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Taobao.com opens home furnishings showroom

Updated: 2011-05-31 09:37

By Joe McDonald (China Daily)

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On the opening day, shoppers at the Taobao Mall were test-sitting sofas and flipping through channels on big-screen TVs.

"Compared with photos on the Web, I can really touch the things, so I can put more trust in them," said Yu Jingyuan, an engineer for a computer company who was looking at a stall displaying kitchenware, "I can trust the sellers online."

China has by far the largest number of Web users, with 457 million people online as of Dec 31. However, just 10 percent of them shop online, compared with the US level of about 70 percent, leaving room for expansion.

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In contrast to the United States, Europe and other developed markets, China's online merchants enjoy the unusual advantage that they face no entrenched retail giants with decades of market dominance and strong brand names.

Brick-and-mortar retailing is fragmented, leaving competitors without the financial might of their counterparts abroad. The top 20 account for less than 10 percent of China's annual sales, far below the 50 percent market share of the US top 20.

Alibaba and other companies have developed online payment systems to serve customers without credit cards. In response to concerns about product quality, some release the money only after the buyer is satisfied.

In big cities, delivery services that draw on China's abundant supply of labor can supply purchases from local sellers to buyers the same day.

Taobao says it has no plans to open showrooms to display other goods, but the manager of its new Beijing mall had a warning for rivals.

"In the online world, nothing is impossible," said Ye Peng.

Associated Press

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