With ~2million sellers, Taobao is leading the Chinese e-commerce market in terms of the traffic and the massive transaction volume daily, but people always question about how much revenue Taobao can actually contribute to Alibaba group as you know most of sellers on Taobao pay nothing for using the platform; Furthermore, more and more consumers starts complaining about the counterfeit sold on Taobao and trusting more on Taobao’s B2C platform Taobao Mall, which is one of the key reasons why B2C business is growing faster than C2C in China. In Taobao Mall, merchants need pay a yearly fee and be charged the commission fee, in some sense, Taobao Mall is doing a better job to monetize Taobao’s traffic.
Now Taobao and Alibaba want to drive B2C business faster and generate more revenue out of it. In January 2011, Alibaba and Taobao are to launch the 2nd B2C e-commerce platform, named WuMingLiangPin (literally means Not popular but with good quality). The officials explain the reason why they launch it: In order to become a seller on Taobao Mall, you have to have your own brand. But for quite a few merchants on Alibaba, they don’t have their own brand or their brand is not that popular, but there is good potential for them in the B2C market (i.e. selling product to individuals) as well. WuMingLiangPin is the platform built up for them.
In order to enter this new B2C platform, the merchant will be charged rmb 2980 per year as membership fee and also be charged some commission fee at certain rate. The key benefit for WuMingLiangPin member is that, like Taobao Mall, when consumer search for products on Taobao, the members will be listed at better position in the results for better exposure.
For consumers, the new platform could be a good news if Alibaba and Taobao can truly guarantee the quality. However, it might be killing thousands of small business owners on Taobao who will be losing lots of traffic unless they pay for the new platform.