Some e-retailers on Taobao are upset that Alibaba has been paying more attention to Tmall, which helped the company sell 35 billion yuan worth of goods in 24 hours on Nov 11 last year, the annual key online shopping day in China.

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"For example, we all like to be involved in group-buying events because such events can usually help retailers sell a lot of products within a relatively short period of time. But you need to pay 60,000 yuan to be involved in those events no matter whether you can make money out of it or not," said He Yijia, a Sichuan province-based retailer who has been selling shoes on Taobao since 2010.

He, a young mother, said the threshold is too high. "It is an unwritten rule that only big boys on Tmall can do group-buying events," she said.

According to He, the profit margin of group-buying events is usually low.

"If I make 5 yuan of profit for each pair of the shoes, I need to sell a total of 12,000 to break even. You can imagine how hard that can be," she said, adding she opened up a shop on Mogujie.com late last year to avoid putting all her eggs in one basket

Apart from its sister platform Tmall, Taobao is also facing competition from other emerging B2C sites. Alibaba's rival Tencent Holdings Ltd is leading the revolt by connecting its popular messaging app WeChat with JD, China's No 2 e-commerce player.

Despite all the challenges, Willis of Forrester said that selling on Taobao still has big advantages for small businesses, especially the large volume of traffic.

He Yijia, who has already set up a store on other site, said she will not shut her store on Taobao.

"I put all my people to work for my new store in Mogujie on Nov 11. Despite the fact that no one took care of my Taobao store on that day, more than 1,000 pair of shoes were still ordered by customers over a 24-hour period. No website can compete with this kind of traffic at the moment," she said.

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