The Chinese e-commerce market is the largest market in the world and by 2020 it is estimated to be larger than the markets of the U.S., the UK, Japan, Germany and France combined. Long underestimated, it has now become clear that there is absolutely no getting around the Chinese market and it’s 1.3 billion potential customers. The rapidly increasing number of internet users and online shoppers in the People’s Republic as well as the massive potential of this growing economy make the Chinese market more interesting to companies world wide than ever.

One reasons for this immense growths is the increased internet access: Towards the end of 2015, over 688 million Chinese were online. Studies suggest that the mobile internet market is far more important to the Chinese customer than internet access from a computer: The adoption of smart phones is rising and in order to succeed in Chinas online market, a mobile page is absolutely essential.

“Singles’ Day”

The 11th of November, Chinas „Singles’ Day“, the countries biggest online shopping sale of the year is held with numberous discounts and shopping opportunities, could probably be described as the Chinese equivalent of the „Cyber Monday“ in the US. Sales figures show, however, that despite the much longer tradition of online shopping in the US, the revenue of the Chinese online retailer exceed the American ones by far: In 2014, Alibaba recorded $9.3bn sales on the „Singles’ Day“, while ‘only’ $2.04bn were recorded on „Cyber Monday“ in the US.  In 2015, approximately 120,000 orders were place to Alibaba every Minute and it took only 12 hours to reach the $9.3bn record from the previous year.

Overall, China’s online retail transaction reached $622.5bn in 2015, an increase of 33.3% compared to the previous year. For a large share of this growths, the two biggest companies are accountable: The Alibaba Group and JD (formerly 360buy.com). The Alibaba Group comprises a variety of services via web-portals including consumer-to-consumer, business-to-consumer as well as business-to-business sales. Alibaba was founded in 1999 by Jack Ma, a former English teacher who saw the potential of the opportunities, the internet could offer small businesses. Nowadays, the Alibaba Group operates multiple businesses including Taobao, Tmall, Juhuasuan, Aliexpress and Alimama, only to name a few.

The Alibaba Group

At first sight, Alibaba seems to be a viable competitor for its US rival, Amazon. While Alibaba reported a profit of $5.5 billion in the fiscal year 2014, Amazon reported a loss of $241 million the same year. Furthermore, Alibabas revenues seem to be a lot more varied and therefore better protected from macro-economic swings. There are, however, also a couple of thorns in the side of the e-commerce giant Alibaba: first of all, experts are concerned that Alibaba is too exposed to the slowdown of the Chinese economy. Additionally, reports about Alibabas’ business practices and its lack of assertiveness concerning counterfeit products harmed the companies reputation and sales figures. Nevertheless, Alibabas growing influence on the online shopping world is undeniable and its’ popularity is expanding across China’s borders.

Even despite the fact that even the seemingly endless growths of the Chinese market is said to slow down further in the near future, the Chinese e-commerce is nonetheless a thriving and dynamic market that no business can afford to dismis. Especially considering the over 730 million Chinese people who do not have access to the world wide web yet, there is definetly still a lot of potential for change and development in China’s e-commerce sector.