Alibaba’s Chief Strategist: E-commerce in China is Competitive and Taobao Might Not Lead Forever

At yesterday’s eTao press conference here in Beijing, there was a Q&A session in which Professor Zeng Ming, chief strategist at Alibaba group, made a comment that caught my attention.

He said that the e-commerce industry in China is getting very competitive because the barrier of entry is low. He also admitted that Taobao might run out of steam one day and lose its market leadership which he said has caused him and his team “sleepless nights” (which sure sounds familiar).

On the 360buy issue, Prof. Zeng explains it is understandable and normal for its smaller rival to block eTao’s indexing spiders. And the very reason they blocked it, he feels, was because 360buy has the confidence to be the market leader one day.

He didn’t comment further on 360buy and moved on to reaffirm that eTao.com is built for the community. And by ‘community,’ he means, consumers, the merchandisers who list and sell items, and also competitors who compete to provide users with better prices and services. After all, users are the ones who will benefit the most from all this competition, stresses Alibaba.

Although I can understand some rivals being worried about potentially ceding control to Alibaba – and prefering people just use Baidu or Google to search for products instead – getting other sites to use Alipay third party login through eTao (or vice versa) seems like a brilliant combo. So even if Taobao (C2C) or Tmall (B2C) aren’t the leaders in future, with eTao, Alibaba Group will still be a major e-commerce force in China. But this time, through indexing spiders and – just my speculation – a highly possible commission-per-transaction model via Alipay.

Wild thinking; but it’s surely exciting times ahead for the folks over at Alibaba Group as rivals jostle and shove to try take down the current market leader.