy with it, and the seller provides very thoughtful service! Great!” While a common complaint would be “I know you’re very busy, but you don’t need to be quite so curt when speaking with me. If it’s not “yeah”; it’s “OK”; only ever one word at a time. This disrespect is why I’m giving a negative review. Even though some buyers might make unreasonable requests or have impatient attitude, yet TaoBao sellers still do their best to give a satisfactory reply because they worry about the potential negative ratings that would affect their future sales.
These feedbacks thus contribute to the word of mouth which has become a more significant source of product information, which the Chinese consumers perceive it as a credible information source. In 2010, 64% of consumers said that Word of mouth influenced their purchasing decisions, compared with 56 percent in 2008. This result suggests that word of mouth has grown strongly in recent years as a source of consumer information.
Website design
Communication influences the consumers’ attitude in the transaction process; reputation system makes consumers think whether or not to have transaction again; whereas website design helps consumers decide before the transaction.
According to an “Online Consumer Experience in Mainland China”, a survey conducted by GCCRM in 2007, TaoBao was top among sites people “ mostly loved”, while among those people “mostly hated”, eBay (China) rated high. When the consumers are being asked the reason why they “hated” any e-commerce site, most consumers chose the website design as their main reason.
Comparing the eBay (China) website with Taobao website, eBay (China) appears to be more product-centric, whereas TaoBao is built according to consumers’ likes and dislikes. In contrast, eBay (China)’s Website has a more international feel without adaptation to the Chinese context. It is clear that TaoBao had upper hand against eBay because it really understood Chinese consumers. Take listings for example: TaoBao organized its listing similar to local department stores. As a result, consumers perceive TaoBao as informal and friendly. On the other side, eBay refused to change its website after its establishment in China until 2007.
Besides, eBay’s website is text-rich, while TaoBao’s website is picture-rich. eBay’s website design makes it look professional yet it becomes unfriendly to young Chinese consumers since these consumers are the group mostly student. As a result, the text-rich and serious interface design would chase them away as they are more favourably to elements that make online shopping entertaining. In such case, TaoBao’s website looks friendly and entertaining to these young consumers.
The concept of eBay text-rich interface might be affected by the time-conscious environments as United States consumers often shop online just to acquire a speciļ¬c product or service and their main concern is to purchase products in an efficient and timely manner to achieve their goals with a minimum of irritation. Therefore heavy graphics with long download times are perceived as a nuisance (Larson and Czerwinski, 1998).
Conversely, Asian appears to prefer screens heavy with animated graphics, video and audio. Although eBay intend to penetrate its e-commerce website into the China market, it did not take the Chinese consumers’ preferences into consideration and refused to change its website interface design is what makes it lost to TaoBao.
In additional to the website interface, eBay also lost a lot of consumers because of the loading speed. When launching in China, eBay used its server in the United States to run the website, and the distance slowed down the loading speed. Moreover, problem such as “server not found” also occurred since the local authority blocked some of the foreign websites. As a result, the Chinese consumers perceive that eBay (China) website’s usefulness and user friendliness is low. Even though eBay (China) has learned the lessons and copied TaoBao’s style to its new website in China, Eachnet.com, in 2008. However this action caused “disgust” among the loyal consumers of TaoBao.
Consumer service
In online shopping, the human interaction with a service employee or salesperson is replaced by help-buttons and phone numbers.
A phone number shown on the website is necessary so that consumers can call when they have problems. TaoBao provides a call centre available 24 hours a day to answer any questions and accept suggestions. In contrast, eBay (China) did not provide such consumer service. There was even no phone numbers shown in eBay’s website before 2005. Consumers can only email questions or join an online discussion group which is weak in handling urgent problems (Rein, 2006).
In addition, TaoBao promised that any complaints will be settled within seven workdays. TaoBao consumers can also enter the “Taobao Helping Community” to help other consumers or be helped. In addition, top management executives in Taobao frequently communicated with consumers through forum and online messenger, which is rare in Chinese online market.
Besides that, TaoBao’s discussion board is far more active than eBay’s. There are 27 subject channels in eBay, while Taobao has 76 big channels and in each big channel there are 10-20 small channels. Up to 7 June 2008, in “Buyers” channel of eBay, there are altogether 3,540 postings, while in “Buyers” channel of Taobao, there are 162,300 postings (Taobao and eBay, 2008).
Taobao also fosters a much stronger community than eBay, and its consumers are able to share their trading knowledge, personal feelings, and all other things they would like to share. Many consumers feel Taobao brings them “a sense of welcome right away” and encourages them “to become more involved”, and some even say that Taobao offers not only transactions, but also a culture (Chen et al., 2007).
A consumer interface should also contain some elements that attract a visitor to stay and return, while the fact that communication on TaoBao is very saccharine may be the reason that encourages the visitors to become more involved to the platform since most Taobao shopkeepers tend to refer to their consumers as qin ("dear," "dearie", or if you prefer the British slang, "ducky"), whether they are young or old, male or female. The friendly qin is like a ray of warmth reaching out across the cold wastes of cyberspace.
These factors contribute to TaoBao has higher consumer satisfaction than eBay China. According to iResearch, the user satisfaction level was 77% for TaoBao while 62% for eBay (Wang, 2005).
The easier and more effortless a technology is, the more likely consumers intend to use the technology while “Ease of use” is defined as the individual’s perception that using this technology will be free of effort (Davis, 1989, 1993) or involve a minimum of effort.
According to a Morgan Stanley report, Taobao was more consumers focused and easy to use than eBay (China). With most users not sophisticated about auctions, the majority of Taobao’s listings were for sales. Only 10% of its listings were for auctions, while eBay (China) had about 40% of its listings for auctions. As a result, Taobao’s trading structure is better accepted in China, where the Chinese consumers are not familiar with auction trading yet.
Practically, many consumers are not likely to spend much time just in order to get the product in a little lower price. Also, since there are over 800,000 sellers on Taobao, consumers are able to discover an item for the lowest price online, which has almost the same price result as auctions. Therefore, fixed price is more welcomed by most Chinese online consumers.
In addition, TaoBao made a plan that it wouldn’t receive any charging transaction fees and listing fees in the first three years. The founder of TaoBao, Jack Ma believes that only when users get real benefits in online transactions then there will be more loyal network consumers. Just as Jack Ma predicted, no charge is the right business model for China. The no fee policy and secured Alipay service discouraged consumers from doing offline transactions.
On the other side, eBay has insertion fees, final-values fees, features fees and 3% transaction service fee which discourage consumers to deal on eBay while there is a better option such as TaoBao exists.
Proposal for the Development of the Domestic E-commerce
E-commerce is a growing market because it is a lot more economical if compared to brick-and-mortar store and all one need is a unique selling point, and a well-designed web storefront to serve the target consumers. Therefore any individual or firm with knowledge of computer use as well as knowledge about the Internet has the ability to launch an e-commerce website business transactions and activities.
A recent Credit Suisse report predicts that China’s consumer market will reach $16 trillion by 2020, overtaking the United States as the world’s largest consumer market in the world while Asia has reached 1,016,799,076 Internet users on December 31, 2011 and become the largest Internet user population in the world. These evidences hence indicate that China is a potential target market for e-commerce developers who aim to dominate the world’s e-commerce market.
Even though eBay realised that China is an important target market and launched its China operation, eBay (China) with the intention to globalize its C2C e-commerce website and monopolize the China market to become the world largest online marketplace. It failed to recognize that the Chinese market is very different from the Western market and thus lost to the local C2C e-commerce website called, TaoBao.
The main reason why eBay (China) lost to TaoBao is because eBay stuck to its “global platform” which did not fit the Chinese consumers’ tastes and preferences; it was too globalized and not localized enough because the eBay didn’t understand the local market. In contrast, Jack Ma spent much time to identify his target market and study the Chinese consumers’ attitude and behaviour to make TaoBao website friendlier to use for its local consumers.
Understanding cultural differences is important as it may affect consumer evaluations of websites while disregard cultural differences, the website will be doomed and eBay (China) is the good example in this case. Several kinds of variables can be used for segmentation and for consumers’ attitude and behaviour study while the three of relevant demographic variables are age, education, and income are chosen by eBay (China) and TaoBao to segment their target market.
Comparing the target markets of eBay and TaoBao, it is clear that both of them targeted young people while TaoBao’s target market is much broader as it includes students. Consequently, TaoBao’s segmentation was more successful than eBay (China) since student consumers made 10 percent of online purchases. eBay didn’t include student as their target consumers because it didn’t understand the Chinese consumers’ attitude and behaviour toward online shopping.
The most important issue to develop e-commerce in the China market is “trust”. Three different kinds of trust are discussed in this paper.
First, trust between and consumers and the computer system is an important factor that e-commerce developers have to deal with as Chinese consumers have a strong suspicion on online payment. Alipay is a good tool introduce by TaoBao prior to this issue. Chinese consumers feel more confident paying to Alipay and then only releasing the money after they had their purchase in-hand. Paypal introduced this payment method after 2007 but it could not win its consumers back. In addition, TaoBao also strengthening the comprehensive cooperation with banks has greatly increased the consumers’ confidence of TaoBao online payment. Moreover, the National Citizen Identification Number Enquiry Service Centers also contribute to a more secure trading environment for TaoBao.
Second important factor is the trust between the buyers and sellers. In the Chinese context, it is critical that buyer must trust seller before engaging in a transaction. The embedding of an online messaging system in the C2C platform such as Aliwangwang allows pre-transactional communication and so facilitates the development of trust between seller and buyer. In contrary, there was no direct communication between seller and buyer was allowed in eBay before it acquired Skyped in 2005. Even though Skyped is embedded into eBay after 2006, consumers claimed that it is not user friendly as it is a non-integrated tool, whereas Aliwangwang is integrated into each seller’s webpage. There are evidences indicate that TaoBao’s success appears to be founded not only on the explicit indication of a seller’s online status, but also embedding of Aliwangwang directly into TaoBao e-commerce site.
Last but not least, reputation systems are also important in developing trust between the buyers and sellers. The feedbacks from buyers have significant impact on the future buyer’s willingness to purchase thus giving feedback after a sale is completed is an essential part of the TaoBao process.
Although eBay intend to penetrate its e-commerce website into the China market, it did not take the Chinese consumers’ preferences into consideration and refused to change its website interface design is what makes it lost to TaoBao. Asian like Chinese prefer screens heavy with animated graphics, video and audio, eBay (China) however is text-rich and perceived to be too formal and unfriendly to the young Chinese consumer. Even though eBay (China) has learned the lessons and copied TaoBao’s style to its new website in China, Eachnet.com. However this action caused “disgust” among the loyal consumers of TaoBao.
In terms of consumer service, a phone number shown on the website is necessary so that consumers can call when they have problems. TaoBao provides a call centre available 24 hours a day to answer any questions and accept suggestions while eBay did not even include a phone number in their website.
In addition, TaoBao promised that any complaints will be settled within seven workdays. TaoBao consumers can also enter the “Taobao Helping Community” to help other consumers or be helped. In addition, top management executives in Taobao frequently communicated with consumers through forum and online messenger, which is rare in Chinese online market. In fact, TaoBao’s discussion board is far more active than eBay’s.
A consumer interface should also contain some elements that attract a visitor to stay and return. The friendly “qin” is like a ray of warmth reaching out across the cold wastes of cyberspace. Many consumers feel Taobao brings them “a sense of welcome right away” and encourages them “to become more involved”.
The easier and more effortless a technology is, the more likely consumers intend to use the technology. As a result, Taobao’s trading structure is better accepted in China, where the Chinese consumers are not familiar with auction trading yet. Furthermore, no charge is the right business model for China.
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