Being a domestic company, Taobao received a significant indirect support from the Chinese government. In order to control the entire business environment, Chinese government controlled the entire financial sector. On the other, the economic enhancing economic condition of China is primary factors for eBay’s market expansion. Prior to the emergence of Taobao, eBay was enjoying a high growth in its online shopping business due to increasing purchasing power of Chinese consumer. On the other hand, the Chinese people were also enjoying the new experience of convenient online shopping. Since 2002 to 2005, the online shopping became very popular among Chinese consumers. In spite Chinese government’s strict regulation on online shopping market, it lacked improved legal framework for the prevention of online fraud. This had caused to develop a feeling of afraid among consumers regarding online shopping. During the first half of 2000, Chinese online shopping market was not very matured in terms of technology common ring to other developed nation. However, the number of internet users in China was very high and rising that has led to growth of online shopping industry and it has graphically presented. Factors Affecting the E-tailing Industry in China.
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