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ABSTRACT
This study examines how Taobao, the dominant Chinese e-business platform, regulates the production, operation, and sales models of its e-shops, and the response to this regulation in the women’s original-design apparel industry. Drawing on ethnographic research with Shanghai-based Taobao original-design e-shops, this study shows that Taobao has normalized the ‘wanghong model’. This business model, which prioritizes internet celebrity and traffic generation through frequent online shopping festival promotions, tends to enhance the platform’s traffic rather than the e-shops’ sales or interests. Moreover, Taobao’s ‘consumer-first’ philosophy, responding to the socialist state’s left-leaning calls and competition from other platforms, places significant demands on practitioners’ time, making it challenging for the e-shops to manage the increase in returns along with sales. Taobao also requires practitioners to perform a large amount of emotional labor to provide customer service. Overall, a detailed analysis of Taobao’s platformization process complicates the simplistic understanding of China’s apparel industry transitioning from state-driven to market-oriented models. Instead, it reveals how the platform-mediated ‘market’ has become more diversified and stratified by various sub-platforms, affordances and business norms. Furthermore, it empirically shows how the axis of state-platform power has encroached upon the time, emotions, and energy of small businesses without enhancing their profitability.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 Double Twelve is a Chinese online shopping festival that takes place in China on December 12th each year. It was first launched by the e-commerce giant Alibaba in 2012 to boost sales during a traditionally slow period in the retail calendar. The festival offers discounts and promotions across a wide range of products and services, and has become one of the largest online shopping events in China, second only to the more well-known Singles Day (November 11th) festival, see Meng and Huang (Citation2017).
2 In Chinese, a women’s e-shop specializing in original designs is referred to as ‘原创女装店铺.’ A and H were participants in the study and provided valuable insights into their experiences as e-commerce entrepreneurs on Taobao. A, a native of Shanghai, comes from a family with a background in the apparel industry. After completing secondary school, she established her own original design women’s clothing e-shop on Taobao in 2006, utilizing her family-owned cloth factory in Shanghai. H, originally from China, studied at a university in the United States and established herself as a fashion blogger, primarily promoting Chinese original designs on Taobao. In 2019, she returned to China and partnered with A as a designer for their e-shop. Currently, H is responsible for fashion design and copywriting, while A oversees the other aspects of the e-shop’s operations, including the increasingly important livestreaming component.
3 As a publicly listed company, Taobao’s parent company, Alibaba Group, is required to disclose a range of information in compliance with the regulations of the stock exchange it is listed on, to ensure transparency and protect investors. This includes annual and quarterly financial reports detailing the company’s financial health, profits and losses, and cash flow. Information on corporate governance, such as details about the board of directors, senior management team, governance structures, and policies, is also made public. Significant event reports on matters that could impact the company's stock price, such as mergers and acquisitions, major contracts, product launches, or other important business activities, are disclosed. However, how Taobao manages, rewards, and punishes e-shops does NOT fall within the scope of what Taobao is required to disclose. Moreover, since Taobao frequently updates its rules regarding rewards and punishments, e-shops can only share their business experiences through their online communities. For instance, see the following webpage:
‘What are Taobao’s shop deduction rules? When will a shop be closed?’ available at https://zhuanlan.zhihu.com/p/145890061; ‘New sellers, please note: Familiarize yourself with these Taobao punishment rules!’ available at https://zhuanlan.zhihu.com/p/102094717; and ‘A year’s record of being deducted points by Taobao for selling ‘fakes’.’ available at https://zhuanlan.zhihu.com/p/102606282. This situation indirectly reflects how Taobao, despite safeguarding the interests of shareholders, investors, and consumers, squeezes e-shop sellers.
4 For instance, see Everyone Is a Winner during Double Eleven, published by Qian Min in the state’s mouthpiece People’s Weekly (2018, Issue No. 22), available at http://paper.people.com.cn/rmzk/html/2018-12/20/content_1899981.htm.
5 For details, see 2021 Taobao Livestreaming Annual Report via: http://blog.kurokoz.com/wp-content/uploads/2021/05/1621946393-218-taobao-live-2021-annual-report.pdf.
6 Alipay, Taobao’s premier online payment platform, stands at the forefront of facilitating secure digital transactions, offering a broad spectrum of financial services that range from simple money transfers to bill payments and mobile recharges. Taobao Livestreaming, a platform where sellers engage with potential buyers through live video, showcasing products and offering live demonstrations. Aliwangwang serves as the vital communication link within Taobao’s ecosystem, an instant messaging tool designed to bridge the gap between buyers and sellers, enabling them to negotiate, discuss product specifics, and address post-sale concerns efficiently. Taobao University is an unofficial educational initiative aimed at empowering e-merchants with the knowledge and tools necessary for optimizing their online presence.
7 Tmall caters to brand merchants and high-end consumers by providing a formal sales channel for branded goods. Xianyu offers a marketplace for second-hand items, facilitating buying and selling among users. Alimama acts as a marketing services platform, delivering advertising and marketing solutions to e-merchants. Juhuasuan is a group-buying platform that features limited-time discounts and promotions. Fliggy is a travel service platform offering bookings for flights, hotels, tours, and vacation packages, catering to the travel needs of consumers.
8 In Chinese, the strategy of ‘expansion first, profit later’ is expressed as ‘先扩张后盈利.’
9 In Chinese, 国家自主创新产品认定管理办法(试行), available at http://2015.casted.org.cn/web/index.php?ChannelID=31&NewsID=3242.
10 The Ministry of Science and Technology highlighted that nationally independent innovative products must possess several key features: they should have their own IPRs, unique brand names, and exhibit a high level of innovation. For instance, see the following webpage: https://www.gov.cn/zwhd/2007-03/16/content_552435.htm.
11 In Chinese, 中华人民共和国国民经济和社会发展第十四个五年规划和2035年远景目标纲要, available at https://www.pkulaw.com/en_law/dad03bd96074290cbdfb.html
12 In Chinese, 中国服装行业‘十四五’发展指导意见和2035年远景目标, available at https://www.cntac.org.cn/guihua/202110/t20211009_4195978.html.
13 Available at https://www.mckinsey.com.cn/wp-content/uploads/2022/09/麦肯锡2022中国时尚产业白皮书.pdf.
14 In Chinese, 网络交易管理办法, available at https://www.pkulaw.com/en_law/865562bd8fcf7d65bdfb.html.
15 For more details of Taobao University, see https://www.taobao.com/go/act/sale/tbu-teacher.php.
16 For details, see https://baijiahao.baidu.com/s?id=1736506013568661883.
17 For details, see Buyers On Taobao, whose Positive Feedback Rate Falls Below 95%, are Restricted from Placing Orders via: http://m.cnr.cn/news/20170605/t20170605_523786864.html.
18 For example, the company Jiangjunling provides analytical tools to help Taobao shops analyze their past customers, including return rates and buying behavior, see https://tool.musicheng.com/.