Alibaba on way to being top retailer

E-commerce giant forecasts 6 trillion yuan in sales by 2020, nearly double its sales for the latest budget year, its CEO says

Chinese e-commerce giant Alibaba Group Holding Ltd is expected to soon surpass Wal-Mart as the world's largest retail company, with total sales in the current budget year exceeding 3 trillion yuan ($462 billion; 412.4 billion euros), the company said on March 21.

Alibaba's budget year started on April 1 and ends on March 31.

Wal-Mart Stores Inc posted net sales of $478.6 billion for its budget year ending Jan 31.

The latest sales figure for Alibaba is equivalent to Sichuan province's gross domestic product last year, when the province's GDP ranked sixth on the Chinese mainland.

Zhang Yong, the company's CEO, said in Hangzhou that the figure was recorded on the company's business-to-customer site Tmall, consumer-to-consumer sites Taobao and Rural Taobao, and group-buying site Juhuasuan as of 2:58 pm on March 21.

Zhang said he expects the company will achieve annual sales of 6 trillion yuan by 2020, and that "in 2024, we want to be a business platform serving 2 billion consumers and tens of millions of enterprises at home and abroad".

The company will strive to spur its development by combining cloud computing and big data technologies with the Internet and the Internet of Things, as well as consumer terminal equipment, according to Zhang,

The Internet of Things is the network of physical object - devices, vehicles, buildings and other items - embedded with electronics, software, sensors and network connectivity that enables these objects to collect and exchange data.

Of Alibaba's 3 trillion yuan in total sales, about 660 billion to 1.17 trillion yuan was newly increased spending, says Gao Hongbing, director of AliResearch, who cited the National Bureau of Statistics and McKinsey & Co figures.

"Online shopping has been an important engine to promote consumption, which meets the nation's strategy of promoting domestic demand," Gao says.

Last year, Chinese consumers' willingness to spend reached the highest level since 2012, despite the economic slowdown, according to a study published in February by The Nielsen Co.

"This is a result of China's commitment to shifting from an investment-driven to a consumption-driven economy," says Kiki Fan, managing director of Nielsen China.

"Booming online shopping provides more variety and convenience to customers, thus fueling their spending desire."

Despite its economic growth falling below 7 percent for the first time since 2009, China surpassed the United States last year to become the largest e-commerce market in the world, according to statistics from multinational consultancy Forrester Research Inc.

Contact the writers through mengjing@chinadaily.com.cn

(China Daily European Weekly 03/25/2016 page14)