Taobao Uses Search Engine’s Model In C2C Service

Written by Tangos on May 19, 2006
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TaobaoWhile eBay enjoys its position in US, it is losing market share quickly in China and is beaten by its Chinese rival Taobao, an Alibaba company, Google Trends can also approve it. Last week, Taobao announced a new feature for its users, the initiative intends to generate revenue from its free C2C platform.

The news service, called Zhaocaijinbao(招财进宝), takes advantage of search engine’s business model to let its users to bid for the searching keywords. If you bid a keyword for a specific commodities (call it Zhaocaijinbao commodities), it will appear on top of the search results for the particular keyword. At most 20 Zhaocaijinbao commodities will appear in result page, followed by normal search results(see screenshot below). Taobao will charge the sellers for any successful deal through searching, yes, pay-per-action model.

The ranking of the Zhaocaijinbao commodities in search result not only takes account of bidding price, but more important, also consider number of successful deals through that keyword. So it may effectivly reduce the abuse of the service and also maximize Taobao’s revenue.

Based on its approximately 20 million user base and RMB 8 billion yuan trading amount in 2005, Taobao is building Chinese largest C2C platform and an e-commerce search engine inside Taobao. The new service will definately help Taobao to find its revenue source while taking free policies to compete with eBay China.

Zhaocaijinbao

4 Responses to “Taobao Uses Search Engine’s Model In C2C Service”

  1. Asia Business Media on May 20th, 2006 10:55 am

    Mad Jack and Zhaocaijinbao…

    Then, over at China 2.0 Web Review, a very interesting piece on how search engine concepts are being used at the C2C and B2C site taobao.com with the Zhaocaijinbao keyword bidding service….

  2. Edwyn Chan's Weblog : web 2.0 | blog media | china on June 6th, 2006 2:32 am

    Taobao vs ebay: no one is really winning…

    Doing internet business in china is
    certainly difficult, ask any foreigner….

  3. Taobao Closed Keywords Bid Ranking System : China Web2.0 Review on April 11th, 2008 6:18 pm

    [...] One month after Taobao released its Zhaocaijinbao service(招财进宝), an auction-based, pay-for-performance searching keywords ranking service, today it has to cancel it under the pressure of users. [...]

  4. Taobao May Cancel Zhaocaijinbao Service : China Web2.0 Review on April 11th, 2008 6:21 pm

    [...] As I reported early, Taobao, the leader in Chinese C2C market, introduced a new service called Zhaocaijinbao to take advantage of keywords auction business model of search engine. However, less than a month later, Taobao may have to cancel the service. [...]

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