Taobao is a widely known online platform in China - mostly young people use it for their personal shopping. People who do retail business on Taobao gather in some areas and form a "Taobao" village", where thousands of people are working in a related industry like photo taking, express delivery and package carriers.
Take Xiniujiao village in Guangzhou for example. About 3000 online Taobao shops are operated here, most of which are selling clothes for women.
Wangli, 29 years old, has been selling women clothes on Taobao for 6 years. His online shop has an annual revenue of 1 million yuan (about 110,000 euros). 6 years ago, he quit his first job in Fujian Province and came to this Taobao village in Guangzhou.
"A friend who had a Taobao shop at that time urged me to do online retailing like him', Wangli says. He decided to stay in Xiniujiao village for three reasons: his friend had already settled here; the rent of his house is moderate; his shop is located in the proximity to a wholesale market.
Wangli had no more than 5000 euro as initial capital. A personal computer and an internet cable was all he used to start his business. He did all the work: online customer service, purchase, carrying good, package.
Once the business gets started, many people hire their relatives
Every morning Wangli took a bus to the clothes market to seek potential bestsellers. In the afternoon he carried heavy bags of clothes back to his apartment, packaged the ordered clothes and sent them to the delivery men, and then he communicated with customers online until late at night.
The first year on Taobao, Wangli made a profit of 20.000 euro. The next year he hired his relatives and friends to work for him. In this way he brought out more than twenty people from his hometown in rural inland China to Guangzhou. His parents are happy to work for him. "Our family can stay together", his mother said.
Now Wangli's online shop can sell more than 1.000 clothes per day. But since more and more people start online retailing on Taobao, competition is more fierce than before. Wangli is thinking about employing a professional manager to manage his business.
For newcomers, doing business on Taobao is not as easy as when Wangli began. On the one hand they have to compete with the forerunners; on the other, Taobao is now charging much more from retailers than before. If they want to appear in the first few pages of search results, or decorate the page of the virtual shop, they have to pay more, which indicates that the cost consists of a relatively high promotion fee.