China is home to the world’s largest and fastest-growing e-commerce market, with over half a billion online shoppers. However, entering the Chinese market comes with challenges: there are many e-commerce platforms in China including the popular giants Tmall and JD, which makes choosing one difficult. Taobao has been China’s most popular shopping website for years, and it remains so today. With its more than 800 million products available on the site, Taobao has everything you need from clothes to electronics to food! Taobao has now been established as a genuine alternative that is worth considering because of its wide audience and competitiveness in terms of price and accessibility. In this blog post, we’ll cover 10 tips that will make your experience selling on Taobao successful.
Taobao: A Giant in China’s E-Commerce Industry
Taobao: Alibaba’s Little Protégé
Jack Ma, the famous billionaire behind Alibaba has also established two other e-commerce platforms: Tmall and Taobao. However, some smaller companies have had trouble selling on Tmall because of its strict rules and regulations, as well as its expensive fees. Luckily for these small businesses, there are options like Taobao that offer more lenient policies to help them sell their products to Chinese consumers.
In fact, Alibaba has a wonderful and wide ecosystem of apps and services from all ranges of activities: e-commerce, digital media and entertainment, innovations, consumers services, etc. Therefore, Taobao takes its place in the lineage of Alibaba’s numerous apps.
Our proposition is simple: we want to help small businesses grow by solving their problems through Internet technology. We fight for the little guy. Since our founding in 1999, we have helped millions of small businesses to achieve a brighter future, and we hope to do this for at least 102 years, thus spanning our company’s life over at least three centuries.Jack Ma, founder of Alibaba
What is Taobao?
Launched in 2003 by the Chinese giant Alibaba, Taobao (淘宝网 which can be literally translated as “search for treasure“) is one of the most popular online shopping platforms in China, specialized in both B2C and C2C transactions. Taobao is also known for being an attractive platform for young entrepreneurs, offering Chinese consumers a large variety of products, with thousands of products listed directly on the platform. In terms of numbers, Taobao’s success is undeniable, with 300 million daily active users worldwide – 600 million monthly mobile internet users- and 668 million mobile Monthly Active Users (MMAU). As of 2019, Taobao was one of the biggest e-commerce players in China, having the biggest worldwide gross merchandise volumes: 490.3 billion U.S dollars, right behind Tmall, and the platform JD.com.
Taobao: China’s C2C Leader
- Taobao is a Chinese online store with millions of Chinese sellers and shops, operating on a consumer-to-consumer (C2C) system (even though it is perfect for B2B as well). For example, Taobao acts as an intermediary sales platform between individuals. Taobao offers the opportunity for individuals to open an online store on a website, as long as potential sellers meet certain requirements. Given its relevance in China, it is estimated that Taobao accounts for nearly 60% of the total e-commerce sales in China. In terms of traffic, Taobao ranked 5th in 2021, right after Tmall, Baidu, QQ, and Sohu, and even surpassing JD.com!
Why is Taobao this popular in China?
Taobao has left behind many competitors in China and is now one of the largest online retailers not only in its own country but also worldwide. Its wide products variety, competitive prices, convenient payment methods are some aspects that have made it so popular among Chinese consumers, selling domestic products such as clothing, jewelry, accessories, etc.
Taobao was able to propose to Chinese consumers one of the largest catalogs in the world, with diversified products, thus attracting the most promising audience in China: online shoppers.
It is clear that Taobao has benefited from Chinese consumers’ shift in consumption to online shopping and the growth of their purchasing power. As of 2020, the number of online shoppers in China was estimated at 782.41 million and is expected to skyrocket before the end of 2021, trends further exaggerated by the Covid-19 pandemic.
10 tips to understand and be successful on Taobao
Selling on Taobao can be difficult for people that are entering the Chinese market and are not too familiar with China’s e-commerce landscape and habits. In order to help you get started successfully on Taobao, we have gathered 10 tips that are essential and crucial for businesses that want to use Taobao in order to sell their products in China.
1 – Why should you sell online in China?
As come with China’s rapid digitalization, people are now used to buy online compared to go to brick-and-mortar stores, due to the booming e-commerce industry and increased computer/mobile access among Chinese consumers. With higher incomes as well as an increase in the urbanization rates according to the country’s National Bureau of Statistics, it has become essential for brands to sell their products online, especially on the most popular e-commerce platforms, such as Taobao.
With regard to practical problems, entering the China market can be much easier and faster through e-commerce, and especially on Taobao. Indeed, online stores allow avoiding the usual barriers of sales outlets, such as inventory problems, rent cost, and strategic location. Moreover, for foreign brands, it is still difficult to enter distribution channels in China, since most of them are quite difficult to deal with and are not very open to innovation and integration of foreign products.
2 – Why should you enter the Chinese market with Taobao?
If a company wants to sell a product in China, the first platform that will come to their mind will probably be Tmall, also owned by Alibaba, or JD.com. Nevertheless, it is particularly difficult (almost impossible) for small brands to enter the Chinese market through these two platforms. Indeed, as the competition has gotten extremely fierce over the years, only well-known international brands are able to be on these platforms.
Tmall and JD.com are really appreciated in China because of their strict rules and regulations, choosing the brands they want to work with, which makes consumers much more confident when buying products online. As the majority of them are extremely cautious when buying goods, it is essential for them to be reassured that what they are going to buy is of high quality. However, this does not mean that buying on Taobao is risky. Taobao has a special department responsible for tracking suspicious transactions and closing down shops owned by unscrupulous sellers. As a result, the risks are considerably reduced. Therefore, today it seems particularly profitable to enter the Chinese market via Taobao as it has become a major player in China’s e-commerce ecosystem.
According to the potential of China’s online market, its functionality and rapid development potential, Taobao will be the best tool to easily enter the Chinese market and to establish your brand as a leading brand, with easier access to both physical distribution channels and online distribution. Indeed, for companies that are available on Taobao, investors will be more likely to support your project and support you for offline retail than if you were not on it.
3 – What are Taobao’s main advantages for Chinese consumers?
- Wide variety of products: The range of goods on offer is astounding with hundreds of millions available at your fingertips from well-known brands through to obscure niche providers – if there’s something that can’t be found easily elsewhere then chances are Taobao will most likely stock the item or provide some function-related products.
- User participation: It is a wonderful way to make the platform more interactive and informative. Consumers are encouraged to leave reviews about their experience with products, which in turn helps other potential buyers. This kind of interactivity is also rewarding for brands as it increase the word-of-mouth (which is crucial in China).
- Secure payments: Taobao is a secure platform for Chinese consumers to purchase safely their goods online. As for merchants, they receive the money through Alipay’s secure service once the buyers have confirmed the product’s receipt.
- Customized experience: On Taobao, customized products and storefront recommendations are based on the users’ profile and activities (if he’s looking for smartphones, then his homepage will be overloaded with several brands of smartphones.
- Quick delivery: Taobao has various delivery options provided by Cainao Network’s logistics partners, including online package tracking.
4 – Baidu SEO to increase your Taobao conversion rate
One of the main difficulties, when launching a brand on online shopping platforms in China, is to find the right keywords that are going to increase your traffic.
If you are aiming to increase your Taobao conversion rate, then it is essential that you focus on SEO. The importance of Baidu SEO to the success and operation of a business cannot be overstated. From gaining higher rankings in China’s leading search engine platform as well as finding relevant keywords that will increase the traffic flow from more organic searches, this will absolutely have a positive effect on how well your Taobao store is doing with regards to conversions rates.
5 – Brand awareness in China is key
As the largest and fastest-growing economy in the world, China’s growing middle class has become a valuable market for businesses to pursue. However, if you’re unfamiliar with the Chinese culture or want your company to stand out from competitors, it can be daunting trying to build brand awareness among such an enormous population.
Mainly because it will be difficult to grow your business through a high ranking on China’s search engines, you will need to focus as well on another leverage effect in China: which is creating and maintaining a strong community and brand image.
Building its brand awareness is not easy when marketing products internationally because of cultural differences between countries that may lead to misunderstanding or be considered inappropriate. Therefore, if you want to be successful on Taobao and attract Chinese consumers, you have to convince them that you are reliable enough. As China’s tech-savvy population heavily relies on word-of-mouth, it is undeniable that social media have to be at the core of your strategies to develop and increase your brand awareness. To do so, you have to explain clearly how your products are different, use story-telling to present your brand, play with images and representations, and most of all: adapt to the Chinese culture and habits!
6 – Social media to increase your visibility and develop your brand awareness in China
Even more than in Europe for example, social networks are playing an important role for brands to develop their reputation in China.
Then, instead of considering Taobao just as a sales platform, you should see Taobao as a place where the seller and the buyer can meet. If you want consumers to find you and purchase your products, you have to attract them. With 989 million people using the internet in China, social media are the best way to target Chinese consumers and display your brand and products.
In order to convince them, you will have to create interactive content, regularly post interesting content, post pictures or videos of your products, reply to users, etc. The more you will be active on social media, providing a memorable experience, the more you will be visible online and people will start looking for your brand on Taobao. In China, this is a common practice, as a topic that leads to a lot of discussions will arouse many new potential customers, who will react and follow the discussion and be exposed to the brand’s products. Some brands even use celebrities or KOLS (Key Opinion Leaders) to launch some discussion topics. This is how some Chinese industrial giants like the mobile phone manufacturer Xiaomi for example have developed their popularity despite an extremely low marketing budget.
Thus, for a foreign brand wishing to enter the Chinese market, it will be relevant to develop interaction with buyers, create conversations and promote exchanges to become more than just a salesperson. Using social media will greatly contribute to your success on Taobao and can be a determining factor that will help you increase your sales and ROI.
7 – Adapt to Chinese consumers in order to attract them: Localization
As mentioned earlier, Chinese consumers might not be accustomed to Western brands for a lot of reasons, including in terms of marketing and advertising. First of all, before selling your products in China, it is highly recommended to do market research in order to understand the market and get to know your audience as well as your potential competitors.
Then, if you want to please Chinese consumers, you have to adapt your products (whitening effects for example) and packaging. It is essential to comply with these prerequisites if you want to be competitive enough and sell your goods on Taobao.
8 – Livestreaming in China: A powerful tool that you shouldn’t neglect on Taobao
In China, live streaming has become a popular form of entertainment. With social networks being so strong there and the country’s people having an intrinsic need to be entertained, it is no surprise that this industry would skyrocket in popularity over time.
Over the years, Chinese internet users have grown fond of entertaining formats like those provided by live streams on sites such as Douyin or Kuaishou; with all these factors combined together — the high use rate for social media platforms coupled to e-commerce platforms – it has become essential for brands to use live streaming to promote their products and increase their sales on Taobao. KOLs are particularly effective to promote brands. If you want to work with KOLs, don’t hesitate to contact us directly.
9 – Selling on Taobao: Probably the Best Way to Go
It is easy to open up shop on Taobao. It’s quick, simple, and user-friendly, which means that almost anyone can do it (yes, you do it!). Not only will you be able to reach a wide audience but your products will also have more visibility, which will lead to much more opportunities thanks to the many services offered by Taobao. What’s even better? The instant messaging feature of this website allows direct chat with customers.
Another positive point is that Taobao has relatively low start-up costs and with some initial input and effective marketing, sellers can achieve high sales volumes. Tmall is also accessible directly from Taobao’s app. So you can easily create two stores if you want (one on Tmall and one on Taobao).
If you are already in China and want to get started in e-commerce here, then you should really use Taobao. However, there are a few things to take into account if you want to sell your products on Taobao, as they focus on domestic sales rather than international ones. Don’t forget to hire people that are fluent in Chinese so there should not be any language barriers when interacting with Chinese buyers. Many brands have already adopted Taobao, so why not you?
10 – How to open a store in Taobao?
- Set up a company in China
If you want to sell your products on Taobao, then you will need a business license application, an office rental contract, and copies of your passport in China. You also have the option to open up a bank account in Mainland China if it suits you better.
- Connect your Taobao account to Alipay
Alipay is one of the most popular payment processors in China and it can be used on Taobao. The only caveat to this, however, is that you need your Alipay account linked with your Taobao account before being able to use it for payments.
- Complete identification authentication
You will have to submit some paperwork as required in order to prove who you are and that you’re a business owner.
- Create your store, connect the plugins and set up Ali Wang Wang (for Customer Service)
Be sure to take advantage of the online resources available. If you’re not familiar with e-commerce don’t worry, as Taobao will guide you along the way with some tutorials, guides, and tips.
- Design your store
The first thing consumers will see is the design and appearance of your store. Colorful displays that attract customers are the name of the game if you want to create an inviting atmosphere for your business. However, too much color can be distracting and give off a cheap impression so it is important to find just enough while still maximizing visibility with eye-catching designs! The right store design colors will make or break how potential consumers see your establishment on their first visit – think carefully about what they might experience as soon as they see your online store on Taobao.
- Upload products (referred to as “babies”)
Don’t forget to upload your products with some pictures (3-5 pictures per product) as well as a detailed and concise description written in Mandarin Chinese.
- Promote your store and advertise your products
The best way to attract consumers and stand out amongst your competitors is to promote your store through innovative and creative advertising campaigns.
- Carefully check your store
You have to be sure that everything is going to run smoothly before launching your online store (description, pictures, design, price, delivery, etc).
Contact us to get started on Taobao and sell your products in China
If you have more questions or any inquiries, feel free to ask us here and we will reply within 24 hours.