The battle for China's e-commerce supremacy
- By David Carle
An Internet population of 150 millions users and counting. E-commerce sales skyrocketing by %158 to a lump sum of $68 billions. Add to the mix an entrepreneurial nation and you have the recipe for a hot, mouthwatering market for the small business owner.
China is a country on steroids. It is predicted to become the number one consumer economy in the upcoming years, while foreign investments average $420 millions a day. What was once a mainly poor and uneducated population has now begun the emperor's drive toward modernism and prosperity. China is now widely seen as the international powerhouse in retailing and wholesaling.
Of course, the charge has been mirrored to the Internet, revolutionizing the way we look at e-commerce.
Chinese's entrepreneurs use the web as a connector to strike deals with international suppliers and online tools are popping up everywhere, providing businesses of all sizes with the possibility of exploring broader markets.
The following article will provide insights on tapping in this rising market. Today's spotlight features the biggest two online marketplaces in China, and how your small business can profit from this battle for China e-commerce's supremacy.
"Open, Sesame"
In the famous adventurous tale, Ali Baba plays the role of a poor woodcutter, who happens to overhear a band of thieves reveal the existence of a secret cave full of treasures. The cave opens only through shouting the magical command of "open, sesame".
In a modernized version of this ancient story, Chinese businessman Jack Ma unlock the door to online riches - by creating a virtual community where manufacturers and consumers from China and around the globe can connect without the use of an intermediary.
This marketplace of 2.3 millions users is named Alibaba (http://www.alibaba.com), where a business transaction is concluded at every minute.
Every imaginable product is exchanged on Alibaba, and any small business can register to build his online catalog. It doesn't matter which industry your small business is competing in; you have good chances of finding a qualified lead on Alibaba.
Meet Pete Patel. This entrepreneur from Tennessee created a profile on Alibaba, and started advertising his store. The results are impressive: Over the last three months, his small business averaged 45 leads a week, and cemented 35 business relationships.
The astonishing part is that most of his contacts are overseas; something his business couldn't afford to develop in the past.
The eBay counterattack
Of course, Alibaba is not the only Internet Company eyeing the gold mine.
Ebay, who has been experiencing difficulties breaking in the Asian market, decided to cut corners short and bought an already well-positioned e-commerce company. Eachnet, one of the most popular websites in China, was thus bought by the US giant.
Slowly but surely, EBay has been successfully improving its image in China by dealing with its issues one by one. At first, Ebay's online payment system paypal met distrust from the Asian Internet population.
The auction giant responded by associating with China pay, a trusted online payment system in China that now service Eachnet. They also removed Eachnet's transactions fees, and the result have been encouraging since then: The marketplace now holds nearly 4 millions users in China, nearly as double as Alibaba .
Just as Ebay in the USA, Eachnet now offers a myriad of possibilities for small businesses owner looking to buy directly from Chinese retailers.
Until a few years ago, eBay/EachNet was the dominant auction player in China - but as of this year, Alibaba soared past them taking 57.74% of the market and leaving EachNet with roughly 35%. Even if this statistic looks alarming to eBay shareholders, one must remember that Microsoft doesn't like to lose, and we will probably see massive investment in the future.
Final thoughts
Just yesterday, creating business contacts in China was something small businesses could only dream about as limited budgets and poorly developed transportation networks handcuffed even the strongest ambitions.
Alibaba and Ebay's Eachet are now giving your small business an equal chance of tapping in the Chinese and international markets, giving a boost to your small business to remain competitive in its industry.