An empirical study on the pricing strategies of Taobao sellers

• Main Authors: Lim, Samantha Pei Yi, Zhou, Quanfeng, Dai, Sheng
• Other Authors: School of Humanities and Social Sciences
• Format: Final Year Project
• Language: English
• Published: 2014
• Subjects: DRNTU::Social sciences::Economic development::China
• Online Access: http://hdl.handle.net/10356/58971
• Institution: Nanyang Technological University

Taobao can be said to be the eBay of the East. Indeed, both face problems that arise from asymmetric information, which is the bane of online retail markets. By studying the behavior of merchants who supply certain models of Canon cameras on Taobao, we investigate how the information available on Taobao’s website affects their sales and pricing strategies. We collect and analyze 619 observations of Canon DSLR cameras to find out what motivates a seller’s behavior. We have three major findings. First we found that a seller uses good reputation and price premiums to signal good quality. Secondly, buyers utilize the non-price signals to evaluate the credibility of a seller. Lastly, return & refund service is usually offered along with non-premium price.