journal of digital research & publishing - The Sydney eScholarship ...

1 P M J O U R N A L O F D I G I T A L R ESEARCH & P UBLISHING
the products they purchased. Taobao brings users “sense of welcome and belonging” and
encourages them to “want to be more involved”. Some even feel that Taobao offers not only
transactions, but also a culture. (Chen, et al., 2007).
2 Similarity between eBay and Taobao in China Online Market
Reputation System
There are many sites such as eBay and Taobao using reputation systems, which include
“the cost of her physical facility and her understanding in the community”(Resnick, et al.,
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collect evaluating information such as feedback comments and rating scores of the sellers
from the past buyers and make that information available to the public for future buyers to
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of sellers, while negative ratings have a negative reputation effects. Moreover, seller
reputation effects on sales price, number of sales, and total revenue (Ye, et al., 2009).
By reading the seller rating, future buyers can get to know how credible that seller was
in the past and determine whether they would make the deal with that seller or choose
another seller.
With the development of Internet action sites, “reputation is common knowledge or at
least commonly available knowledge.” (Resnick, et al., 2004). Auction sales data collected
from eBay shows that “an increase of positive ratings from 0 to 15 resulted in an increase
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(Lucking­Reiley et al., 2007; Melnik, et al., 2005).
According to the study of Ye, et al. (2009), the reputation mechanism of Taobao is similar
to that of eBay. Seller ratings are often grouped into three categories: positive, negative and
neutral. There is a rating score “calculated for each seller based on total number of positive
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delays in product delivery, inferior product quality, and failure to acknowledge warranties”.
Positive ratings include prompt reply, great service (communication, packaging, and
shipping), low price and high quality product. In addition, a buyer can give their feedback
rating to a seller only after a transaction has been completed between the two parties (Ye,
et al., 2009). Users also have the opportunity to leave an on­line text comment and rated
individuals can respond to comments that they feel were unfair (Resnick, et al., 2004).
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