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Alibaba to Invest 16 Billion USD in China

Date:21-10-2013

Alibaba group, which is China’s largest ecommerce company plans to invest 16 billion USD over the next seven years. Experts believe that this move will revolutionize China’s retail industry. The investment will provide logistical and support services to the ecommerce industry, bringing in millions of new customers to the ecommerce platform.

According to Alibaba group’s CEO Jonathan Lu, the ecommerce giant expects to triple the volume of transactions on its site by 490 billion by 2016. This will overtake Wal-Mart stores as the world’s largest retail network. Alibaba, which was founded in 1999 has grown rapidly in the last decade and has emerged as the leading ecommerce platform in China. It has successful warded off foreign rivals and it now dominates over the ecommerce market.

Alibaba group includes business-to-business online marketplaces, retail payment platforms, shopping search engine and cloud computing services. It is interesting to note that Alibaba does not sell its own inhouse products; instead independent merchants can sell their products on their website. Thus millions of merchants can use Alibaba as a platform to sell their products.

The retail market in China is booming with rise in urban population and disposable income. This year, China surpassed the US as the world’s largest e-commerce retail market. China has over 564 million internet users, out of which 242 million are internet shoppers. Online retailing has exploded in China in recent years and e-commerce sales makes up to 6% of total purchases. The Chinese e-commerce market is dominated by local e-commerce companies such as Taobao, M18, Vancl and JingDong.

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