Topic > Taobao Case Study - 851

Factors that have led to Taobao's success include: growth strategy, differentiation, reliable and established payment method, customer interaction and customer preferences. Taobao has used aggressive and promotional strategies to grow the business. Taobao has placed ads online and on billboards in major Chinese cities. Additionally, Taobao's user-friendly features have allowed it to attract new consumers, while also enticing EachNet users to switch to Taobao. But it differentiated Taobao by allowing users to post free product listings, while EachNet charged for its services. Taobao's business model was called unsustainable by EachNet, which was later forced to adopt a similar model. EachNet's growth has been stunted by Chinese consumers' lack of confidence in selling and buying online. Consumers had to pay by credit card (then not trusted by the Chinese) from EachNet, while many Chinese preferred to pay in cash. Therefore, Taobao had an advantage by having access to Alibaba's AliPay, a payment system that stored money in an escrow account before the transaction. Taobao was more open to interacting with its customers than EachNet. A big complaint against EachNet was that the company didn't offer much customer service, as well as not providing a phone number in case you had questions. Therefore, Taobao attracted customers by allowing the seller and buyer to communicate via instant messaging. Furthermore, EachNet was not adequately designed to adapt to Chinese audiences. On the other hand, Taobao's layout was more in tune with Chinese preferences by having a similar layout to the Chinese department