For those of you who did not read my June 17th post and still don’t know Taobao.com it is China’s version of eBay and commands 81.5% market share of China’s online retail market with over US$14 billion in gross merchandise value expected this year.

Alibaba Group, which initially developed Taobao.com with Softbank, owns 100% of the business and it seems they are upping the anty with the recent announcement of a US$300 million investment over the next 5 years in hopes of making Taobao.com one of the largest retailers (online or offline) in the world. Chairman Jack Ma (Ma Yun) is so bullish on Taobao.com that he believes it will eventually be bigger than Wal-Mart!

In the next few years, China’s Internet users will reach 500-600 million, and by then about 100-200 million people will be shopping on Taobao every day. Show me a company with such scale?

Many, including me, believe that Taobao.com will be the next big IPO and you’ll have to get in line for this one given the success of the Alibaba.com (1688) listing late last year (the stock has taken a beating since then, I should point out).

How will this money be spent? There are many ways but this is how TradeMediaBlog sees Taobao.com’s evolution over the next few years – or at least what Alibaba Group may wish to consider.

1. Alipay integration with Alibaba.cn – Alipay is 100% owned by Alibaba Group and is far and away the most dominant online payment gateway in China with nearly 58% marketshare. Alibaba.cn is China’s largest domestic B2B trade site that could facilitate trade transactions within China using Alipay’s escrow payment model.

2. Taobao.com integration with Alibaba.cn – Taobao.com sellers need to find product and what better place than through Alibaba.cn and what better way to facilitate payment than through Alipay.

3. Taobao.com introduced in English and given away FREE worldwide – If eBay thinks they had it tough in China after investing US$180 million cash only to lose out to Taobao.com in the end just wait til they start penetrating the U.S. market! Meg Whitman left at a good time because Jack Ma could come with deep pockets, aggressive marketing and an army of Mainland Chinese programmers behind him. I do believe the many disgruntled eBay sellers would flock to this FREE platform and be happy about it!

4. Alipay integration with Alibaba.com – Alipay begins experimenting with overseas payments. Of course there are many issues and hurdles but it is possible given both the buyer and seller agree to use Alipay’s escrow service and partner banks.

5. Taobao.com integration with Alibaba.com – Taobao.com not only begins carving out marketshare from eBay on their home turf but also beats them at a business that they have always struggled to understand – sourcing. Like Taobao.com’s integration with Alibaba.cn, this last link in the chain creates a global sourcing opportunity for Taobao.com’s sellers and will definitely be another draw for online sellers around the world.

Integration is easier said than done; however, we strongly believe that it is not a question of how but when.