【Abstract】Recently Taobao has become the most popular online shopping website and the leader in C2C electronic commerce in China. Its success is due to effective application of localization strategy. This paper illustrates how Taobao carries out this strategy.
【Key Words】Taobao， localization， strategy
1. Market Entry by Free Charge
To build a brand， Taobao plans to charge no fees in the first 3 years. It thinks that internet users in China are now in a transitional period， from net citizen to net businessman. Only by letting users get real profits from online trade can Taobao receive more online traders. Free charge is one of its ways to lower the threshold.
Free charge is a sharp weapon for Taobao to be a winner in such a short time （Shi Zhijun 85）. The strategy makes Taobao grow rapidly and become the leader of C2C， which has taken up more than 60% market shares in two years.
2. Cooperation with Banks
On Oct. 27， 2003， Taobao and Zhejiang ICBC signed an agreement. This model with E-bank settlement creates a C-to-C credit guarantee cooperation system. When Taobao brought out this service， people’s confidence in online payment increased a lot， laying a solid foundation for its business development.
3.Shopping Platform with Sohu
4.A Secure Trading Platform
In July， 2004， Taobao made a cooperation agreement with the Ministry of Public Security to build a “national citizen identification number enquiry service center”， which provided a more secure trading environment. Through this platform， Taobao would submit the registers’ information to be checked， and the result will be sent. Those who use fake ID will be spotted. This cooperation has greatly enhanced the popularity of Taobao （Yang Jianzheng 145）.
5. Social Media Tools
As a top online wholesale platform， Taobao develops a digital communication strategy to facilitate operation. It works so well that it almost doubles the sales in the latest two years. Compared to eBay， Aliwangwang is an important tool. EBay forbids buyers to contact sellers before they bid the goods in order to control charges， and do not support private communication between sellers and buyers. However， Taobao brings in a special online talking tool similar to QQ. Taobao members can download it and use it to communicate with customer or seller for details of the product and transaction. By using it， they can discuss the quality and price of the goods； they can not only communicate with each other， which enhances confidence between both parties， but also participate in various high-quality activities for members. There is also a blog for each buyer and seller. In Taobao， every shop is actually a simple blog where owners can put up product information and price， create categories for different products and link to other shops. Moreover， after transaction， buyers may make some comments on the shop based on its product and services. Also many of them choose to write on the white board on the main page of the shop as a feedback. The shop itself is created as a form of blogging. Taobao also creates a blog system for members. Every member can automatically have a blog at his or her first successful registration. It can be accessed via buyer’s profile and main page of the shop owner. All these social media tools make more convenient and timely communications between buyers and sellers. And these special services on the other side can bring much fun for users of Taobao. That attracts more players for Taobao. 6. Alipay
One of the restrictive factors of E-commerce development in China is the issue of payment. That many consumers in China do not dare to do online shopping is due to fear for deception when making online payments. Taobao knew this worry and led the way in launching a third-party payment platform， Alipay， which gained many consumers’ approval. Alipay is a particular secure payment service focusing on online transaction. It was built up through Taobao’s union with ICBC， ABC， CCB， etc. By using it， Taobao is the credit intermediary. It is a service which temporarily keeps the money of the purchase before the buyer conforms to receiving the purchases. By using a third-party online transaction intermediary， more and more people are willing to do online shopping （Shi Zhijun 86）.