Thorough SWOT Analysis Of Taobao – Detailed Company Overview

Products 

( Taobao.com – Taobao’s e-commerce website, Source: Asia Pacific) 

With over 1 Billion product listings Taobao is China’s largest online marketplace selling anything from A to Z.

• Clothing
• Food & beverages
• Electronics & smart devices
• Health products & supplements

Competitors of Taobao

Some of the close competitors of Alibaba’s Taobao are:

• Wish
• E-bay
• Gmarket
• Amazon
• Shopee

SWOT Analysis of Taobao

A SWOT Analysis of Taobao can help the organization to identify its strengths, weaknesses, possible opportunities, and threats. It’s the best strategic tool to understand where a company stands strong, what areas it can excel in, and what are its threats.

From the SWOT analysis of Taobao, let us first begin by understanding the strengths of Taobao.

Strengths of Taobao

• Strategic Marketing: Taobao carries out a very interesting way to attract its consumers through various marketing strategies such as having an attractive-looking website. But, do you know where these websites are created? The answer is WordPress. So, if you also want to learn how to create an attractive website just like Taobao’s then enrol now in our online WordPress course and learn to create a website from scratch.
• The Unique Payment Method: Taobao uses a payment method which is called Alipay. They set up an app that people could store money in and use without just having a phone. As Alipay was introduced, Taobao soon took off and stayed at the top e-commerce place in China.
• Diverse Products: Taobao focuses on different kinds of products to have something for every type of customer. Consumers can find anything that they require. They are also known for hosting sales of limited edition products.
• Damo Academy’s Al Algorithms: Taobao has adopted a new way of marketing to provide its customers with the best experience and accurate recommendations while shopping which will have virtual live streams hosting technologies to enhance user engagement.

Weaknesses of Taobao

• Language Barrier: For an international consumer, Taobao can be a bit dispiriting as the website is in Chinese. When facing issues like dealing with defective products, returns-exchanges, refunds, international buyers are taken advantage of by Chinese sellers because of their perception that foreigners can pay more.
• Limiting Its Global Market Reach: It started great at the beginning but as Taobao doesn’t have an English version of its e-commerce platform, it is limiting its expansion in the global market & lacking to create an online presence in international markets.
• Counterfeit Products: Although Taobao is taking measures to control the sale of duplicate and fake goods such as rating the sellers by credit value. Taobao’s free strategy of individuals establishing an online shop easily without having to pay any charges and requirements has created a lack of confidence in the customers, resulting in affecting its brand image and sales.

Opportunities for Taobao 

• The Rapid Growth of China’s B2C Market: Taobao’s B2C has seen 60% growth over the first half-year of 2013, twice as much as C2C. It’s cost-effective for new businesses to start selling their products because of Taobao’s ready-to-use platform. The increasing demand for online shopping helps and contributes to the success of Taobao.
• Developing Technology: As every other person owns a smartphone, developing phone technology increases efficiency and makes it convenient to shop online which further leads to building an efficient network business culture.
• Expansion of the Business: Taobao has the potential of growing its business, increasing sales, and bringing in foreign currency by making its website in English. Having international people buy its products.
• GDP Growth & Employment Opportunities: As Taobao’s e-commerce website is being spread at a larger pace, creating new job opportunities for the people, further resulting in a GDP increase. 

Threats to Taobao

• Easy Entry Strategy Leading Towards Competition: As Taobao introduced a free strategy to carry out business online, It will lead to facing an increase in competition from the new market entrants. In addition to this, it’s easy for the other competitors to copy Taobao’s business strategies and patterns.
• Counterfeits Resulting in Bad Reputation: There have been many complaints about stealing goods, receiving damaged goods, etc. This will affect the reputation of the company further making it difficult for expansion.
• Less Sustainability of Business: As globalization is taking place, it will make Taobao across the nation’s borders and deal with cultural diversity. Lack of cultural knowledge will impact the business as it is not profitable to just operate within the nation.
• Alternative E-commerce Platforms: New emerging competitors in Asia are following behind Taobao, its position is in danger. As the website is only restricted to Chinese people, other platforms such as Amazon can have this as an advantage. 

This ends our thorough SWOT analysis of Taobao. Let us conclude our learnings below.

To Conclude

China’s e-commerce is growing rapidly and most importantly the buying capacity of its middle class is increasing. Hence, Taobao is the most significant e-commerce website in China with 500 million users and 60 million daily users. 

Taobao has a great scope of expanding its business globally using its marketing skills as it is already winning its customers through its unique marketing strategies.

In today’s digital era every company needs to have a great online presence and innovatively market its products and services just as Taobao is doing. If you are someone who would like to learn interesting digital marketing skills, check out IIDE’s 3 Month Advanced Online Digital Marketing Course and register today!

If you like to read such insightful and extensive analyses of companies just like the SWOT analysis of Taobao then you can find more such interesting case studies on our IIDE’s knowledge portal.

Thank you for taking your time out to read this, hope you found the case study on the SWOT analysis of Taobao informative and insightful. Share your views on it in the comments section below.