Alibaba & China’s Internet Scale

Jan Dawson of Jackdaw Research writes on Techpinions about China’s internet scale and its e-commerce sector (paywall):

There is perhaps no better illustration of the massive scale of the Chinese internet market than its e-commerce sector. Within that sector, no company better exemplifies that scale than Alibaba. Though it’s often compared to Amazon, it’s probably better compared to eBay. Or at least seen as a sort of hybrid of eBay and Amazon, since it’s more of a marketplace than a direct e-commerce player like Amazon. The chart below shows gross merchandise volume for Alibaba and eBay, which both treat this as a key measure, along with total product sales for Amazon, which is an imperfect proxy but the closest thing we have as a comparable measure of scale:

Alibaba, Amazon & ebay

Alibaba’s “Singles Day”, its yearly deals event on the eleventh of November, sat once again records, via Bloomberg:

Alibaba Group Holding Ltd. logged a record 91.2 billion yuan ($14.3 billion) in sales on Singles’ Day, turning a sweethearts’ holiday dreamed up two decades ago into a major online shopping event.

With mobile phones accounting for 69% of transactions during the event, it shows yet again that in China the mobile internet is the internet. It also shows that if push comes to shove most people can and will complete transactions entirely on smartphones.

So, no surprise here, the Chinese market in general, and Alibaba specifically, are huge. How Alibaba can successfully go international though is still an open question, over one year after its IPO. Alibaba has the size and the money that comes with its size to go truly global.

Alibaba just has to prove that money is smart money.


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