QINGDAO, China, October 28, 2014 /PRNewswire/ — China’s economic rise coincides with the rise of the Internet. The fusion of two forces brought subversive influences to many industries. In the country where many industries are racing to expand rapidly, the growth of the Internet retail industry is particularly impressive. Since 2003, the compound annual growth rate of China’s Internet retail industry has reached 120 percent. A report by ehaier as follows:
According to the data by McKinsey Global Institute, China has become the second largest Internet retail market in the world since 2011, and with the rise of such factors such as demographic dividends, the market sales is predicted to reach 420 to 650 billion dollars by 2020, and total online sales in China will equal to the current total online sales of the U.S., Japan, Germany, U.K. and France.
In this huge Internet retail market, some leading platforms in the Internet retail industry like Taobao and Tmall dominate a large part of the market. Just as eBay, a similar website in the U.S., since a variety of middle and small-sized enterprises and micro enterprises entered these platform, these platforms rapidly attracted huge aggregation traffic due to the subversiveness of their operation patterns.
According to the findings, the sales of Alibaba on November 11, 2013 was up to RMB35 billion, far more than the overall market sales on “Cyber Monday,” the biggest online shopping festival in the U.S. Especially after Alibaba created the biggest American IPO when it was listed in the U.S., the operation pattern of Alibaba was more favored by investors and even imitated by E-commerce enterprises in Europe, the U.S. and India.
According to the prediction of a Chinese research institute, the sales of Alibaba on November 11, 2014, the first “November 11” event after Alibaba was listed in the U.S., will reach RMB60 billion. On the occasion, the festival, which Alibaba created, will bring big benefits to the company and become the undisputable “No.1 Online Shopping Festival in the World.”
According to expert analysis, the explosive growth of Chinese E-commerce enterprises is essentially the process of rapid networking of commodities, especially the “moving” of small and large commodities such as household appliances and furniture directly results in the rapid growth in online sales, and at present, the growth rate of online sales of large commodities in China is 10 percent above the growth rate of overall online sales.
Chinese E-commerce enterprises such as Alibaba can rapidly complete the transition from small to large commodities, mainly because of the rapid development of large cargo logistics in China. For E-commerce enterprises, the main competition is focused on online stores while the competition backstage is focused on logistics distribution. Unlike small commodities, large commodities cannot be delivered via ordinary express companies, so E-commerce enterprises have to depend on professional logistics distribution vehicles and personnel.
In the U.S., this transition mainly relies on global logistics giants such as UPS and FedEx. However, in China, such a large cargo logistics service network cannot be built in a day, especially a network covering vast rural areas. So far, RRS Logistics of Haier Group is the only large cargo logistics network that can cover both urban and rural areas of China.
Last December, after several tentative cooperation, Alibaba and Haier Group entered into a strategic partnership to develop new systems and standards for logistics distribution and an installation service of household appliances and large commodities. Jack Ma, chairman of the board of Alibaba Group, regarded this cooperation as the perfect combination of the biggest “virtual network” and the biggest “physical network.“
It’s learned that the enterprise appreciated by Jack Ma has nine forwarding bases and 90 logistics distribution centers nationwide and has a warehouse space of more than 2 million square meters. It has established logistics distribution stations and more than 17,000 service outlets in more than 2,800 counties nationwide, which form a nationwide service network integrating warehousing, logistics, distribution and installation of household appliances and large commodities.
The rapid development of Chinese E-commerce and logistics is changing the consumer’s shopping mode, consumption concept and standard of living. Mou Xiaohan, a white-collar worker from Suzhou, China, said that she just bought small commodities such as clothing and shoes online at the very beginning, but as the logistics service was becoming more complete, her consumption concept started to change. “All of my household appliances and furniture are bought online. It’s very convenient,” she said.
It’s predictable that China is likely to become an example of great-leap-forward development, catch up with and surpass western countries and become a more digital and efficient retail market with the constant integration of the biggest “virtual network” and “physical network.” Although China failed to catch the industrial revolution in the 19th century, nowadays, she has been adequately prepared for leading the wave of Internet development in some fields.