China officially had 338 million Internet users at the end of June. That number, bigger than the population of the U.S., indicates the massive room for growth in a country of over 1.3 billion people.
Taobao may seek to debut overseas in the long term. Its parent company has said it wants 1 billion people worldwide using Taobao in 10 years. But Taobao could have trouble winning users from established e-commerce players like eBay and Amazon in other countries, said Carini.
"They're doing very well in China and their challenge is going to be outside," he said.
Taobao makes almost all of its revenue from advertising and does not charge listing or transaction fees. The company expects to break even this year.
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