Blog Post

Open Sesame! The Chinese Dream (A Biz Review)

Why the Big Bro labels Ali Baba's treasure a Replica?

Once upon a time, there was a guy called Jack Ma. He accidentally opened a gold mine called "www" business. At that time, it was a Chinese box of too much potentials for him to imagine. He developed his web business into a Chinese model and built a massive central kingdom that has boosted domestic market and promoted a special small business industry even during the so-called economic recession since 2008. He opens a sesame street for a lot of unemployed lay-off households bringing back money to their families, poor college kids buying and selling products on campus for tuition, and single mothers making money virtually for mortgage and their kids' education. It's true, just like what NYT blamed contemporary Chinese value system, money can buy one's love on Taobao if you know how to bid for it. Social media in China is not different with their western counterpart such as facebook and linkedin in nature. They capture people's eyes with naked persuasions---telling you what's in trend and what you should take on for your wardrobe.

Do you still remember that hot high school queen bee? Do you want tofet connected to your HR manager-to-be's linkedin account and show off your connections? In Taobao's reviewing credential system, you get the same dazaling categories to check a store's credit history. In Chinese, it is called RP (Ren Pin), a social currency that identifies who you are, and more clearcut, how much are you worth. (For instance, in you have a fancier interface and you pay more.)

When Taobao is busy getting married with Groupon China, the promising B2C/B2B enterprise Taobao, Alibaba Group's retail marketplace,  found itself and its business rival Baidu branded as bad guys in United States Trade Representative (USTR)'s 301 Special Report on the Notorious Markets List on Feb 28th. I feel very sad about this news because a lot of third party websites have emerged during the last two years such as and targeting oversea Chinese students. Their missions are claimed to serve the oversea students who are longing to buy cheaper homemake products from Taobao, a marketplace that only serve in Chinese domestic market, and deliver them to the States (usually very very late).

Why Taobao's success inflames our friends in USTR?  From Taobao's inward development strategy, one don't see a "global" outreaching strategy in Alibaba, except for regional one that aims at Asian area. For now, I do not see any sign of Alibaba's Wall Street ambition. In China, we call counterfeiting Shanzhai (mountain stronghold), both a verb and a noun. For Taobao, Shanzai does has its market among their users. And the Shanzhai products seemed pretty fit in their local market. In many ways, Chinese market is a big and growing one. So its Shanzhai spirit may impact on a larger market. But not now. 

In USTR's blacklist scenario, Taobao is blamed because it is a very "prominent" e-commerce company in China, so is Baidu---a top search engine that leads you to crack software and download musics.  It's like saying you are making shitty stuffy for people in China, but I'm not gonna sue ya! We just "cite" you! (Taobao does not export, it imports from Global Buy. Some big partners, especially fashion companies hold their separate export lines. Alibaba does export, but its main markets are in latin America, Africa, and East Asia. One can always choose their business partners based on the country profiles if they only want, say, products from Taiwan. Also: see

As a B2B/B2C/C2C platform website, it runs AliPay, a virtual currency system that only accept Chinese banking system issued check/credit cards. Even Visa and Master's cards have to be issued from a Chinese bank in order to be used for Taobao bills. Because the simplicity of such payment system, Taobao's AliPay may not have credit cards fraud that often compared with PayPal and international credit card payment. If you have the billing and ID info, you can investigate any piracy case. It's not like what USTR mentioned in their report on the difficulty of investigating "The Internet traders who use these online markets to offer counterfeit goods". Taobao has its dark side. In fact, just in early Jan, Taobao was sued of trademark and copyright infringements in Haidian District People's Court. It's the inertia in deleting certain copyleft products and updating its service apps put Taobao on trial. On Feb 23rd, just before USTR's corresponding report,  Alibaba was found 2326 "golden" thieves who have engaged in international frauds in its online "mafia" shanzhai. However, it was amazing that Alibaba's CEO David Wei and Chief Operating Officer Elvis Lee resigned just in two days. A very quick respond from a Chinese company of Alibaba's size. The responsibility they were taking was offering fraudulent storefronts and golden statutes to potential undeserving vendors.

  If e-markets do not connect or interact, there would not be any global piracy and international counterfeiting, but there won't bigger business neither. Because people know what happens in Vegas will always stay in Vegas. And that makes Vegas special. In the last century, Japan, Hong Kong, and South Korea were big luxury products importers. Replicas were flooded in their markets too. But authentic luxury products managed to invade the Asian tigers and planted a bunch of flagship shops there. The real always beats the fake. But the fake has their symbolic positions in a transitional society. The motto is "fake it until you make it". 

Every time I open Amazon's student prime package, I would hope it containing stuff that are NOT made in China. Because I always know, if they are, I will be like a cuckold paying prices much higher for the same products than my country fellows.That's the price of cheapness. Because we have references, the exchange rates and price tags in mainland China's websites. For me, it is interesting that USTR emphasizes its concerns on global piracy, surprisingly, without any legal violation blame or US government's IPR motion. The salient concern goes back to how we value our business online. Every year, there were numerous high school students applying for Business administration majors and more in International Trade majors. More and more graduates are going aboard and taking MBA degrees in the United States. Business ethics is not something one can teach the young adults without letting them venture the dirty market first. Jack Ma reminds his employees the value of integrity after maybe the darkest week he ever had.

In facebook, you should learn the courtesy of defriending someone without getting noticed. In linkedin you should know what to highlight and what to hide on your personal profile. In Amazon, you probably would hesitate to save your card information but you know Amazon always remember! Taobao does create a dynamic network to the suit Chinese tastes, which outsiders, say, USTR may not understand. It is a culturally bounded virtual business environment that may only evolve in its own right. At the time my old-fashioned mother told me she wants to start a Taobao store in a Skype chat, I know Taobao becomes a part of our urban life. For me, I hope it is a good one for my mother. After her retirement, she needs something to kill her time. Yes, we may call it a typical Chinese Dream. And it's time to say Open Sesame!


No comments