One question I get almost every week is, “why am I struggling so much with selling directly to consumers in China?”
There are many different answers to this question – from fully optimizing campaigns on Baidu, Google China and the many social networks in China – but one that always catches people off guard is, “Taobao.”
Taobao isn’t technically a search engine. However, since search behavior is different in China, it’s often a forgotten, yet critical link in an overall Chinese search strategy – and, according to Taobao, they are a “shopping search engine”.
What is Taobao and Why is it So Critical?
Taobao, similar to eBay and Amazon, is one of the largest online marketplaces in the world and the largest marketplace in China with over 370 million users and more then 800 million product listings.
The Alibaba group in 2003 took the site to the public in a very successful strategy to compete against eBay who was entering the market at the time. They launched without charging fees to list, which of course transformed into a giant shopping search engine which is mainly items for sale rather than for bid.
Today, Taobao consists of:
- Taobao Marketplace – a consumer to consumer platform similar to craigslist/ebay auctions
- Tmall.com – a business to consumer online marketplace
- eTao – a shopping search engine
Why the Chinese Love Taobao and Where’s the ROI
Chinese people typically use search engines to research. This is a common behavior that many westerners do not realize. Search marketing in China provides fantastic market exposure and is often the leading tool used for consumers to look into their interests.
Want to buy a nice set of chrome rims? A westerner would typically search for “chrome rims”, click on either paid or organic ads and purchase from their intended website.
Chinese, on the other hand, would search for “chrome rims” to research the companies that provide them, how long they’ve been around, what materials are made in manufacturing, understanding the exact specifications, read blogs, and other forums for user generated feedback and finally they would go to Taobao and buy them.
As a search marketer, looking at ROI, I’d feel like I’m advertising on Facebook, but the reality is that search did its critical job in providing the research needed to make a “trustworthy” choice. I could have easily said “informed”, however the keyword here is “trustworthy.” The Chinese love Taobao because they trust it:
- Taobao is Chinese.
- Taobao uses Alipay, which is their major form of online payments (think PayPal meets an escrow service).
- Taobao have a direct communication channel with all resellers “AliWangWang”.
- Taobao have a pretty good user ranking system.
Steps to Launching a Taobao shop or Tmall store
There are a couple of ways in. Keep in mind, you do need to have everything translated into Chinese. Taobao won’t work in English.
The easiest is to register a Taobao shop, which is a personal sales profile. It’s open to non-Chinese people so anyone can do it.
- Register for an Alipay account by using your real name (you will have to provide your passport for verification).
- You will need to upload an image of yourself. Details are here (in Chinese).
- In order to set up the shop, you need to follow the steps list in this page, which includes confirmation of their policies, details of the products you offer, and a knowledge test, which demonstrates you know how to run the shop (Chinese).
There is no license required in order to sell products in the Taobao shop, most people just sell their idle stuff there.
However, most of the ranking and the selling is done through setting up a store on Tmall. Unfortunately, the requirements are much stiffer, only a Chinese company can run a store in Tmall but there is a way around this utilizing an agency to represent you as a proxy.
If you do have a Chinese office, you will need to provide the following documents in order to register:
Copy of transcript of business license:
Copy of tax registration certificate:
Copy of organization code certificate:
As well as some documents about your right to use the brand your selling. Those documents will depend on if you are the owner of the brand, authorized distributer, or just a franchise store.
The details are listed here and the cost of running a shop is listed here (in Chinese).
What Are the Major Taobao SEO Ranking Factors?
There are many factors that make up their ranking algorithm. The most important ones are:
- Utilizing items from Tmall.com which are favored over the other Taobao sites
- Sellers participating in Taobao’s Consumer Protection Agreement
- User feedback score and star levels (especially during the last 30 days)
- The rate of refunds given to buyers
- The traffic to conversion rate
- The complaint rate
- Keyword in title
- Daily average online time and frequency of chats “AliWangWang”
- Speed of delivery
- Accuracy and relevancy of product descriptions
- Alipay usage rate
- Quality of service
- Popularity of products sold
- Retention rate: Percentage of returning buyers
- CPM rate: Total views of single product item
- Keyword density
- Total amount of transactions over the last 30 days
There are also a number of off-page opportunities to build relevancy, links and better ranking. Those would include
- Submitting to Baidu, Google China, Soso.com and Sogou.com
- Blog comments, forum posts
- Taobao affiliated site links
- Social signals from renren.com, kaixin001.com, weibo.com, tencent.com affiliated web properties
Taobao is a great opportunity, especially if your price points are low (less then $100) and you have limited competition against other Chinese businesses and Taobao shops selling the same product for less. It’s certainly worth a try as you get acclimated with marketing to the Chinese.
One of my favorite sites for understanding Taobao and actually doing some quasi-English searches is TaoBao Focus. They mainly cater to buyers, but it gives you a good feel of the buying experience. Taobao, along with your Baidu and other search campaigns should certainly give you the exposure you are looking for in China.