Number of words: 106

Unlike Amazon, Alibaba’s consumer websites Taobao and Tmall carry no inventory. They serve as platforms for other merchants to sell their wares. Taobao consists of nine million storefronts run by small traders or individuals. Attracted by the site’s huge user base, these “micro merchants” choose to set up their stalls on Taobao in part because it costs them nothing to do so. Alibaba charges them no fees. But Taobao makes money—a lot of it—from selling advertising space, helping promote those merchants who want to stand out from the crowd.

Excerpted from page 5 of ‘Alibaba: The House that Jack Ma built’ by Duncan Clark