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Thursday, 22 August 2013

China - Case Study II

China's E-Commerce Market

Following on from the Chinese Case Study I post, these notes explain how China is moving in a positive direction to achieve three of its future growth targets (increase innovation, increase the global presence of Chinese companies and increase growth coming from domestic consumption).

By 2020 China’s e-commerce market is forecast to be bigger than the existing markets in America, Britain, Japan, Germany and France combined (from The Economist)

Alibaba

Innovation:
  • Alibaba is a business to business e-commerce company that sells Chinese goods to overseas suppliers.
  • The company understands the spending habits of Chinese consumers
  • Alifinance is microlender to small firms (planning on expanding to normal customers too)
  • Insurance

Increase the global presence of Chinese companies: Alibaba is looking to become public (i.e. be listed on a stock exchange), and looking to expand to other emerging economies.

Domestic consumption: ‘Bamboo Capitalism’ is the term used to describe the efficiency of private firms opposed to Chinese state-owned enterprises. Growth in private sector firms drives domestic consumption.

Bottom line: E-commerce is driving future growth in China.

Challenges



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