Wu Guangqiang

    jw368@163.com

    ALIBABA, one of the largest Chinese e-commerce giants, announced Dec. 3 that by the end of November, it had recorded annual sales volumes of 1 trillion yuan. That’s US$157 billion in gross merchandise volume, which easily surpasses U.S e-commerce giants Amazon and eBay combined. Alibaba is a conglomerate primarily composed of Tmall, which manages e-commerce operations for millions of companies in China, and Taobao Marketplace, a rough equivalent of eBay.

    According to Jack Ma, Alibaba chairman, only two companies have ever recorded annual transaction volumes at this level: Walmart and Alibaba. Ma has been dubbed by some netizens as “Governor Ma,” because the transaction volume of 1 trillion yuan is about the equivalent of the annual GDP of Shaanxi Province in 2011. If Alibaba were a province in terms of retail sales of consumer goods, 1 trillion yuan would place it as the fifth-largest in the country, after Guangdong, Shandong, Jiangsu and Zhejiang. Of course, it is irrelevant to compare sales volume with GDP. Alibaba doesn’t sell things; it just provides a platform for sellers and buyers. What is great about Alibaba and other e-commerce operators is how its business model is revolutionizing forms of consumption and doing business.

    It made headlines around the world when 30 billion yuan worth of goods were sold online nationwide on Nov. 11, Singles’ Day — made up by Chinese young people. The combined sales volume of Tmall and Taobao reached 19.1 billion yuan. The volume was not only 10 times last year’s figure, but also outshone America’s daily online sales record.

    According to the latest report released by the British Euromonitor, in terms of revenues, Tmall will overtake Amazon by 2017 as the world’s largest e-business website. The report estimates that Tmall will see annual revenues of US$120 billion in 2017 while Amazon will rake in US$100 billion.

    But any bold prediction may prove to be too conservative. Forrester, an independent technology and market research company, had predicted that U.S. and EU online sales revenue would grow at an annual rate of 10 percent from 2009 to 2015. Last year, Chinese online sales saw a 40-percent increase.

    Merrill Lynch made a more “aggressive” prediction, saying global online sales would hit US$1 trillion by the end of 2013. Yet almost certainly, China’s online sales will climb up to this level this year. Last year, China saw total revenues of 5.8 trillion yuan made by all e-commerce companies.

    As Jack Ma put it, “One trillion yuan is just the beginning. We are entering an age in which we can expect to generate 10 trillion yuan a year.” According to Zeng Ming, Alibaba’s CSO, their ambitious projection is based on sound analysis of future business trends and market research.

    The following factors have helped create this phenomenon: the speedy advancement of the Chinese economy and social development, the integration and application of such new technologies as the Internet, cloud computing, Internet of things, data integration and mobile terminal technology.

    China enjoys numerous advantages that will further boost the growth of e-commerce: the largest population of Internet users and mobile subscribers and the largest consumer army with fast growing purchasing power. But it was mainly with their painstaking efforts that Chinese e-commerce companies have accomplished the epic. In the past decade, they have overcome three barriers: method of online payment, logistics and credit.

    To achieve higher objectives, Chinese e-commerce companies still have three barriers to conquer: institutional improvement, transaction process optimization and discipline in trade.

    As Jack Ma sees it, the Internet-based e-business is not a “virtual economy,” but a real economy. By combining IT with conventional real economy, it integrates resources and substantially reduces costs, hence promoting the competitiveness of small businesses and enhancing overall economic efficiency.

    The future of Chinese e-business goes hand in hand with the future of China.

    (The author is an English tutor and a freelance writer.)