Tuesday 5 October 2010

Week1-The online market place



Replicating strategy

The internet-based electronic commerce environment has developed dramatically in recent Chinese market (iResearch, 2010). According to Chinese digital products online retail statistical reports (2009), the turnover of e-retailing has rocketed into 250 billion RMB last year. C2C, B2C retailing model accounted for a lion’s share in this market share, followed by B2T retailing.

C2C and B2C retailing refers to Taobao, a similar e-retailing website like Ebay. It is established in 2003, covering 80% market share in e-retailing area nowadays.

B2T retailing is associated with a new online shopping model, called Group-buying, which stemmed from a U.S. based business, Groupon. Being a team leader can be a lot of work, so group-buying websites have sprung up, serving as agents between buyers and sellers and receiving a commission from the sale. They usually offer bulk discounts, ultra-discounted tickets, discount coupon and rebate coupon.

A common factor between these two models, which makes them success, is replicating strategy across the globe for different markets. No matter Taobao or Group-buying, the concept of its retailing model is completely copying U.S. based e-businesses. Since those American retailers have won the market perfectly, they are regarded as great models in e-business area. Chinese e-market was not as mature as American’s in early time. Considering the wonderful performance of U.S. e-market, Chinese investors predict a promising e-market in China if they choose a right time to build up. Now Chinese e-market is in its fullness of time since more and more people can access to the internet conveniently and are willing to have a try on purchasing online. Therefore, replicating right things in right time gives Chinese e-businesses a big success. One thing worth mentioning is Taobao has won eBay completely in Chinese e-market. We can say that the pupil outdoes the master.