Taobao, a unit of Alibaba Group Holding, Ltd announced that it would allow 38 Chinese online retailers to open virtual stores on its site. According to the Wall Street Journal Taobao embracing smaller retailers marks a new strategy for the company, which in the past has focused on hosting stores for retail brands. The new strategy is designed to battle increasing competition from other rivals.
Alibaba had split Taobao’s business into three entities: Taobao Mall, a platform for retailers to sell to consumers; Taobao Marketplace, which operates a business linking individual buyers to sellers; and eTao, a service for searching across Chinese shopping websites.
Source: The Wall Street Journal 2011-09-20