Alibaba to Invite More High End Manufacturers to Boost Online Image
After accusations of selling poor quality and even counterfeit goods, Alibaba Group Holdings is bouncing back by planning to rope in more high end manufacturers in efforts to boost the overall image of its online marketplace. Alibaba is teaming up with four quality inspection organizations to make sure that products that are sold directly by the manufacturer will conform to Chinese quality standards. Alibaba also said that it will be investing billions to attract more than 10,000 quality manufacturers in setting up virtual stores in its Taobao market place and created an annual sales target of 100 billion yuan for its high end goods.
Analysts applauded on the announcements stated that it would not only help exporters into tapping China’s domestic consumption market, but boost Alibaba’s image among international and domestic online shoppers. The president of Hangzhou based Alibaba Jin Jianhang said, that a number of Chinese consumers are showing a appetite for overseas products as a lot of them believe that made in China products can’t meet the demand of the country’s choosy middle class consumers. But in fact there are a lot of original equipment manufacturers in China that produce items for famous overseas brands. Thus the problem right now is how to match the demand with supply more effectively.
Taobao is now setting up a vertical channel tht is dedicated to sales by high end Chinese manufacturers. With more than 4.500 manufacturers with many exporting or producing for overseas brands which created online stores on the channel. And according to Alibaba this will bring their sales to top 15 billion yuan before the year ends. The chief executive officer for Shanghai based Wanqing Consultancy Lu Zhenwang said that Taobao is under increasing pressure from accusations of selling counterfeit goods and its about time that the did something to improve its image. Alibaba’s Tmall.com a business to consumer platform is also investing considerable amounts of manpower and money in targeting bogus online goods, but its virtually impossible for the site to be free of fakes due to the sheer number of small vendors present on the site.
Taobao’s vast offerings on customer to customer platforms presents huge management challenges by bringing more high end manufacturers directly into Taobao since the company eyeing a bigger picture rather than simply tackling the issues on counterfeit products.