The current situation of China’s biggest C2C company “Taobao”

Taobao is China’s biggest online shopping company. It is a subsidiary of Alibaba Company. Taobao is like eBay and Amazon. It provides a C2C buying and selling  platform with each fixed prices and auctions.

After readjustment, Taobao cleaned up a batch of fake products, many office workers are willing to buy things on taobao rather than a retail store. Here is an example shows that their target customer looks like. An office worker who lived in Shanghai, and changed his job then moved to Suzhou city, Jiangsu province. He purchased almost everything that he need for his new place on Taobao. Items as small as needle or pen and as big as bed were delivered from Taobao. His online shopping addiction is very common in the Urban Chinese society. He has more than 20000 followers on his Blog, joked that he even bought some of his followers on Taobao. Taobao itself illustrates that because their price is cheaper and the category of products is more than eBay or other online shopping stores. Some customers are very passionate for shopping on Taobao. Sometimes, even they regret about bought some fake produces and say that they will cut off their fingers if they buy items on Taobao again. Taobao said, each of those customers brings them profits more than $8000 per year. And among those loyal consumers, young men seem to be more passionate than young women, because women are more careful about family and healthy than men, they usually compare with many items before decided to buy a product online. In recent years the repeatedly occurring food safety incidents, many young parents don’t trust milk at retail stores. Most of them choose purchase milk overseas on Taobao.

Taobao has more than 500 million registered users as of end of 2012.The largest customers group of Taobao called “night fighters”. It has a population of almost 80 million. Those people usually shopping online from 11pm middle night till next morning. The total gross merchandise volume of Taobao more than 100 billion US dollar last year.

Reference:http://news.alibaba.com/specials/aboutalibaba/aligroup/index.html

Shall Tencent charge for downloading “WeChat”?

Tencent company is the biggest internet company in China. In 2010, Tencent released an instant chatting software for the smartphone system which is called WeChat. Much like the  WhatsApp and iMessage, these are all free downloading software. But Tencent Company has announced a news that they will charge for the WeChat downloading. 

WeChat is unlike Skype, is more flexible, users just need to pay for it when they make a phone call. The Skype Company is like a role of virtual operators. Users pay for it directly through Skype company instead of through telecom Companies. Undoubtedly all companies want to maximize their profit margin. In March 2010, Verizon released Skype Internet phone and data plan, then users were able to use Skype directly. So, Tencent also want WeChat to corporate with China Mobile Telecom Company.  On March 11of this year, Tencent held (0700. HK) shares and each share reached $286 Hong Kong dollars, the highest ever. According to Tencent’s report, they still maintained growth in March. In 2012, the revenue of Tencent is 43.894 billion RMB; with a yearly growth of 54%, and the net profit is 12.332 billion RMB, with a yearly growth of 24.8%. When three big Telecom companies of China, China Mobile, China Unicom, and China Telecom have announced that WeChat will close their free version to customers, Tencent stock began to go down.  

With the Tencent's stock price dropping and the announcement of WeChat charging, these probably will become investors' biggest worry. But other services of Tencent Company are keeping good growth, such as QQ and games. Although there are some signs showing their profit channel is going down, the CEO of Tencent, Zhang Yi thought they still have to focus on the the WeChat, because people can not use Facebook in China, so WeChat will become Chinese Facebook. Many people think that if they charge for downloading customers probably will no longer use it. The fate of the WeChat directly affects the destiny of Tencent Company’s next step. 

Reference:

http://www.techweb.com.cn/it/2013-04-09/1288167.shtml

http://tech.ifeng.com/internet/detail_2013_04/09/23997551_0.shtml?_114sotuwen