Taobao, China's biggest online retailer, is now providing more information on its website to allow users to shop around and get feedback from other users before purchasing anything from the latest iPhone, to home decorating materials, to something as simple as an embossed bookmark.
The expansion into what might be called a "one-stop online shopping" raises the stakes for rival Baidu in the battle to grab users.
Domestic firms have been eager to grab some of Google China's market share since Google started redirecting users of its Chinese mainland site to its Hong Kong site in March.
Many of Taobao's 200 million registered users are now taking advantage of information being delivered to them by Taobao from other business-to-consumer (B2C) websites. Eventually product research and purchase availability may even extend to vendors who aren't on Taobao.
In the middle of November, Taobao began trial operations of its search website Etao.com. Starting last Friday, users were able to visit Etao directly from a "shopping guide" subpage noted at the top of Taobao's home page. That location eliminates a lot of marketing cost to acquaint users with the new service.
Besides product listings from Taobao vendors, users also have access to comprehensive information about products and to what other people are saying about those products on other online discussion boards.
"Independent B2C vendors will be able to attract attention from hundreds of thousands Taobao buyers every day, and we hope more websites will become our collaborators," said Zhang Qian, who heads an Etao staff of more than 100.
Taobao has about 80 percent of China's online retail market.
Not to be outdone, Baidu, operator of China's most popular online search engine, also launched a shopping search engine in October. It is not an independent website, but part of its open search program.
It is now connected with nearly 30 B2C website operators, who need to standardize their product labels so that Baidu can smoothly grab their information.
Baidu has blocked products from Taobao, claiming this could hurt small business owners who put keyword advertisements on Baidu.
Currently, for some best-selling consumer electronics, Baidu displays results for Youa, the consumer-to-consumer (C2C) platform, and for other web pages from online communities outside Baidu.
C2C platform Youa was launched in 2008 as Baidu's first attempt into the e-commerce sector, but by the end of this year's first half, it had attracted less than a 1 percent market share, according to research house Analysys International.
From my observation, search engines targeted at e-commerce will have the greatest potential in a very competitive market where Baidu has long held a dominant position.
Now that position is being challenged.
A shrewd buyer may now find Taobao a more congenial site for shopping. With one click, the buyer will be able to access product details, prices and user feedback from a variety of sources, without all the hassles associated with surfing through various websites.
Online shopping and financial services are rapidly becoming as important to netizens as online games, news viewing and social networking.
According to Ruan Jingwen, joint president and chief operating officer of Internet consultancy iResearch Inc, advertising spending on news portals will drop to less than 20 percent from about a quarter in three years, and marketing money will move to emerging social network websites and online shopping platforms.
Web users who search for information on specific products are exactly the kind of serious buyers that brand-name companies and online vendors want to target.
Ruan said China's online transaction volume will overtake that of Japan in 2012 and will surpass that of the US in 2014.
Sogou, the search engine by Sohu Inc, and Microsoft's Bing are also providing search results for Etao.
Alibaba Group Senior Vice President Wang Shuai told Shanghai Daily that Etao chose to partner with Bing and Sogou because they're suitable for its business.
Taobao and Hong Kong-listed Alibaba.com are the two core business units of Hangzhou-based Alibaba Group.
In October, Baidu and Japanese e-commerce company Rakuten committed US$50 million to the launch of their B2C website Lekutian. It is available for registered company owners to launch their marketplaces. Lekutian is different from Taobao's C2C platform, where individuals don't have to provide guarantee deposits.
Baidu said it hopes that search traffic will bring a significant number of users, but oddly enough, my search for several popular mobile phone models on Baidu didn't turn up any of the links to the vendors on Lekutian.
Etao said it's willing to accept applications from Lekutian if Baidu is willing to join the open platform of Taobao.
Baidu refused to comment on the issue.
Taobao Chief Financial Officer Zhang Yong said he expects Taobao to have several revenue streams, including banner advertising, keywords search advertising and commission fees from authorized vendors.
In future, he said, Taobao will become an aggregated platform combining a search engine, news portals and online shopping, as well as discussion communities centered on online shopping.
Now the challenge is for Baidu to raise user awareness and attract more vendors to its site.
Otherwise, its efforts to expand into the online shopping sector are likely to prove to have been in vain.
