Economic scholar: The predicament and ambition of China's electric business

China's E-commerce market is promising, but in the face of intense price competition, almost all firms ' margins are squeezed: the latest issue of the print edition of the British economist says that while China's e-commerce market is promising, it faces intense price competition, with almost every company's profit margins squeezed. But in this context, Alibaba has a unique platform model for a solo show. Not only that, the company also wants to make e-commerce the core of the entire Chinese economy. The following is the full text of the article: Crazy promotion "This is one of the few bright spots in China's economy." "Zeng said. He means electronic commerce. The chief strategist of Alibaba, China's internet giant, has predicted that the value of Alibaba's platform will break 1 trillion yuan (about $159 billion trillion) this year-more than Amazon and ebay combined. This prediction is bold, but given the "Singles Day" performance, I am afraid it is not difficult to understand where his confidence originated. "Singles Day" began a few years ago in the campus popular, and then the sharp business to create a shopping spree. The festival, designed to soothe singles, is scheduled for November 11 every year, because there are four 1. It's kind of like "Bachelor" Valentine's Day. On this day, single men and women give gifts, jewellery and sweets to each other. November 11, Alibaba online platform turnover reached 19 billion yuan, almost four times times the same period last year. Even with America's "Web Monday" (the first Monday of Thanksgiving, US internet retailers will do a big promotion on this day), they are still more than one. November 11, China's online purchase orders more than 100 million copies of the day, about 80% of the volume of courier parcels. The couriers were crushed by the mass of parcels. Profit is under pressure so it seems that the days of Chinese electric business enterprises are not very nourishing? This is not the case. Digital marketers are really growing, and network sales are soaring. Consumers favor lower prices, better services and a more diversified choice of goods. But Elinor Leung, an analyst at CLSA in France, Nor Liang that the problem is that Chinese e-commerce companies have higher profit pressures than the US. "Almost no one makes money. "she said. Internet retailers and entity retailers are waging an unprecedented price war. Dangdang, Jingdong Mall are in crazy price. Tencent, in deep pockets, is also trying to grab market share. Jingdong Mall also through just won 400 million dollar financing increased the strength of the price. But it is not clear how long the company's money will burn. This trend is intensifying as the physical retailer's counterattack. Wal-Mart has increased its stake in store No. 1th. ' When the year is good, Wal-Mart can open forty or fifty physical stores a year, but it is insignificant in the face of the huge demand in the Chinese market, ' said Walters, an analyst at Boston Consulting. That is why E-commerce is so important. "Many Western rivals have suffered setbacks in the process of introducing warehousing models to China, and Best Buy and Home Depot are the latest examples," he said.。 As China's largest two home appliance stores, Suning and Gome have recently expanded the online Mall of the commodity category. Alan Lau, the McKinsey analyst, said they were also pressuring manufacturers to stop offering such a big discount to Alain Lau. He reckons that computers and mobile phones sold online in 2011 are 12% cheaper than physical stores, compared with just 7% this year. As the gap grows smaller, almost all firms ' margins are squeezed. One of the most notable exceptions is Alibaba, which accounts for nearly three-fourths of China's E-commerce market. Since Taobao (Consumer-to-consumer) and the cat platform are only responsible for matchmaking and trading, there is no need to invest in logistics or inventory costs. None of the products sold on these platforms are produced by Alibaba itself. (U.S. officials have classified Alibaba as a "notorious" counterfeit goods market, but Alibaba sees it as unfair.) The company mainly generates revenue through advertising, not fees paid by users. The reason why this model can be used, mainly thanks to Alibaba's dominance. Alibaba is still a private company and will not disclose financial data, but Yahoo owns a stake in the company. According to data disclosed by the US internet company, Alibaba's revenues nearly doubled Year-on-year, reaching $2.9 billion in the three quarter ending June, while profits rose twice-fold to $730 million. Alibaba is very optimistic about its own prospects. E-commerce has accounted for 5% of the Chinese retail market, almost the same as the US. But Alibaba says China has greater potential. In the United States, physical retailers are already highly efficient and ubiquitous. In China, the physical retail market is highly differentiated and inefficient, and is rarely involved outside the big cities. Therefore, E-commerce can be achieved beyond. Zeng points out that many Chinese have not been on the Internet. When these people become netizens, Alibaba will focus on, record and analyze their shopping habits. The company is designing a "big data" strategy. Hope to help enterprises to collect user data as soon as possible, and share their own analysis. This will help them speed up the product design cycle. Alibaba's ambition is to help China enter the era of "Mass on-demand production" and "user-independent innovation"-turning these slogans into reality. "The entire supply chain will be integrated into E-commerce. "It will be more than just a tool, it will be the core of the economy as a whole," Zeng insists. "(Ding Macro)