ahojunk
RETIRED INTL MOD
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Alibaba is leveling the playing field for those in rural areas and generating employment. Good job!
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Online titan not just about e-commerce anymore
WATARU KODAKA, Nikkei staff writer
December 21, 2015 7:00 am JST
Wang Qin, manager of a Taobao Village shop in Zhejiang Province, purchases goods online for elderly residents. The picture was taken in October.
SHANGHAI -- Alibaba Group Holding is branching out into the real world, opening shops in villages and pushing its online payment service in urban areas.
These are the two prongs of the Chinese e-commerce giant's strategy to expand its "online economic zone."
In a Zhejiang Province mountain village of 2,000 people, many of whom are elderly, there is a shop with a signboard that reads "Taobao Village." The store is part of Alibaba's new "1,000 counties and 10,000 villages program."
Wang Qin, 28, manages the shop. Villagers go there to get their daily necessities. Farmers go for seeds and other agricultural products. Wang keeps the store stocked by buying stuff via Taobao, earning a 1% commission.
Taobao is an Alibaba-operated e-tailer. The plan is to open Taobao Village shops in thousands of rural communities across China, where more than 600 million potential new customers live.
Moving into the real world
Zhejiang-based Alibaba is also venturing into the urban jungle with an aggressive marketing campaign for Alipay, which allows shoppers to pay for purchases via their smartphones. The service essentially does the job credit cards and cash already do.
Smartphone users can also use Alibaba chat, social network and other apps to discover popular restaurants and other businesses. Then they can choose to pay for their purchases with Alipay. For participating restaurants and other merchants, the online payment platform could help them bring in new customers.
With these new rural and urban advances, Alibaba is planting itself more firmly in China's brick-and-mortar economy, where more than $4 trillion worth of transactions take place every year -- worth nearly 10 times more than those made in China's online economy.
Alibaba well knows the online marketplace. In fact, Singles Day -- an online shopping extravaganza every Nov. 11 -- was an Alibaba brainchild. This past November, Singles Day sales reached 91.2 billion yuan ($14.07 billion), up 60% from the same day in 2014.
Singles Day is not a mere sales promotion campaign. It is designed to showcase the use of big data, cloud computing and mobile innovations, according to Daniel Zhang, Alibaba's chief executive.
The 91.2 billion yuan total was about 14 times more than what Alibaba brings in on an average day and required Alipay to process as many as 85,900 transactions per second during peak hours.
In a way, Singles Day has been an experiment to help Alibaba learn to cope with the large numbers of transactions it expects to be placed at any instant now that it is expanding its footprint into villages and pushing Alipay hard in cities.
Linking 1.3 billion wallets
Alibaba was launched in an apartment in Hangzhou, Zhejiang, in 1999. Starting with Alibaba.com, a business-to-business e-commerce site, the company then began Taobao, a consumer-to-consumer platform, and TMall, a business-to-consumer e-tailer. It has also developed other e-commerce platforms in China. Nearly 400 million people now shop via Alibaba, spending $400 billion a year.
Alipay, launched in 2004, is Alibaba's biggest strength; it was devised when China had no online payment system.
The platform connects consumers' "wallets" via the Internet. A 31-year-old female company employee in Shanghai said she uses Alipay "almost every day" to buy things at convenience stores and even to pay her utility bills.
But there is a sense of crisis at Alibaba due to market saturation; just about everybody in cities, especially young people and middle-income consumers, already buy stuff online -- either from an Alibaba site or a rival platform.
Tencent Holdings, a leading social network provider, has invested in Jingdong Group, China's second biggest e-commerce player. Already, Jingdong's market presence is growing -- and it has rolled out its own online payment system.
With a client base of 400 million WeChat users -- WeChat is China's biggest chat and voice over Internet Protocol app -- Tencent is a threat to Alibaba.
In China, just because a company enjoys a competitive advantage today doesn't mean it will be a winner tomorrow. Aware of this dynamic, founder Jack Ma is keeping Alibaba in the rapid growth stage.
:
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Online titan not just about e-commerce anymore
WATARU KODAKA, Nikkei staff writer
December 21, 2015 7:00 am JST
Wang Qin, manager of a Taobao Village shop in Zhejiang Province, purchases goods online for elderly residents. The picture was taken in October.
SHANGHAI -- Alibaba Group Holding is branching out into the real world, opening shops in villages and pushing its online payment service in urban areas.
These are the two prongs of the Chinese e-commerce giant's strategy to expand its "online economic zone."
In a Zhejiang Province mountain village of 2,000 people, many of whom are elderly, there is a shop with a signboard that reads "Taobao Village." The store is part of Alibaba's new "1,000 counties and 10,000 villages program."
Wang Qin, 28, manages the shop. Villagers go there to get their daily necessities. Farmers go for seeds and other agricultural products. Wang keeps the store stocked by buying stuff via Taobao, earning a 1% commission.
Taobao is an Alibaba-operated e-tailer. The plan is to open Taobao Village shops in thousands of rural communities across China, where more than 600 million potential new customers live.
Moving into the real world
Zhejiang-based Alibaba is also venturing into the urban jungle with an aggressive marketing campaign for Alipay, which allows shoppers to pay for purchases via their smartphones. The service essentially does the job credit cards and cash already do.
Smartphone users can also use Alibaba chat, social network and other apps to discover popular restaurants and other businesses. Then they can choose to pay for their purchases with Alipay. For participating restaurants and other merchants, the online payment platform could help them bring in new customers.
With these new rural and urban advances, Alibaba is planting itself more firmly in China's brick-and-mortar economy, where more than $4 trillion worth of transactions take place every year -- worth nearly 10 times more than those made in China's online economy.
Alibaba well knows the online marketplace. In fact, Singles Day -- an online shopping extravaganza every Nov. 11 -- was an Alibaba brainchild. This past November, Singles Day sales reached 91.2 billion yuan ($14.07 billion), up 60% from the same day in 2014.
Singles Day is not a mere sales promotion campaign. It is designed to showcase the use of big data, cloud computing and mobile innovations, according to Daniel Zhang, Alibaba's chief executive.
The 91.2 billion yuan total was about 14 times more than what Alibaba brings in on an average day and required Alipay to process as many as 85,900 transactions per second during peak hours.
In a way, Singles Day has been an experiment to help Alibaba learn to cope with the large numbers of transactions it expects to be placed at any instant now that it is expanding its footprint into villages and pushing Alipay hard in cities.
Linking 1.3 billion wallets
Alibaba was launched in an apartment in Hangzhou, Zhejiang, in 1999. Starting with Alibaba.com, a business-to-business e-commerce site, the company then began Taobao, a consumer-to-consumer platform, and TMall, a business-to-consumer e-tailer. It has also developed other e-commerce platforms in China. Nearly 400 million people now shop via Alibaba, spending $400 billion a year.
Alipay, launched in 2004, is Alibaba's biggest strength; it was devised when China had no online payment system.
The platform connects consumers' "wallets" via the Internet. A 31-year-old female company employee in Shanghai said she uses Alipay "almost every day" to buy things at convenience stores and even to pay her utility bills.
But there is a sense of crisis at Alibaba due to market saturation; just about everybody in cities, especially young people and middle-income consumers, already buy stuff online -- either from an Alibaba site or a rival platform.
Tencent Holdings, a leading social network provider, has invested in Jingdong Group, China's second biggest e-commerce player. Already, Jingdong's market presence is growing -- and it has rolled out its own online payment system.
With a client base of 400 million WeChat users -- WeChat is China's biggest chat and voice over Internet Protocol app -- Tencent is a threat to Alibaba.
In China, just because a company enjoys a competitive advantage today doesn't mean it will be a winner tomorrow. Aware of this dynamic, founder Jack Ma is keeping Alibaba in the rapid growth stage.
: