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Alibaba Group chairman and CEO Ma Yun speaks during a press conference on October 17, 2011 in Hangzhou, Zhejiang Provinceo of China. The value of transactions on Alibaba’s Taobao retail platforms doubled last year to hit $63 billion.

Alibaba Group’s Taobao websites are virtually synonymous with online shopping in China, but one venture capitalist with experience navigating the Chinese Internet says that may not always be the case.

In China e-commerce is all about discount shopping, said Hurst Lin, general partner at venture capital firm DCM and former COO of Chinese web portal and microblog operator Sina, but that won’t last. Mr. Lin believes that in several years, Chinese consumers will have more discerning taste and that online retailers with the best design and branding will challenge the dominance of Alibaba Group’s Taobao websites.

DCM has investments in several e-commerce companies focused on China, including online lingerie retailer La Miu and health and beauty seller Lumi. “Today, what you’re looking at is discount,” Mr. Lin said. “That’s what Taobao is all about—the cheapest stuff, comparison shopping.” What Taobao websites offer is similar to what eBay offered to online shoppers in the 90s, he said. “When I was in the U.S. in the 90s, I would go on eBay and check on the price first.”

Taobao Marketplace, a website for consumers to sell to other consumers, and Taobao Mall, where larger retailers can open online storefronts to sell their products to consumers, are currently the largest online shopping sites in China. But growing competition has recently begun to erode Taobao’s market share. Its share of online purchases in China slipped to 71% by value in the second quarter from 75% a year earlier, according to Analysys International.

But Mr. Lin said that “eBay is declining” in the U.S. and though Taobao is still on an upswing, its dominance will eventually decline as well. He and other venture capitalists are now looking for trends that will pick up two or three years down the line. Taobao “will have their heyday for another four to five years, then eventually consumers” will go to online retailers that specialize in specific product categories, Mr. Lin said, adding: “Taobao better go public.”

Alibaba chairman Jack Ma has said the company doesn’t have plans for an initial public offering of Taobao, but that he wouldn’t rule out an IPO for Alibaba Group. The value of transactions on Taobao had doubled last year to hit 400 billion yuan ($63 billion). Taobao sites didn’t disclose transaction numbers this year, but Mr. Ma said he expects the number to reach a trillion yuan in 2012.

Mr. Lin believes e-commerce companies, rather than simply competing on price, will eventually have to differentiate themselves by offering better design, more entertainment value and services that increase margins. For examples, he cited flash sales websites that add a sense of urgency by setting time limits for people to keep purchases in their virtual shopping carts or a website that offers buyers the ability to do swaps with other buyers if they have a last-minute change of heart after placing an order.

Mr. Lin said 360buy.com, also known as Jingdong Mall, another Taobao challenger, has done well to attract consumers with low prices and fast delivery service. “It’s fantastic,” he said, but it’s still unclear how the company will make money given its low profit margins. He said he believes 360buy “needs to go one step further,” adding “it’s not all about discounting. It’s about information, it’s about entertainment, it’s about social” and “when those things come you can charge incremental value.”

An Alibaba Group spokesman said the company is addressing the changing tastes of Chinese consumers with Taobao Mall, which “is focusing on service quality” and with its shopping search engine eTao which “provides info other than pricing,” including “product guarantees, user reviews, shipping options etc.”

– Loretta Chao. Follow her on Twitter @lorettac

Zuo Jia Wei Quan Lian Meng, which translates to the Union for the Protection of the Rights of Writers, a group representing dozens of writers and publishers who joined together to lodge complaints about copyright violations, says that hundreds of applications found in Apple’s App Store are offering unauthorized downloads of hundreds of books.

Bei Zhicheng, the group’s spokesman, said their complaints to the Cuptertino, Calif.-based company have been ignored. Their complaints follow a showdown between the same group and Chinese search giant Baidu over a document-sharing service called Wenku, where users were uploading books without permissions.

The group will be led by a board of directors composed of five authors and five publishers, and has set up a three-million-yuan ($464,000) fund with donations from Mr. Bei, who is also the CEO of Beijing Tomorrow Hi-tech Software Co., and two other executives.

Mr. Bei said that he and the two other donors—Li Guoqing, CEO of e-commerce website Dangdang, and Liu Qiangdong, CEO of Jingdong Century Trading, which operates 360buy.com—each contributed one million yuan. The three won’t be on the board, nor will they receive any returns on their donations, Mr. Bei said.

The fund will be used to sue Apple, Baidu and other alleged Internet copyright violators over the next two years, Mr. Bei said, though no lawsuits have been filed yet. He said the group is in the process of sending takedown notices to the companies and collecting evidence of the alleged copyright violations, adding that 20% of any money awarded by the courts or through settlements will go back to the fund for future lawsuits, and 80% will be returned to the writers and publishers whose copyrights were violated.

An Apple spokeswoman declined to comment. The company’s agreement with developers who list applications in its App Store includes a requirement for those developers not to violate, misappropriate or infringe copyrights. But individual in-app downloads, such as specific books or other files offered through applications, aren’t approved by Apple.

When asked why the group is targeting Apple rather than the application developers, Mr. Bei said the group believes Apple should more strictly enforce its copyright policies on Chinese developers because global copyright enforcement tactics don’t work in China. In China, Internet service providers “had to adopt stricter policies” than their U.S. counterparts, he said, pointing to piracy initiatives of Chinese websites Youku and Tudou, which resulted in the deleting of many copyright-infringing videos uploaded by users. “In China, copyright policies should be more strict,” he said.

Baidu, which in March took down nearly three million documents on Wenku after writers and publishers complained, has said it will shut the service down if it can’t resolve its copyright disagreement with writers. Baidu spokesman Kaiser Kuo said the company still stands by this promise, and that “Baidu is still eager to find an amicable way forward. We believe we made a good faith effort to address the concerns expressed by writers and publishers in March and will continue to do our utmost to make sure that infringing content uploaded by users is removed promptly.”

The company has made changes to its site since meeting with writers earlier this year, including highlighting on its site a message in red type warning users not to upload unauthorized documents, and sets size limits and identification technology to try to prevent infringing-content uploads.

The writers group says many infringing works can still be found on Wenku, but that it is more offended by the alleged appearance of unauthorized works in Apple’s App Store because Apple may be earning some revenue from the applications, and that users of the App Store tend to be white-collar professionals who can otherwise afford authorized versions of the books they are downloading.

Google, which has also come under fire in China for its controversial book search service, is facing a lawsuit from Shanghai-based novelist Mian Mian, for the scanning and publishing of part of her novel “Acid Lover” without her permission. The author, who is suing for about $60,000 and an apology, said Google’s practice of digitizing books, even parts of books, without giving her a choice over whether to be included and over what keywords should be applied to her work, is a violation of her rights. Such practices, regardless of how much writers are compensated, she says, have a negative impact on the literary community because they disregard the wishes of content creators.

A court hearing is scheduled for next March.

Google says the its intention for Google Books is to improve search results, enabling users to find books related to their searches, and to  revive  difficult-to-find and out-of- print titles.  ”We work with over 40,000 publishers and 40 libraries across the world to make these books searchable and discoverable online,” a Google spokeswoman said. “Google Books promotes and encourages book sales—helping to ensure that authors and publishers are rewarded for their creative efforts.”

The spokeswoman added that the company honors authors’ wishes, and moved to quickly exclude Mian Mian’s book from the service so that “no portion is available to users on Google Books.”

–Loretta Chao, Yang Jie and Bai Lin

Sina

A screenshot taken May 17, 2011 of billionaire venture capitalist Wang Gongquan’s Sina Weibo account shows a post announcing his elopement with a mistress.

This post has been updated. See below.

If only Chinese screenwriters could dream up stories like this, Beijing might not have to erect quotas to protect the country’s film industry from Hollywood.

In a move that alternately shocked and thrilled much of China’s Internet-using population, billionaire venture capitalist Wang Gongquan took to his microblog late Monday night to announce, in rather dramatic terms, that he was eloping with a mistress.

“To all friends and relatives, to all colleagues, I am giving up everything and eloping with Wang Qin,” Mr. Wang, 49 years old, wrote on his verified account on Sina Weibo, China’s most active microblogging service. “I thank everyone for the years of care of assistance, and wish everyone happiness! I have no way to face everyone’s expectations and trust, and I have no way to explain this to everyone. I feel ashamed and so am leaving without saying goodbye. I kneel down and beg forgiveness!”

A celebrated businessman, Mr. Wang was among the original founders of Vantone, one of China’s largest private real-estate developers. He eventually went on to found a venture capital firm, CDH Venture Partners, which claims a $5.5 billion portfolio and was one of the early investors in Chinese antivirus software maker Qihoo 360.

Qihoo 360 went public in the U.S. in March, raising $175 million in what was then the year’s most successful U.S. IPO by a Chinese company.

Following the Qihoo IPO, Mr. Wang took a monthlong vacation, posting photos from the Everglades, Miami Beach and Hawaii to his Weibo account.

Coming two weeks after he returned to Beijing, the announcement of his decision to elope had been reposted more than 60,000 times and drawn more than 30,000 comments by Tuesday afternoon. “Wang Gongquan Wang Qin” was the top search term on Baidu for much of the day Tuesday.

Conducting a  so-called human flesh search, many have speculated that Wang Qin, the woman mentioned in the announcement, is the 34-year-old founder of a Jiangsu-based investment company called Zhongfu. Calls to the company went unanswered Wednesday.

In a family-first country where marriage is often considered a matter of practical compatibility—romantic love being an indulgence best left to pop songs and daydreams—Mr. Wang’s declaration has sparked an outpouring of passionate responses.

A number of commentators have slammed Mr. Wang, who is married, for shirking his responsibilities and failing to act his age.

But at least as many have gushed forth with messages of envy and support, with some even suggesting he should have chosen someone younger.

“In this money-obsessed society, it makes me happy to know you can make this choice,” one microblogger wrote on Sina Weibo.

“A person who lives honestly,” wrote another. “The greatest measure of success in life isn’t how much money you make, how much capital you accumulate, it’s whether or not you’re able to lead the life you want to live.”

The decision appears to have genuinely caught people by surprise, including real-estate mogul Pan Shiyi, one of Mr. Wang’s original partners in Vantone.

“Please get in touch with me as soon as possible!” Mr. Pan wrote on his Weibo account Tuesday afternoon after apparently failing to reach Mr. Wang by phone. “Your family is incredibly anxious, they’re worried about your safety,” he wrote in another message an hour later. “Please contact them.”

This isn’t the first time members of the Chinese business elite have used Sina Weibo to discuss matters arguably best kept out of the public eye. In January, Li Guoqing, the chief executive of online bookseller Dangdang, hopped on the service to openly slam Morgan Stanley for undervaluing the company’s IPO, using a string of vulgar slurs and made-up “rock and roll lyrics” to  insult another person on the site who claimed to work for the investment bank

It wasn’t clear where Mr. Wang planned to go or what the announcement would mean for his company. Reached by China Real Time for comment, a woman at DHG who would not give her name said Mr. Wang and his entire team were out of town for a meeting but wouldn’t provide contact information for any of his team members.

Attempts to call Mr. Wang’s mobile phone were met with a message saying the number had been disconnected.

The extraordinarily public way in which Mr. Wang revealed his plans has lent credence to rumors that the entire story may is a ploy meant to drum up publicity for a new investment company he plans to form with Ms. Wang. Others have dismissed that possibility, however, noting that Mr. Wang is wealthy enough not to have to resort to cheap publicity stunts.

Those seeking clues as to what may be motivating Mr. Wang, a noted poetry fan, are left only with a short poem he posted to his Weibo account a day before he announced his plans to run away. Titled an “Ode to Elopement,” it reads in part: “Always facing the whispers of the wind with a heart longing for love, I loathe nothing more than laboring for profane achievements. Who has ever seen mountains of gold and silver last through 10,000 generations? Throughout the ages, the only precious thing is this feeling!”

UPDATE, May 18, 9:15am: Our sister blog Venture Capital Beat reports that CDH has distributed a letter to limited partners saying Mr. Wang is taking some time off and that both the venture and private equity fund were operating normally. “If it actually impacts his job and he’s leaving his fund as a result of this personal issue,” then it is a problem, says one limited partner. “He is the key icon over there.”

– Josh Chin. Follow him on Twitter @joshchin

The service would be welcome by many people for whom access to original copies of Chinese books is difficult or impossible. Previous options have been limited to going through a scattering of overseas Chinese book dealers, usually located in major cities with large Chinese-speaking populations, or buying them directly in China and hauling them back. China has a number of online document-sharing services through which users swap electronic copies of books, and some online merchants offer books cheaply in PDF-format, but many such copies are unlicensed.

The new service promises to make the process a lot more convenient. Still, buyers should beware of expensive, non-refundable shipping fees.

Operated by privately-held Beijing Jingdong Century Trading Co., 360buy will offer the books for the same price as it does to buyers in China, so “overseas readers will be able to purchase books at the most affordable prices,” the company said. Books will be delivered by DHL within one week and payments can made in U.S. dollars through eBay’s PayPal, based on an exchange rate set by 360buy.

Among the offerings are Huang Tieying’s popular “Haidilao: You Can’t Touch This” (海底捞你学不会), detailing the customer-first business strategy of one of China’s best loved hotpot chain (around $3.70), and Wang Xiaofang’s reliably entertaining fiction series, “Stationed in Beijing” (驻京办主任), about the corrupt dealings of local government representatives in the capital (roughly $10.50 for the box set).

China history geeks can now mail order one of three different versions of the Qing Dynasty classic, “Complete Library of the Four Treasuries” (四库全书) instead of lugging the tome back on the plane (between $50 and $130).

Meanwhile, fans of Tiger Mother Amy Chua can discover how her book on parenting sounds when translated into Chinese (我在美国做妈妈; roughly $2.50) or compare it with Yi Jianli’s perennial parenting best-seller “A Good Mom Beats a Good Teacher” (好妈妈胜过好老师; around $2.60)

A scan of the company’s shipping rates, however, shows that delivery fees would be hefty. For standard air shipping, customers in North America will have to pay 50 yuan per item ordered, plus a 150 yuan shipping fee. The fees “include order-based freight, export duties and other taxes,” according to 360buy’s website, though customers would be responsible for any fees collected by destination countries, the website says.

The company estimates delivery time to be one week, but warns that it will not bear responsibility for any time or money lost if shipments are embargoed by Chinese Customs or held up by other customs procedures. Customers entitled to refunds may request returns within 15 days, but only product payment and collection charges can be refunded, not the cost of shipping.

In addition, overseas customers will not be entitled to pricing guarantees, coupons, order discounts, promotional offers or gift card payments.

Dangdang, a 360buy competitor that listed on the New York Stock Exchange last December, ships outside Greater China for a fee of 50% of the order total, with a minimum fee of 50 yuan, and delivers in four to eight weeks, according to its website.

A 360buy spokeswoman said that the company had received many requests for the company to ship its products internationally from overseas Chinese customers who couldn’t easily find Chinese books outside of China. Like Amazon, 360buy’s online offerings for consumers inside China include a broad range of products such as electronics and cosmetics. The company was founded in 2004 by the owner of a brick and mortar electronics retailer, and has become one of the biggest e-commerce websites in China.

– Loretta Chao. Follow her on Twitter @lorettac

The term “ex-wife” didn’t appear in Tudou’s original initial public offering prospectus in November, but it appears 22 times in a revised version filed last week.

Rumors of a potentially problematic dispute between Tudou chief executive Gary Wang and his ex-wife have run rampant in Chinese tech-watching circles for months, but the company hadn’t confirmed anything until disclosing details in last week’s filing. According to the filing, Mr. Wang’s ex-wife, who isn’t named in the document, launched a lawsuit against him in a Shanghai court in October that could disrupt the company’s operations and finances.

Tudou’s IPO, in which it would sell up to an estimated $120 million in shares, has been delayed since November for reasons that are unclear. Meanwhile Youku.com, Tudou’s top rival in China’s online video market, raced past Tudou to raise $203 million from an IPO on the New York Stock Exchange in December.

The lawsuit against Mr. Wang demands division of some of the equity that he holds in Quan Toodou Network Science and Technology, one of the companies through which Tudou, based in the Cayman Islands, operates its services in China. The suit alleges the equity is part of the former couple’s “community property.” Under Chinese law, a married couple’s community property should be equally divided upon divorce, Tudou’s filing said.

If part of Wang’s equity ends up being transferred to his ex-wife or another third party, Tudou might have to renegotiate to maintain its business arrangements with its affiliate company, Tudou said. If negotiation fails, then “the ineffectiveness of control over Quan Toodou could cause significant disruption to our business, operations and financial condition, and could have a negative impact on our ability to execute” certain corporate actions, it said.

Tudou declined to comment, and the size of the risk wasn’t immediately clear.

The revised prospectus also revealed Tudou’s full-year financial results for 2010, which were less than encouraging. Tudou made a net loss of 362.4 million yuan, or $54.9 million, last year, the statement said, more than double its net loss of 145.1 million yuan in 2009. Adjusted for items like share-based compensation and fees paid to third-party advertising agencies, the company’s net loss was 107.2 million yuan last year, down from 133.3 million yuan in 2009.

Youku narrowed its net loss in the fourth quarter to 37.7 million yuan, or about $5.7 million, from 46 million yuan a year earlier, according to the company’s most recently quarterly financial statement.

Tudou’s listing would add to a series of IPOs by Chinese Internet companies that some analysts say could mark the start of an Internet bubble in the country. Youku’s shares closed Monday at $58.88, trading at more than four times the company’s IPO price of $12.80 despite the company being unprofitable as of its most recent financial statements. Other Chinese Internet companies that have filed for public listings in the U.S. include dating website Jiayuan.com International and Chinese social-networking company Renren, often called “the Facebook of China.”

Renren, which plans to raise as much as $743 million, in a listing on NYSE, last week revised a key user number in its prospectus, highlighting the murkiness of data in China’s high-flying Internet sector. The revision means the Renren.com user base rose 19% in the first quarter, compared with a previously reported rate of 29%, though its total number of users in the first quarter didn’t change.

Rumors circulated last month that Tudou was in talks with companies like Youku to seek a buyer. Tudou and Youku both declined to comment.

It remains to be seen how Tudou’s delay could affect its IPO. Mirae Asset analyst Eric Wen said the delay could be positive since Youku’s upbeat performance since its stock debut could raise expectations for Tudou.

But another analyst, who asked not to be named because she wasn’t authorized to talk about the company, said the delay is a “major negative” that could affect IPO pricing. “The landscape is changing towards a negative direction for Tudou” amid tougher competition from Youku and from Qiyi, Baidu’s online video venture, the analyst said.

Tudou had an 18.1% share of the revenue in China’s online video market in the fourth quarter last year, down from 18.5% in the third quarter, according to Beijing research firm Analysys International. Tudou’s market share rose to 23.7% from 22.5%, according to Analysys.

– Owen Fletcher. Follow him on Twitter @owenfletcher