In August, 2010, Xie Tingting, then a senior design student at Zhejiang University of Science and Technology, was studying for her civil service exam, preparing for life after college. Becoming a cog in China’s giant governmental bureaucracy was a practical career choice, but it was hardly a dream job for the art student.
So when she heard she could earn some extra money by modeling clothes for online storefronts on Taobao, China’s largest Web-based retail marketplace, she jumped at the chance. “Being a ‘Tao model’ took most of my time and the money was good,” says Xie. Within a few months, she had become so sought-after, she abandoned her post-university career path and joined thousands of other young women who make a living posing for photo shoots used in online marketing materials and to promote products on Taobao.
Today, as one of the top Tao models, she charges RMB 100 for each piece of clothes she displays, sometimes posing in as many as 200 pieces in a day. Now 24, Xie bought her first car with her modeling earnings and is thinking about buying an apartment in her home city of Hangzhou. She even has a personal assistant, whom she pays RMB 8,000 a month.
Xie is one of the more glam examples of how Taobao since its inception 10 years ago has provided notonly new jobs for online vendors. The huge scale of Taobao Marketplace and its sister website Tmall, which together host more than six million merchants and more than 800 million product listings, has also spawned an extensive service industry revolving around e-commerce.
Taobao officials reckon that several million jobs have been created for “orange-collar workers” (so named because Taobao’s signature corporate color is orange) in a diverse array of professions. China’s e-commerce industry as a whole created direct job opportunities for more than 2 million people last year and indirect job opportunities for more than 12 million, according to a March 20 report from the China E-Commerce Research Center.
To name a few orange-collar jobs, there are Tao models like Xie; customer service agents; Internet marketing consultants and advertising specialists; professional buying agents; online retail software designers; product photography specialists; package couriers; warehouse operators. More than 800,000 “web store decorators” alone have designed more than 1.7 millionelectronic storefronts over the last 10 years, according to Taobao.
The growth in the ranks of orange-collar workers isn’t hard to explain. “As more and more merchants enter the e-tailing space, they need ‘insiders’ to either teach them how to kick-start their online business or to develop their online business for them,” according to a recent report on e-commerce in China by McKinsey Global Institute. Service activities up and down China’s e-commerce value chain generated $13 billion (RMB 83 billion) in revenue in 2011, according to the report. As the e-tailing market continues to boom, so too does the demand for specialized service providers.
Watch a video on the lives of Chinese package couriers:
One of the beneficiaries of this explosion of e-tail support jobs is Jiang Peng, director of e-commerce services for Hangzhou Wanqing E-Commerce Co.
In 2008, Jiang and a friend opened a Taobao store selling musical instruments, “but it was difficult to compete because there were already a large number of similar sellers,” Jiang says.
So with other partners including a software applications developer, Jiang two years agostarted a company dedicated to servicing other e-shops. “Becoming a service provider was much easier,” Jiang says. “The field was not big at the time, and we could pick and choose the clients we wanted to cooperate with.”
Today Hangzhou Wanqing E-Commerce Co. serves more than 300 stores—mostly in women’s apparel, cosmetics and home appliances—offering a range of marketing, branding, advertising and site design services, including custom retail software solutions. The company employs almost 200 people, with 70 in the advertising services department alone. The next step: buy a large online vendor. “We’re planning to acquire other businesses, so we can get back into retail side of e-commerce,” Jiang says.
Taobao has proven to be a potent job creator for people like Jiang because it’s an online marketplace. Unlike other retail websites and online shopping malls that buy and sell their own merchandise and handle their own inventory,deliveries and customer service, Taobao is a venue that connects consumers with millions of small vendors, most of them in need of support in one form or another.
According the McKinsey Global Institute report, marketplaces such as Taobao “act as one-stop shops that assist ‚Ä¶ businesses in launching quickly and with minimal start-up costs by providing the tools needed for setting up their individual online storefronts, listing items, and collecting payment. They can also connect sellers with certified providers of services such as warehousing and shipping.”
Marketplaces haveproven to provideretailers with flexibility and scalability, allowing them to expand into China without the risk of heavy upfront investment. The McKinsey report cites as an example Japanese clothing retailer UNIQLO, which was able to enter the China market with just three employees by subcontracting e-store operations to an integrated e-services company.
Taobao has helped generate a lot of unsexy offline jobs, such as parcel-delivery positions, as well as some controversial ones. On Taobao, retailers can hire contractors to pose as ordinary consumers and post favorable product reviews on popular social media sites, paying them a commission on the customers these fake reviews attract.
But the service business that has garnered the most attention is online modeling, which has become so large it has its own dedicated website called Tao Girl (mm.taobao.com) where nearly 38,000 models market their services.
According to a Taobao report, the average age of these workers is 23, and more than three out of four are part-timers. Some earn as much as RMB 50,000 in a single day, an amount a white-collar worker in a large Chinese city might make in six months.
The Tao model profession has even produced specialists, women who just offer “face, eye, legs, hands, mouth, waist, feet, breast, ear and buttocks modeling,” according to the Taobao report. The company estimates the Tao Girl website generated RMB 1.1 billion in product sales in the first half of 2012.
Yet the potential for orange-collar workers is still largely untapped. According to McKinsey, the combined revenue earned by e-commerce service providers is only about 10 percent of total e-tailing transactions. “Service providers are expected to grow much faster than the overall e-tail market as merchants increase their adoption of service providers to improve their own operations,” the McKinsey report states.
Here’s a snapshot of some e-commerce service jobs listed in Taobao and McKinsey reports:
Customer service agents. Many store owners outsource customer service as their businesses expand. Taobao estimates there are about 2.8 million people working in customer service on Taobao.com. Some agents answer questions via online chat or over the phone, some handle complaints, while others serve as shopping guides.
Marketing services. These consultants provide help to vendors so that consumers can find and compare their product offerings. Marketers assist in the purchase and placement of online advertising on shopping websites, search engines, portals, and product comparison websites.Some marketing consultantsprovide IT tools to help merchants optimize their marketing activity and spending by improving online search results or managing e-marketing campaigns.
Professional bargainers. These hired guns use automated bidding software on behalf of clients to snap up sought-after products before others can buy them. Some bargainerspurchase products for themselves and resell them online, making a profit on the price gap they negotiate from the list price. A fast computer, high-speed Internet access and familiarization with the buying process are tools of the trade for professional bidders, known in China as miao sha (seconds-killers).
Online retailing software vendors. IT companiesthat sellconsulting services and specialized software designed specifically for e-tailers, such as enterprise resource planning software, supply-chain and sales management software, and applications that make it easy to set up mobile e-commerce storefronts.
Integrated services. Outsourcers who handle all aspects of e-commerce, from setting up e-stores to running online businesses for merchants. Customers include small merchants that have not achieved scale, offline retailers trying to establish a presence online, and foreign brands entering China.
(This story was originally posted on Alizila on May 8, 2013)