Taobao Reaches RMB 1.5 Bln in 2009 Ad Revenue
Netease Tech, 4/12/10
Wang Hua, senior director of advertising products and operations for C2C and B2C e-commerce site Taobao, has said that Taobao has 400,000 paying vendors, accounting for 20% of all vendors on the site, and its 'Zhitongche' paid search ranking service has 100,000 customers. In 2009, the site's advertising income exceeded RMB 1.5 bln. Transactions on Taobao Mall (Taobao's B2C business) reached approximately RMB 10 bln, or 5% of all transactions on Taobao.
Wang Hua said that Taobao's advertising business growth is far outpacing that of Chinese internet company Baidu (Nasdaq: BIDU), and that Taobao's advertising income may exceed Baidu's in the future, although Wang was unable to predict a date for when this would occur.
Wang said that in 2009 Taobao's advertising income was primarily from its Taobao Zhitongche, Taobao 'Maiba,' and Taobao 'Taoke' products, with Zhitongche being the largest revenue source.
Taobao 'Maiba' pools vendors' merchandise together for display through special features or events, which are then promoted in spots on Taobao's site (including placement on Taobao's high-traffic home page).
Taobao 'Taoke' is an affiliate program that gives vendors additional promotional opportunities via Taobao's alliance of member websites.
According to information from several sources, advertising currently comprises 80-90% of Taobao's income, with the remaining 10-20% coming from value-added services and commissions from sales in the Taobao Mall.
Keywords: online advertising business model e-commerce Taobao Internet revenue B2C C2C Wang Hua Zhitongche Maiba Taoke ad union
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