Like market size, the cost of the workforce and other potential factors are more favoring to the industrialist to develop to business in China. However, there are some challenges too that industry developers have to face before starting the business in the market of China. Foreign players have to tackle with cost reduction and local competitors. these are huge challenges for any foreign player. PEST analysis of China’ market will aid the reader to understand about its strengths and weakness in the aspect of political, economic, social and technological factors, these factors are external factors which aids to analyze e-commerce industry. In other hand SWOT analysis give a brief introduction of Taobao, is e-commerce company in China, so the readers will able to know about the internal’s strengths, weakness, opportunity, and threats of the company. Political variables incorporate government regulations and lawful issues and characterize both formal and casual leads under which firm must work. Furthermore, it is asserted that the political energy is presumably the most turbulent constrain in natures domain (Fahey amp. Narayanan, 1986). In the previous one decade, the Chinese government appends extraordinary imperativeness and center to the advancement of e-trade in the most crowded nation, for instance, on issuing the Summaries of the Middle/Long Term Science and Technology Development Plans of China and the Development of Information Industry Plans in the Eleventh Five-year and Long Plan in 2020 Years in The Ministry of Information Industry, the provision of e-business stage innovation has been recorded as a key point (Lili, 2011). In terms of the lawful framework, the Chinese legitimate skeleton for e-trade is still in its incipient stage and has officially accomplished a few issues. China has restricted experience with drafting e-trade enactment for issues, for example, transnational security, protected innovation rights assurance, and expense.