E-commerce giants optimistic about Chinese market

CRI, September 14, 2012

Internet development in China has witnessed remarkable progress since the mainland established its first internet connection 25 years ago. That the increase in e-commerce sales in recent years has enabled people to live more easily is an evident fact. This growing trend has also attracted both domestic and foreign industry giants to not only compete but also prosper in China's huge e-commerce market.

Xu Ji, Product Engineer Director of Alipay, talks to a reporter during a break in a senior management meeting at the 11th China Internet Conference in Beijing on Wednesday, September 12, 2012. [Photo/CRI]

Quan Yunfeng, an employee at a sci-tech company in Hangzhou in east China, calls himself one of the earliest online shoppers of clothes and electronic products on Taobao.com in 2003,the year when Alibaba Group founded the e-commerce platform in Hangzhou.

Quan said convenience is a major advantage in online shopping. But why has Taobao become so popular in the country? As a loyal customer, Quan Yunfeng cites one particular reason for its success.

"Taobao attracts both businesses and customers by providing them with free online service. Eachnet.com, which offered a similar service before Taobao came along, charged users for its service. But in fact, free service is a preference of Chinese people."

China's largest e-commerce firm Alibaba Group said earlier [this year?] that it expected to sell merchandise worth more than that sold by America's top online retailer Amazon Inc. and the online auction site e-Bay combined in 2012.

Although "Taobao.com," which has been nicknamed the Chinese "Amazon.com," announced its goal, Xu Ji, product engineer director at Alipay, an affiliate of Alibaba Group, says he does not see the company and Amazon as competitors.

"I think e-commerce in China is a trend, like history that can't move backwards[?can't repeat itself?]. Taobao and Amazon should not be considered competitors as the boom in e-commerce has come from contributions made by each party involved."

Xu Ji adds that the two e-commerce giants should learn from each other's success.

"There is a lot that Taobao and Amazon can learn from each other. From my personal perspective, I admire Amazon's development as it rapidly develops its cloud computing at the forefront of the e-commerce industry.

Through this new platform, it can offer both businesses and customers cloud computing and cloud storage services."

A new online retail forecast for the Asia-Pacific region issued by Cambridge-based Forrester Research Inc. predicts that e-commerce sales in China will grow more than 20 percent annually and reach 356.1 billion U.S. dollars in 2016.

In light of the huge market potential, Amazon first knocked on China's door in 2004 when it acquired joyo.com for 75 million U.S. dollars. Over the past eight years, Wang Hanhua, President of Amazon China, says the company has realized many innovations that have targeted Chinese customers' needs. Distribution and delivery services are one of these innovative attempts.

"China is the only country that has Amazon's distribution and delivery service. We also ensure that 70 percent of our Chinese customers receive their ordered goods the same or next day after they submit an order. So the level of our service has already surpassed that of Amazon in the U.S."

Wang says discovering that Chinese consumers care more about when they will receive their merchandise rather than the time of the delivery[?] has paved the way for Amazon to make other innovations in China.

"On all the Amazon web pages, we clearly show customers that if they order any product within two hours and some minutes, we will be able to ensure a deadline by which they can get their ordered products, rather than telling them the time we will deliver them."

Meanwhile, the e-commerce giants also believe that China's current explosive growth in mobile internet shopping will generate new opportunities in this leading e-commerce market in the Asia-Pacific in the coming years.