I googled "Monopoly Panda", and this is what I got.
The Alibaba Group dominates the ecommerce landscape in China. It owns Alibaba, which is sort of a clearing house for finding sourcers or supply-chain providers for products. It also owns Taobao.com which is rumored to control upwards of 70-75% of all ecommerce in China. It also runs 支付宝 (Alipay), a payment system not unlike PayPal. Beyond this, Alibaba is launching additional “upscale” portals, deal-of-the-day sites, private sale sites, and even putting its tow into media.
Dominance.
That dominance comes with a price, however. Despite Taobao’s almost monopoly-level control over shopping, other portals have popped up and are getting some sustainable numbers. Amazon is backing it’s own horse, XIU.com is cherry-picking off the top brands, 360buy.com, paipai.com, dangdang.com, M18.com (not the Latino gang, that’s M13.) are all showing some traction. In a few months, we may have a real race on our hands.
Until now, most of these portals have had to knuckle under and use Alibaba’s payment gateway or go with some sort of simplified COD procedure. But, as with all things on the intarwebs, business models get copied, code becomes commoditized, service parameters become standardized, data formats unified: these other shopping portals are beginning to make waves of developing their own payment methods or their own membership loyalty programs. Due to the Network Effect, I doubt these additional payment gateways would get very far, but they might get far enough to give Alibaba a headache.
So what does Alibaba do in response? Jack Ma, the Chairman for Alibaba (Chairman Ma?) has signaled that he may spin off the Alibaba empire into separate groups. There are a few layers to this:
- On the surface, Mr Ma says he wants to potentially take Alibaba through and IPO, which would bring rewards and riches to the employees and investors. There’s no reason to doubt this motive.
- Tactically, by spinning off certain parts and going public, Alibaba could dramatically reshape the relationship with their largest investor Yahoo and Softbank (where it seems there’s always been an undercurrent of conflict)
- Strategically, Alibaba can extend its monopoly in payment gateway and supply chain clearing while allowing the other marketplace portals to rise a bit, or at least become more flexible overall, if each unit is operating independently.
In other words, the dominance will continue, it just won’t be so obvious and up front.
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Great post! Alibaba definitely dominates both b2c and c2c in China. Jack Ma has just divided taobao group to three independent companies, taobao, tmall and etao. After the restructure, they will become more focus on each specific area, c2c, b2c and shopping search engine. Maybe in the near future, we will see IPO for one of them. I believe tmall will become the first one.
Great post! Alibaba definitely dominates both b2c and c2c in China. Jack Ma has just divided taobao group to three independent companies, taobao, tmall and etao. After the restructure, they will become more focus on each specific area, c2c, b2c and shopping search engine. Maybe in the near future, we will see IPO for one of them. I believe tmall will become the first one.
+1
[...] TMall’s move is obvious, and probably overdue. They have a reputation of very arms-length client management, probably because they have so many clients and it’s essentially a self-service model. If anything, the yearly fees for being on the site might have been too low. Chalk it up to artificially lowering prices in order to gain early mover position and long-term marketshare. TMall has an estimated 1/3rd of all ecommerce, if not higher. [...]