San Francisco Chronicle had an interview in early May. Excerpts:
Q: Where does your income come from?
A: Every business that Alibaba group launches, we give three years free to users. The purpose is to make sure that we understand the customer and the customer understands the service.
With Taobao, when we launched the Web site, we promised the market that it would be free for three years. It wasn’t because of competition, but because we thought you need to educate the customers.
You need to let them know what a real business-to-consumer auction is. Even now, we think it’s still too early to charge because the market is so big.