I was viewing a programme that discussed about China's e-commerce especially Taobao in view of Alibaba upcoming IPO. Here are some interesting "statistics" throw up by one of the learned participant.
Current there are about 6m-8m merchants on Taobao out of an estimated 36m merchants in total in China. So Taobao has a market share of 20% of all available merchants in China.Out of all the transaction volume in Taobao, 60% relates to clothing, apparel, shoes etc. About 80% of the merchants are not making any monies but Alibaba profits margin are about 40%.Traditional apparel player like Li Ning have closed a few thousand outlets due to competition from Taobao and other online stores. I remember (I hope correctly) that temasek invested into Li Ning not too long ago when Li Ning was facing financial difficulties.Hope it will turn out ok.
So it seems that the platform is squeezing all the blood leaving little for the agents situated on the platform! The other e-commerce platform player JD.com that just listed in Nasdaq (making the founder a multi-billionaire instanstaneouly) barely break even in the most recent financial year.