Dynamic Tourism, China, Business

A quick intro for those of you who don’t know, Taobao is China’s C2C internet selling platform, similar to eBay or Amazon.  It’s owned by Alibaba Group and all the online payment transactions for the site happen by your bank in combination with Alipay (also of Alibaba Group).  By the way, why does no one notice how monopolistic Alibaba Group has gotten in this area?

You can buy literally everything imaginable on Taobao from mobile phone recharge cards to patio furniture and shoes.  I’ve bought shirts, shoes, books, etc on Taobao.

Setting up an account is relatively simple if you can read some Chinese.  All you need is an email account, password, and the ability to navi-guess around the site in Chinese.  Actually buying and paying online becomes more complex, requiring a local bank account with either 一卡通 or 信用卡.  But this is how most of us get our salaries paid anyway.  If you can find a local friend to help you set up the link between your Taobao account and your bank account (through Alipay, of course) the first time, its pretty easy to just type in your PIN number whenever you want to buy something in the future.  Taobaofieldguide.com has a much more comprehensive and picture-oriented description of how to search and buy on Taobao.  They also offer to help you do it, for a small fee of course.

Feeling relatively confident in my Chinese reading ability and comfortable navi-guessing and shopping on Taobao, today I decided to try my hand at selling on Taobao. And ran into a Great Wall. To sell on Taobao, you of course need a local bank account linked to Taobao through Alipay (again), which since mine was already linked was easy enough.  However, you also have to verify your identity, and while this may sound simple, for a foreigner, it’s not.

First I tried pretending I was a local because I have a local bank account, yada yada, Not so fine.  You must input the ID # matching the person who opened the bank account.  In this case, it has to be the number of digits on a local Hukou ID card (If you don’t know what a Hukou is, this post probably doesn’t apply to you…).  Well since I’m not a local, I don’t have a Hukou so my bank account was opened with my Passport, which obviously doesn’t have the right amount of digits.  Fail #1

There is an option for Foreigners to sell on Taobao. So next I tried that: first line, OK.  Second line, please input your Guarantor’s name, ID number, phone number, etc, etc.  Uh…FAIL #2.  So as a foreigner selling on Taobao is much more difficult.

I guess they’re afraid we’ll list something super expensive, let some poor unsuspecting local buy it and transfer the money, and then leave the country with his money.  Granted, it could happen, but what’s the highest value item anyone’s ever bought on Taobao (without first seeing the item)?  Maybe 10,000RMB, maybe 100,000RMB?  So all of US$1400 or US$14,000?  Is that really worth it?  Fail #3.  That’s why banks, credit cards, et al have insurance and fraud protection.

Anyway, as you can see I was a bit frustrated with my Taobao selling experience today and I wanted to save other foreigners the same annoyance and waste of time.  And I’m sorry, I don’t know what happens after IF you get a Guarantor to validate your account.

It’s also interesting to note the differences between Taobao and eBay.  Taobao takes the money immediately from the seller’s account and holds it in escrow while waiting for confirmation from the buyer that the item has been received (or a certain period of time has passed) before sending the money to the seller.  eBay lets the buyer and seller decide between themselves how and when to pay and ship.

Can I further point out that since Taobao holds the money in escrow awaiting confirmation of item receipt from the buyer, that the whole paranoia of foreign seller runs out of town with the money is NOT very likely.  Fail #4

And that’s today’s Taobao 101 Guide.