Alibaba set to surpass Amazon, eBay in sales

China-based global e-commerce giant Alibaba is set to surge past the US behemoths Amazon and eBay in turnover this year.

The gross merchandise value (GMV) of Taobao.com, Alibaba’s transaction-based website, was last year similar to the combined GMV of eBay and Amazon.

“This year we are expecting  to surpass those numbers,” Zeng Ming, chief strategy officer at Alibaba said at the annual conference of the company, AliFest 2012.

He said Taobao’s growth has been more than doubling from its inception in 2003 and the company is targeting renminbi 1 trillion ($158 billion) by the year-end (No figures available for 2003-2006. In 2006, the GMV was renminbi 16.9 billion, and numbers have been growing at 100% annually since then.)

“In the next 5-7 years, we expect this figure to go up to renminbi 3 trillion. We have 800 million product listings, 500 million registered users and 60 million daily visitors at Taobao.com, we expect this figure to reach 10 billion visitors by the year-end.”

Out of its seven business groups, Alibaba gets more than half of its business from Taobao.com.

Alibaba’s growth story has been phenomenal. From its humble beginnings in the home of founder Jack Ma in 1999, Alibaba.com now has 29.4 million registered users from 240 countries, with 2.5 million supplier storefronts.

Ming said the Alibaba group makes up 5% of the gross retailing market in China, in comparison to Wal-Mart’s 8% share of the gross retailing market in the US.

However, competition from other e-commerce websites – especially those heavily into mobile e-commerce (m-commerce) and customer-driven, built-to-order websites – is a major challenge.

Alibaba is responding by tweaking its business model from B2C (business to customer) to C2B (customer to business) and going in for mass customisation to cater specifically to user needs.

The company has also been building its mobile platform for the past two years, and hopes to be as strong in this space as Google’s Android platform, Ming said.

It plans to increase back-end support to local entrepreneurs looking to start their own e-commerce websites, as it still believes China has great growth potential.

“While logistics is still a major problem in China, we will be concentrating on increasing growth of e-commerce here for the next three years,” he said.

This is not to say that focus on global business has changed.

In fact, Alibaba also started its cloud computing platform three years ago, which provides a full range of cloud services.

Looking at the slow, but steady growth of cloud computing, the company is expects this business to turn profitable in the next 10 years.

“Alibaba is leading the data revolution in China, and our objective is to make cloud computing cheaply and easily accessible to everyone globally,” he said. By 2019, Alibaba is looking at serving 10 million small businesses. It also expects to generate 100 million job opportunities and add 1 billion consumers.