January 3, 2013, 3:21 PM

China's retail e-commerce tsunami: Alibaba challenges total U.S. online sales

China’s retail e-commerce tsunami: Alibaba challenges total U.S. online sale.

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Move over, Amazon.com and eBay.com. Alibaba is not only claiming the title of world's largest e-commerce brand by annual sales, it says it's about to surpass total annual online retail sales in all of the United States.

Alibaba Group says its online marketplaces in China exceeded 1 trillion yuan in gross merchandise sales in the first 11 months of 2012, nearly $161 billion. To put that number into perspective, U.S. consumers bought $194 billion online in 2011, according to the U.S. Department of Commerce.

Alibaba Group chairman and CEO Jack Ma announced the sales mark last month, according to Alibaba's official Alizila blog. He says surpassing the 1 trillion yuan mark makes Alibaba the largest e-commerce company in the world, overtaking such U.S. heavyweights as Amazon.com Inc., No. 1 in the Internet Retailer Top 500 Guide, and eBay Inc., which is not ranked in the Top 500 because it's a marketplace that does not sell on its own behalf.

EBay reported $48.66 billion in gross merchandise sales for the first nine months of 2012 and $60.33 billion for all of 2011. Amazon.com, which operates as a marketplace that channels sales for independent sellers as well as for Amazon itself, doesn't report gross merchandise sales but reported $39.82 billion in total net sales, including fees earned from third-party sales, for the first nine months of this year, and $48.07 billion for all of 2011.

"It's very likely that next year, our transaction volume will be bigger than all the American e-commerce companies combined," Ma added.

Ma had projected in September that Alibaba's two big online retail marketplaces—Taobao and Tmall—would do more than 1 trillion yuan in 2012 sales. But the company hit that mark in just 11 months, he says, because of unexpectedly high sales in China's smaller cities and the success of the big "singles day" sales on Nov. 11, China's equivalent of Cyber Monday in the United States.

The Alizila blog also noted that Taobao and Tmall generated shipments of 12 million packages a day on average during the first half of 2012, up 50% from 8 million per day in 2011.

Alibaba executives have predicted that its gross merchandise sales will exceed 3 trillion yuan ($482 billion) within five years, putting Alibaba in a position to challenge Wal-Mart Stores Inc. as the world's largest retailer of any kind. Wal-Mart's net sales in fiscal 2011 were $419 billion.

don@verticalwebmedia.com

@dondavisIR

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