
Alibaba Group, a leading Business to Business (B2B) e-commerce company in China, planned to invest another 2 billion-yuan ($307 million) in its sub-company -- Taobao.com, an online shopping market place for consumers in China, according to Alibaba Board Chairman Ma Yun.
The aim is to outstrip the world largest retailer Wal-Mart in 10 years, said Ma in early July at the fifth anniversary celebration of Taobao. Its short-term target is to surpass eBay, the world's online market platform, and Amazon, one of the earliest U.S. based worldwide e-commerce websites.
The investment is to be put mainly in the company's technology, renovation, personnel introduction and the establishment of e-commerce chains, so as to forge Taobao into a gigantic mature e-commerce business.
When the 1.45-billion-yuan ($211 million) Taobao.com was set up in 2003, many business people expressed doubts on its business model. However, through the development of the past five years, Taobao has become China's largest on-line shopping platform that even beat eBay in the Chinese market, with its share of the country's on-line shopping market exceeding 80 percent. Statistics from many market survey institutions showed that Taobao has become the largest online retailer in Asia.
Earlier this year Taobao set as its target a trade volume of 100 billion yuan ($15 billion) in 2008, so as to take the lead in China.
Ma said that the entire 2 billion yuan should be spent on the online business across five years, and vowed to build Taobao into the world largest e-commerce business.
Ma continued:. "In this century, IT is to serve individual consumers, and it will become a trend to serve people according to their needs."
Ma believes that the number of on-line clients in the next few years will grow continuously. "Internet users in China are expected to hit 400-600 million, with some 100-200 million clients willing to go shopping on the net, thus creating the largest shopping scale beyond any store in the world."
However, Ma's confidence caused some suspicions around the e-commerce business sector, since the trade volume of Wal-Mart topped 3,500 billion yuan ($510 billion) in 2007, compared with only 43.3 billion yuan ($16.3 billion) by Taobao, amounting to a large disparity between them.
Nonetheless, in Ma's opinion, the great difference in development speed will shorten the trade volume disparity in the few years ahead, because it only took Taobao a little bit over four years to create 43.3 billion yuan of trade volume, yet it took Wal-Mart 29 years to establish its current business model. In addition, the annual growth rate of Taobao is to reach 100 percent, while the figure is less than 10 percent for the latter.
(Source: China Business News) |