http://blog.renren.com/share/383582358/16289835300
Alibaba has carried out its IPO several weeks ago. Its primary division, Taobao, has become a really successful online shopping platform in China. Some consumers are not satisfied with shopping domesticly, but globally, since some luxury goods like Louis Vuitton and Rolex are of higher price in China than overseas because of the tariff. Therefore, these consumers want to purchase them overseas. And Taobao seized this opportunity and launched a service, in which Taobao recruited some overseas students from China and become a kind of agency between these students and the desiring consumers in China. I will analysis this situation from the perspective of an overseas student.
At first, if we overseas students purchase goods indirectly for consumers in China via this Taobao’s service, we can’t actually make much profit. Let’s say I bought a good that tagged $800CAD, which is approximately ￥4800RMB. Taobao will firstly buy it from me at ￥5000RMB, through which I will make ￥200RMB profit. Then, Taobao will sell it as ￥7000RMB to broad groups of consumers, through which Taobao will make ￥2000RMB profit. And the post-tariff price of the good is ￥10000RMB. So it is a new Revenue Stream of Taobao, by which Taobao makes the most profit at a competitive price which ensure its quatity of demand. But I makes little revenue.
On the other hand, if I directly buy the same good and bring it back to China to sell, I can tag it ￥6000RMB and I’ll make ￥1200RMB profit, which is 6 times more than the former one. Meanwhile my price is more competitive than Taobao’s price. Nevertheless, my Customer Segment is much more narrow. My potential customers are limited to friends, relatives etc. who can trust me more than Taobao.
To conclude, if overseas students want to make more profit by doing overseas purchasing, they should sell directly to thier customer. If they want to sell more, they can use Taobao as an agency.
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