Founded by Alibaba Group, it facilitates business-to-consumer and consumer-to-consumer retail by providing a platform for businesses and individual entrepreneurs to open online retail stores that cater to consumers across Greater China and beyond.
Sellers are able to post new and used goods for sale on the Taobao marketplace either through a fixed price or by auction. The overwhelming majority of the products on Taobao are brand new merchandise sold at a fixed price; auctions make up a very small percentage of transactions.
 Payment platform
Alipay, an escrow-based online payment platform, is the preferred payment solution for transactions on Taobao.
Taobao reported more than 190 million registered users as of April 30, 2010 and generated gross merchandise volume of more than US$29 billion in 2009. In April 2010, Taobao ranked 16th overall in Alexa's internet rankings. 
A distinctive feature of shopping on Taobao is the pervasive communication between buyer and seller prior to the purchase through its embedded propriety instant chat program, named WangWang. It has become a habit among Chinese online shoppers to “chat” with the sellers or their customer service team through WangWang to enquire about products, engage in bargaining, etc. prior to purchase.
In January 2010, Alibaba Group said it expects gross merchandise volume on Taobao to double from 200 billion Chinese yuan in 2009 to 400 billion Chinese yuan in 2010, as China’s e-commerce market is expected to grow significantly in the next five to eight years.
In May 2010, Taobao and Yahoo Japan launched a cross-border retail initiative that allows Chinese consumers to purchase Japanese products from Yahoo Japan shopping and Japanese consumers to purchase Chinese products from Taobao. For the Chinese consumers, Taobao launched a Chinese-language portal called TaoJapan (www.taojapan.com
) offering Japanese products. For Japanese consumers, Yahoo Japan added a Japanese-language portal called “China Mall” to its shopping platform. However, in line with import/export restrictions in both countries, certain products are not available to non-local buyers; for example, mobile phones listed on Yahoo Auctions are not carried over to TaoJapan and certain name-brand goods listed on Taobao do not carry over to Yahoo Japan's China Mall.